Renault, Hyundai-Kia Ponder Production in Pakistan

A sharp jump in car sales in Pakistan has prompted Hyundai-Kia and Renault to develop plans to assemble vehicles there, the Financial Times notes.

Renault is expected to launch production in Pakistan in 2018m according to reports last November. Hyundai and local textile company Nishat Mills said earlier this month they hope by May to finalize a deal to assemble cars and light-duty trucks in the country.

Sales surged more than 50% in two years to 181,100 units in fiscal 2015-2016, matching a market peak set in 2006-2007, according to the Pakistan Automotive Manufacturers’ Assn. The trade group reports data in fiscal years that begin in July.

FT says an improving economy, cheaper financing options and improved security are driving demand. Per capita income grew more than 20% to $5,300 between 2010 and 2015.

Pakistan’s market today is monopolized by Honda, Suzuki and Toyota, all of which have production operations in the country. Hyundai predicts annual car sales in Pakistan will climb by two-thirds to 300,000 units by 2020.