A Chinese partner of Volkswagen AG, China FAW Group Corp. is planning to commence car assembling in Pakistan to take advantage of the growing demand in the region.
According to Bloomberg, the company will assemble cars in the region as a measure to curb terrorism growth in the South Asia economy.
In an interview, chief executive officer of Al-Haj FAW Motors Pvt., Hilal Khan Afridi, said that the company looks forward to selling 10,000 vehicles, including cars, vans and pickups, in 2018 after the commencement of domestic assembly of the V2 hatchback at the end of the year. Al-Haj FAW is the Chinese group's local business that began selling imported V2s in Jan. 2015.
The company will be the first carmaker in 10 years to start assembling cars in Pakistan, where the economy is expected to grow at the fastest pace since 2008 as Nawaz Sharif's government handles power shortages and terrorism, according to a different report by the same publication.
President Xi Jinping has as well promised to invest $45 billion in the country, boosting the outlook for expansion.
Afridi said: "Initially we had a lot of difficulty to convince them to help us with technical expertise. Now that the Chinese market has slowed down they have increased their interest in international markets. It's a good sign for us."
The country's expenditure on infrastructure may help Karachi-based Ghandhara Nissan Ltd. to double sales of Chinese Dongfeng trucks. Al-Haj FAW sold approximately 3,400 vans and pickups in addition to 535 domestically assembled trucks in 2015. The company is set to invest 1 billion rupees ($9.5 million) to assemble cars in Pakistan.
An analyst at Karachi-based Arif Habib Ltd., Ahmed Hanif Lakhani, said: "Things are looking up for the auto industry. The economy is growing and consumer demand is rising with low interest rates making leasing more feasible."
The Ministry of Finance sees an expansion in Pakistan's economy by 5.5 percent in the year to June.