Al-Haj FAW Motors inaugurates automobile assembly line

Company poised to break into pick-up, passenger vehicles market.

KARACHI:

Prime Minister Raja Pervez Ashraf said on Saturday that it is the government’s policy to promote the private sector so that it can play a leading role in the development and prosperity of the country.     

Addressing a function after formally inaugurating Al-Haj FAW Motors’ automobile assembly plant on the National Highway in the vicinity of Bin Qasim Port, the premier said the private sector is the key to economic prosperity and development of a country, and this government fully realises this.

“It is a great pleasure for me to see that our industrial group has started this very important automobile facility in partnership with China,” he remarked, and hoped that this project would prove a milestone for the automobile industry in Pakistan.

Sindh Governor Dr Ishratul Ebad Khan, Federal Minister for Defence Syed Naveed Qamar, the Chinese consul general in Karachi and a group of other provincial ministers were also present.

With the launch of its assembly line, Al-Haj FAW Motors said that the company is all set to significantly increase its market share in Pakistan in both trucks and pick-ups.

“After making a respectable impression in the trucks market of Pakistan, our company is ready to gain a share in the pick-up market also,” Al-Haj FAW Motors Chief Executive Hilal Khan Afridi told The Express Tribune on the launch day of its only plant in Karachi.

The company said that it had completed construction of its assembly line near Karachi with an investment of Rs1 billion. The plant will be capable of producing trucks, prime movers, light commercial vehicles and passenger cars.

The company has already been assembling two 1,000cc vehicles at the plant since June 2012. Afridi said that his company has sold a few hundred pick-ups assembled at this plant over the last few months.

Al-Haj FAW Motors – a joint venture between the largest and oldest Chinese vehicle maker First Automobile Works (FAW) Motors and Al-Haj Motors, an established commercial importer of heavy vehicles in Pakistan – has been importing completely built units (CBU) from China for the last few years.

With its assembly plant in action, the company is now targeting to launch new vehicles and passenger cars of 1,000-1,500cc engine capacity within the next few years. It has been assembling trucks since October 2011 and plans to produce 6,000 trucks and 12,000 light vehicles every year.

However, the company’s ambitions may be tempered by the economics of demand and supply. The truck market has slowed over the last few years in Pakistan, a representative of Hinopak Motors – the largest truck maker in Pakistan – said.

Industry officials say that the decline in overall economic activity and continuous disruptions in Nato supplies to Afghanistan have resulted in significantly low sales of trucks in Pakistan.

The installed capacity of Hinopak Motors is 5,000 trucks, but it produced only 1,237 trucks in fiscal 2011-12. The historical high figure of truck production in the country’s history is 4,993, achieved in fiscal year 2007-08, according to the Pakistan Automotive Manufacturers Association (PAMA).

Al-Haj FAW Motors claim that they are now number two in the list of truck producers in Pakistan, assembling around 700 trucks annually in the country. However, their claim is difficult to prove as they are currently not members of PAMA –the representative body of vehicle manufacturers in Pakistan.

There are four truck assemblers currently operational in Pakistan. With the addition of Al-Haj FAW Motors to that group, five truck assemblers will now vie for the Pakistani market – all operating from their bases in the port city of Karachi.

WITH ADDITIONAL input FROM APP

Published in The Express Tribune, November 11^th, 2012.