South Korean carmaker Kia Motor Co will start assembling cars in Pakistan, according to a local partner that is planning to invest Rs12 billion ($115 million) to set up a plant and manufacture the Kia vehicles.
Karachi-listed Lucky Cement, which is part of the vast conglomerate Yunus Brothers Group, said in a statement on Thursday that it planned to set up a new company to start manufacturing and assembling Kia vehicles.
Kia cars had been assembled by Pakistan in the past but disappointing sales led to a halt in manufacturing.
The new venture will also market and sell, besides import and export of all types of Kia vehicles, parts and accessories, Lucky Cement told the Pakistan Stock Exchange in a statement.
Kia’s re-entry into Pakistan will boost government efforts to shake up the Japanese-dominated car market and loosen the grip of Toyota, Honda and Suzuki, who assemble cars in Pakistan with local partners.
The government believes increased competition should bring down exceptionally high car prices in Pakistan, and in March it introduced a new auto policy favouring new entrants into the market by offering generous import duties.
Pakistan, with a population of nearly 200 million people, is a potentially huge market, but just 180,000 cars were sold in the 2014/2015 fiscal year. That compares with more than 2 million passenger vehicles a year in neighbouring India.