‘Pakistan’s auto market too small for so many players’

KARACHI: Ahmed Kuli Khan Khattak, CEO of Ghandhara Nissan on Tuesday said country’s auto market was too small for so may new entrants, evident from the fact they have been unable to make any significant dent in the market share of the old ones.

Khattak, who is also Chairman Pakistan Automotive Manufacturers Association (PAMA), said this on the sidelines of the launch of Cherry SUVs in a joint venture with Chinese state owned company Chery Automobile Co Ltd.

“But not all of them are going to stay,” he said adding, “Most of them are making black money white”.

Recently, Fahim Kapadia, CEO Agriauto Industries, one of the top auto vendor companies in the country, had said that many car models launched by new car companies might be rolled back when they would come under normal tax regime.

Meanwhile, Khattak said most of the new entrants have failed to snatch any significant market share from the established players so far.

“If there are so many companies and cars, then why is the car market still marred by the own-money issue?” he questioned.

Rejecting the just-in-time theory of production, which advocated low inventory, Khattak said it was only facilitating the menace of own-money in Pakistan.

The company has launched two SUVs. One is Tiggo 4 Pro, which is a five-seater SUV with 1.5TCl Engine. The other is Tiggo 8 Pro, a seven-seater, with a 1.6TGDl Engine. Tiggo 4 will roughly be priced in the range of Rs4 million and Tiggo 8 Rs7 million.

Justifying launching vehicles in the high-ticket but small SUV segment, Khattak said,” Pakistan doesn’t have enough good roads and SUVs, having higher road clearance, make a simple business case in Pakistan”.

“Because of the Covid pandemic-led international travel restricted, people are now travelling more domestically, so, there will be good demand for SUVs,” he explained.

Khattak said that localisation couldn’t be increased without scale production and deletion, which was slowly replacing imported parts by localising them, but it won’t be possible for his company as well.

He further said high shipping cost and fluctuation of dollar would be a huge challenge for his company as well as the whole auto sector.

Khattak criticised Engineering Development Board (EDB) for not giving his company brownfield status for no valid reason under the Auto Policy 2016-21, in spite of the fact that they were bringing new cars and investment.

He added that his company was under normal tax regime.

To a query, he said that Nissan, their original partner, was reluctant to come to Pakistan till at least 2023.

“We will definitely name this new joint venture differently. You won’t be seeing Nissan in the new venture’s name,” he said.

He said they were also planning to launch Chery hybrids and electric vehicles in future, adding, Ghandhara would be making an investment of $10 million over the first four years.

Chery will launch with an initial dealership network of eight dealers across Pakistan and a production capacity of 16,000 units. In their second phase of production, this will be increased to 32,000 units as their plant is being built in Karachi’s Port Qasim.

Sales of the first locally built Chery vehicles are expected to begin in Pakistan within the fiscal year 2021-22.