Hyundai Motor Co, South Koreaâ€™s biggest automaker, plans to partner with billionaire Mohammad Mian Manshaâ€™s Nishat Mills Ltd. to start assembling cars in Pakistan as vehicle sales accelerate in the $271 billion economy.
Nishat Millsâ€™ venture, which includes Hyundai and Sojitz Corp., will assemble passenger and one-ton commercial vehicles in Pakistan, the company said in a stock exchange filing in Karachi. Nishat wants to finalize the agreement after a feasibility study within four months, Norez Abdullah, an adviser to Nishatâ€™s automobile and power division, said by phone from Lahore.
The South Korean company joins Renault SA and Kia Motors Corp. in planning to assemble vehicles in Pakistan to take advantage of Prime Minister Nawaz Sharifâ€™s proposal to offer incentives such as lower levies to lure carmakers. Passenger car sales in Pakistan climbed 19 percent to 180,079 vehicles in the year to June, the highest since 2007, as the economy expanded at the fastest pace in a decade.
â€œThere is a huge vacuum in the auto sector,â€ Abdullah said. â€œThere arenâ€™t enough options being delivered by Japanese auto carmakers for the past 20 years. People have started to look abroad for choices.â€
Pakistanâ€™s automobile market is dominated by Japanese automakers such as Toyota Motor Corp., Honda Motor Co. and Suzuki Motor Corp. Suzukiâ€™s local unit plans to invest $460 million on a second plant that may start production by end of 2018, according to an e-mailed statement by Pakistanâ€™s finance ministry on Dec. 15.
Manshaâ€™s Nishat Mills is Pakistanâ€™s largest textile exporter, while his MCB Bank Ltd. is the nationâ€™s second-largest bank by market value. Nishat Mills shares rose 2 percent to 169.52 rupees, the highest in a week, at the close of trading in Karachi.