The federal government has officially granted permission to three new companies for setting up car assembly plants in Pakistan.
These companies are set to bring $372 million investment in collaboration with local partners. According to the secretary Khizar Hayat Gondal, the Ministry of Industry and Production (MIP) has approved licenses for United Motors Private Limited, Kia-Lucky Motors Pakistan Limited and Nishat Group under the Greenfield investment category.
He also said that these companies will bring a total investment of $372 million. Kia-Lucky Motors will invest $190 million, the biggest sum, followed by Nishat Group with $164 million and United Motors at $18.1 million.
Nine companies were eager for setting up shop in Pakistan however only three of them have received the required approvals until now. The secretary states that the documents submitted by other companies are being looked into.
The news comes mere days after the Prime Minister dissolved the Engineering Development Board (EDB) due to corruption and for stopping new car manufacturers from entering Pakistan.
A notification was issued to the above mentioned companies by MIP. It stated that:
The government of Pakistan is pleased to award the Category-A Greenfield Investment Status to United Motors (Pvt) Limited for assembly/manufacture of vehicles covered in the exclusive contract agreement,
A similar notification was issued to the other two companies as well.
United Motors is partnering with a Chinese manufacturer for a joint venture. Nishat Group is collaborating with South Korean Hyundai Company while Lucky Cement is going to set up a manufacturing plant with Kia Motors, also from South Korea.
Back in March the government rolled out the new auto policy in order to attract foreign investment and to open up the local market for competition. New entrants were given tax holidays with reduced import duty rates to facilitate them in setting up assembly/manufacturing plants in Pakistan.
European car maker Renault was also interested in heading to Pakistan. According to the Board of Investment, Renault was in talks with the government but did not submit any application for setting up a manufacturing plant.
The Auto Industry Development Committee will hold another meeting after Eid to review more applications for car companies.