Renault to Begin New Assembling Cars by 2018

ISLAMABAD:
The French automobile manufacturing company, Renault is going to start the assembly of the cars in Pakistan and this company will start work to break the monopoly of existing manufacturing company and also provide the chance to the clients to buy better quality vehicle at the comparatively affordable rates.
The Board of Investment said that the French company, Renault will start assembling of cars by 2018 and this company will introduce it top line SUV , Duster at the reasonable rate at the cheap rates. The cars will be sold at the lower prices to break the monopoly of the dominating players in the country. The latest vehicle of the brand, Duster is provided in the market at about 2.5 million and it was the lower price of 1500 cc cars made by Japan. The company will introduce 1200 cc cars to meet the needs of the upper middle class families. The automobile manufacturing company, Renault will invest about $100 million to enhance the capacity of Ghandara plant, where the vehicles will be assembled.
Breaking monopoly
Pakistan tried its best to bring at least one foreign automobile manufacturing brand so that it can break the monopoly of the three dominant players in the auto market. There were three major automobile manufacturing companies, like Suzuki, Toyota and Honda and they are working in this country for manufacturing and assembling of the vehicles and these vehicles are sold at the relatively higher prices but the qualities and specifications of these locally assembled vehicles are not up to the international standards.
Renault is the multinational automobile manufacturer, which was established in 1899 and it produced wide range of vans and cars in the domestic market. It is included in the top 10 global car manufacturers because of their market share. The group has over 10% market share in Europe last year and it got the success due to its brands like Clio, Sandero, Duster and Capture. Miftah Ismail said that the French company would carry out its business activities in this country under current automobile policy but no further benefits are given to them. this auto policy has the main objective of bringing new player and Renault has promised to initiate fuel efficient and high security feature vehicles, which are provided at the reasonable rates.
Benefits for local market
This initiative is taken to enforce the current car manufacturing o r assembling companies to reduce the prices of the vehicles of their brands. The sale of the locally assembled vehicles was raised to 12% and the number of vehicles reached to 257,752 units as the complete data is shared by Pakistan Automotive Manufacturers Association. They also increased the import of the used vehicle around 67% and about 53,600 used vehicles were imported during the fiscal year 2015-16 as compared to 32,100 units in 2014-15.
The government has revealed the new policy so that they can attract Greenfield investment to revive the closed auto assembly units in the country.
It is also said that Engineering Development Board has prepared the engineering side of the draft policy and the chairman of BOI framed the financial part of the policy.
The government is also trying to bring the foreign companies including Nissan, Renault, Volkswagen and Peugeot. Nissan will start the models of Datsun in Pakistan next year and Renault has 50% shares in Nissan. The government has also taken the step for the revival of sick units and the new auto policy will allow the import of non localized parts of the vehicles at 10% duty and the localized parts at about 25% for coming three years.
The government has also accorded the one-off duty free import of plant and machinery to establish the assembly and manufacturing facilities. It permitted import of 100 vehicles for same variant in form of built units at 50% of prevailing duty for test marketing after starting the project.
The company has introduced the new initiative for new investors to get the reduction of 10% custom duty on their non localized parts for 5 years against the current 32.5%. for current investors, the duty was reduced to 2.5% to 30% during fiscal year 2016-17.