French Automaker Renault will start assembling cars in Pakistan by 2018, according an official government statement issued in Islamabad.
After a meeting of the Economic Coordination Committee, the highest economic-decision making body, the statement said that Renault has decided to invest in Pakistan following meetings between Finance Minister Ishaq Dar with Renault officials held during Dar’s visit to France this year.
Chairman Board of Investment, a body tasked to attract foreign investment, has met foreign companies like Volkswagen, Peugeot, Renault Fiat and Nissan to highlight Pakistan as an emerging destination for foreign investment.
Pakistan’s upgradation from Frontier to Emerging Markets by MSCI international index has triggered investors’ interest in South Asia’s second biggest economy, which is on an upward trend since the present government took over in 2013.
IMF Chief Christine Lagarde, who recently visited Pakistan, praised the Pakistani authorities for showing commitment to reforms that has pulled the country from a balance of payment crisis three years ago.
Pakistan recently completed its first ever program with the IMF under a three-year Extended Fund Facility (EFF). The fund provided $6.6 billion to Pakistan which helped the country stave off an imminent default on its external obligations in 2013.
The efforts of the present government, coupled with an improving situation on the security front, has helped the officials put up a strong case for country as a potential market for foreign investment.
Pakistan’s auto market has long been dominated by Japanese car makers such as Toyota, Honda and Suzuki which have assembling facilities in the country.
At the ECC meeting, Pakistani officials discussed the recent policy for the auto sector which favors a competitive environment. Mr. Miftah Ismail, Chief of the BOI, held various meeting with world car makers in recent months, including Renault which has decided to enter the market by 2018. Another leading car maker, NISSAN, has also shown interest in making investment in Pakistan.