Nishat Group is one of the successful business groups in Pakistan having net worth of $2.6 billion. Nishat Group belongs to Mian Muhammad Mansha a close relative of Prime Minister Nawaz Shareef. Nishat Group has signed an agreement with South Korean Automaker Hyundai to produce hybrid cars in Pakistan.
Automotive industry in Pakistan have seen some changes in the past, according to automotive Policy 2016-17 government and BOI has refused giving incentives to bigger players like Suzuki and Honda and said the incentives will be given to newer players in the market in order to promote healthy competition in the market.
According to tribune, Nishat Group has made its mind to jump into automotive industry in 2012 but it could not initiate any ventures with automotive companies due to lack of incentives available to new companies in the market.
Norez Abdullah said, “We had plans to start a venture in 2012 but automotive policy at that time was not favorable”.
CFO Hyundai Nishat Motor Limited has confirmed that due to incentives available in new Automotive Policy by BOI which offers incentives to new automakers, enabled us to streamline our venture, Hyundai approached us for this purpose and now we are going to start this venture.
The group is focused in producing hybrid cars in Pakistan, but the technology used for hybrid cars and infrastructure needed have high costs associated with it. Nishat group and Hyundai are currently making feasibility study of producing hybrid cars in Pakistan, said CFO.
He further added, Hyundai is already producing hybrid cars in the U.S. market and we are planning to launch the same variant in Pakistan. In Pakistan demand for such cars is growing fast and products are quite expensive in this segment. Ioniq 2017 is the model that Hyundai has launched in the United States in 2017, 1.6 liter 16 valve and 4 cylinder car has incredible look starting from $22,200.
Nishat Group is trying to convince their partner about the potential of the market but there are some technical issues that still need to be removed. There is always an option of importing the hybrid models in Pakistan said the CFO.
The Group is allocating $120 million in investment to setup an assembly plant in Faisalabad, there are still many decisions to take regarding models to start from and what technology should be used.
Abdullah said 800cc variants may not be considered because the profit margins in that size of engine are not attractive, we are focusing on fuel-efficient engines and SUV’s. Nishat partner Millat Tractors have a good track record in the local market, Millat tractors would have 18% stake in the new venture as well.
Abdullah said, after the feasibility studies and all other arrangements and technological issues, we are expected to launch our first car within 2 years.