The French car maker Renault has signed an agreement with the UAE's Al-Futtaim Automotive to assemble and distribute vehicles in Pakistan.
"Groupe Renault is delighted to extend its international footprint by entering Pakistan, a fast-growing market with a 10 per cent annual growth rate," said Fabrice Cambolive, the senior vice president and chairman of the Africa Middle-East India region for Renault.
Renault cars will be built at a plant in Karachi from the first quarter of 2018. Car sales will start in 2019 and will be ramped up in 2020, the companies said in a joint statement. The project is still awaiting regulatory approvals from the Pakistani authorities. As is common for such large projects in Pakistan, its finalisation is dependent on the fulfilment of a number of conditions, the firms said, which did not disclose the financial cost of the project.
The deal will see Renault bring its technological know-how while Al Futtaim, via its new subsidiary Al-Futtaim Automotive Pakistan, will establish the manufacturing and assembly plant and exclusively distribute Renault cars.
Pakistan’s economy has undergone a huge transformation in recent years, in part because of an aid for reform deal struck with the IMF, which provided a US$6.6 billion bailout loan in 2013.
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That led to a string of state asset sales that have bolstered Pakistan’s foreign exchange reserves and lowered inflation, attracting billions of dollars in foreign investment.
“With a population of over 200 million, a fast-growing economy and a vibrant middle-class, Pakistan is undoubtedly a very important strategic growth market for us," said Len Hunt, the president of Al-Futtaim Automotive.
"We are very excited to represent Groupe Renault which is among the top automotive brands worldwide, and a leading European car manufacturer entering this market," he said.
"We will endeavour to add real value to the Pakistani auto sector and consumer, and to create a world-class organisation in Pakistan. Al-Futtaim also looks forward to a very long and successful partnership with Groupe Renault.”
