In yet another major boost to its efforts to attract foreign investment, Korean carmaker Kia will start assembling cars in Pakistan in a joint venture with a local partner, a new addition to the car industry which has long been dominated by Japanese companies.
Karachi-listed company Lucky Cement will invest $115 million to set up a plant and manufacture the Kia vehicles, according to a statement to Pakistan Stock Exchange. There was no information, however, on how much Kia Company will investment in the project.
A month earlier, French carmaker Renault had announced to invest in Pakistan and they are said to be in talks with several other carmakers.
Kia had built cars in Pakistan in the past, but the company stopped production after a low sale in the market, which is dominated by Japanese companies, Toyota, Honda and Suzuki which assembled cars in Pakistan in joint ventures with local partners.
According to the announcement, KIA will market and sell cars, in addition to import and export of all types of Kia cars, parts and accessories. Lucky Cement is largest cement maker in Pakistan.
With per capita annual income of around $1,200, buying cars is out of reach of most of the people in the nation of nearly 195 million people, high prices being one of the reasons. The government in March this year introduced a new auto policy to encourage new entrants in the market to help bring prices down.
Just 180,000 cars were sold in 2014/15 fiscal year compared with 2 million passenger vehicles a year in neighboring India, according to a Reuters report.