Kia Lucky Motors Pakistan is expected to commence production from August this year, reported Business Recorder. The report stated that the company is going to launch two new models in the next three months.
The manufacturing facilities of the firm are complete and the firm will start manufacturing by August 2019 for the following models:
- Kia Sportage (2000 cc petrol)
- Kia Picanto (1200 cc petrol).
The bookings for Kia Picanto will start in August 2019 while delivery will start in October 2019 whereas booking for Kia Sportage will start in June 2019 and while it will be delivered in August 2019, stated the report.
Kia has up to 15 percent localization in terms of parts and assembly in Sportage and Picanto.
The company’s representatives met with the Prime Minister’s Advisor on Commerce, Textile, Industries and Production and Investment Razzak Dawood and apprised him of their production plans and other issues.
Kia Lucky Motors Pakistan Ltd had applied for Greenfield status on March 13, 2017, which was awarded on June 19, 2017. The planned investment in the project is $ 190 million.
According to the CEO, the company has a production capacity of 50,000 units per annum but the utilization of the production capacity will depend on the market demand of its vehicles.
Furthermore, it was highlighted that the company is worried over the imposition of 10 percent Federal Excise Duty (FED) on above 1,700 cc vehicles.
According to Kia Lucky Motors, it is being rumored that the Government of Pakistan (Ministry of Industries and Production) is actively considering awarding Greenfield status and similar concessions to an existing OEM which has committed to bringing in new investment.
The company argues that it was never the objective of the Automotive Development Policy to give concessions to existing OEMs under the Greenfield or Brownfield categories, adding that if such intent had been communicated earlier, global OEMs like Kia and others would not have decided to enter Pakistan.
Federal Excise Duty (FED)
FED has been imposed on locally manufactured vehicles of 1700 cc and above despite MoI&P’s recommendation to remove the FED.
According to the report M/s Kia Lucky Motors Pakistan and M/s Hyundai Nishat Motors were awarded Greenfield status under Automotive Development Policy 2016-21 and have submitted requests for withdrawal of Federal Excise Duty (FED) at 10 percent, levied on locally assembled vehicles having a cylinder capacity of 1800 cc or above, in view of their major variants of higher engine capacity.
Engineering Development Board (EDB) and the Ministry of Industries and Production have supported their proposal and opposed the levy of 10 percent FEC on locally manufactured vehicles.