On Wednesday, Ghandhara Nissan held an event where the company officially confirmed its re-entry to Pakistan. The company has a massive and aggressive localization and indigenization program for Pakistan. Nissan plans to launch its first vehicle by 2019, making use of at least 20 percent of parts that have been locally manufactured.
The official announcement confirms ProPakistani’s reports from February where it was detailed that the company plans to launch Datsun Go cars in Pakistan by 2019.
At the event in a local hotel Karachi, an agreement was signed between Ghandhara Nissan Ltd Pakistan and Nissan Motor Co. Japan. This agreement allows Ghandhara Nissan Ltd to manufacture vehicles as Nissan Motor Japan’s partner in Pakistan.
Nissan’s senior vice president, Peyman Kargar, and CEO of Ghandhara Nissan, Ahmed Kuli Khan Khattak and General Ali Kuli Kahn Khattak signed the agreement.
Ahmed Kuli Khan told the media that Ghandhara Nissan will invest Rs. 4.5 billion in the brownfield project and Nissan Motors will provide technical and non-financial services. This investment has been made under the government’s Auto Policy 2016-21.
“This policy doesn’t bind the manufacturer to localization the manufacturing process but Ghandhara plans to enter with 20 percent locally produced parts. And within 3 years, Ghandhrara plans to use local parts like the current local car assemblers,” Ahmed Kuli Khan added.
Peyman Kargar said that for the locally produced Datsun cars, Nissan is also looking for more local options. Nissan’s technical team is visiting the local parts suppliers and assessing their technical abilities. Currently, these suppliers deliver parts to Nissan’s local competitors and so the company has some concerns over quality issues.
“Nissan, after the evaluation, will work with the suppliers to upgrade their manufacturing facilities and improve the quality of parts. Currently, their parts are not up to Nissan’s standards,” Peyman Kargar added.
On the question of the devaluation of rupee and impact on the auto industry, Peyman Kargar said that the devaluation will encourage auto assemblers to focus on localization of parts, however, it will take time to achieve the capacity.
Media personnel also asked what type of car Nissan plans to launch in 2019. Despite multiple questions and concerns over Ghandhrara’s target market, Ahmed Kuli Khan and Peyman Kargar refused to answer the question stating, “We are not able to tell you at this point in time.”