News Analysis |
United Auto Industries, a leading Chinese bike maker is gearing up to launch an 800cc car next year, a company official confirmed on Thursday. Its launch will be followed by the end of the 30-year journey of iconic 800cc Suzuki Mehran in 2019. United Auto Industries is venturing into car and pickup manufacturing; United Motors General Manager Muhammad Afzal told a publication.
He said that the company will use Chinese technology and market its vehicles under the brand name of United. “The local assembly of these vehicles will begin in the first half of 2018,” he said. The market has been abuzz with reports that United is introducing Mehran and Ravi lookalikes with minor design variations to avoid copyright litigation. “Our car and pickup are not the copy of Suzuki brands.
The lowest in the region, domestic car penetration of 13 vehicles per thousand persons is also offering an open playfield for the new auto manufacturers.
Our vehicles are totally different and loaded with various attractive features and safety standards,” Mr Afzal said. As for the pricing, he said that the company plans to keep it “extremely affordable”. The official did not give any details about the company’s investment in the greenfield project, level of localisation, plant capacity and monthly production number.
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In June, the government allowed United Motors, KIA-Lucky Motors and Hyundai Nishat Motor to set up greenfield projects under the new auto policy. These companies were promised special incentives by way of reduced customs duties on the import of completely knocked-down kits for local assembly.
Pak Suzuki plans to discontinue Mehran and introduce the next-generation 660cc Alto in March 2019. Alto will have a price tag of Rs850,000-900,000 for the basic variant. Mehran, Ravi and Bolan, which belong to the 800cc category, constitute the largest auto segment with combined sales of approximately 8,000 vehicles per month.
The news of new entrants Nissan-Renault, Hyundai and Chinese FAW along with KIA is encouraging for Pakistanis who so far, are relying on three available local assemblers.
Pak Suzuki has so far dominated this segment as vehicles produced by recent entrant Al-Haj FAW cost around Rs100,000 more than Ravi and Bolan. Vendors of Japanese cars said it remains to be seen if United will make a dent in Pak Suzuki’s market share. Since 1989, Mehran has been the car of choice for customers as it helped them shift from motorcycles to four-wheelers.
Mehran’s affordable price, low-cost parts and after-sales network attract the middle class that cannot afford more expensive local or imported vehicles. According to vendors, Chinese motorcycles were first rolled out in 2005 at prices that were 40 per cent lower than those of Japanese bikes. As a result, customers went berserk for Chinese two-wheelers, which now control up to 60 percent market share.
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An agreement for production of light commercial and passenger vehicles has been signed between the Ministry of Industries & Production and KIA Lucky Motors. Following the recent surge of automobile investors that have turned their attention to Pakistan, an agreement for production of light commercial and passenger vehicles has been signed between the Ministry of Industries & Production and KIA Lucky Motors.
These companies were promised special incentives by way of reduced customs duties on the import of completely knocked-down kits for local assembly.
According to details, the company will invest $115 million for setting up an automobile assembly plant in Karachi that will produce a wide range of commercial and passenger vehicles. The agreement has been signed for production of light commercial and passenger vehicles under Automotive Development Policy 2016-2021.
“This week Pakistani auto sector has taken a giant leap forward with the Hyundai plant inauguration in Faisalabad and KIA Lucky agreement signed already. The new auto policy announced in the last year is finally bringing fruits for Pakistani consumers”, said the official.
Read more: Volkswagen and three others set to launch operations in Pakistan
The Korean auto giant KIA Motors is a favorite brand in GCC, US and European markets. The KIA website shows products ranging from low-cost hatchbacks to luxury sedans, from crossovers to SUVs, most of them with plug-in hybrid variants as well.
The new automobile policy is attractive for new automaker participants in Pakistan’s growing car market. The news of new entrants Nissan-Renault, Hyundai and Chinese FAW along with KIA is encouraging for Pakistanis who so far, are relying on three available local assemblers. The lowest in the region, domestic car penetration of 13 vehicles per thousand persons is also offering an open playfield for the new auto manufacturers.