French automobile company says car sales expected to start in 2019 upon completion of Karachi plant
Renault ties up with new Al Futtaim unit to build and sell cars in Pakistan
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.
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.”