Kia Motors in Talks to Set Up Auto Assembly Facility in Pakistan



The sponsor of Lucky Cement and ICI Pakistan, YBG is in the initial phase of negotiations with the South Korean automobile manufacturer KIA to set up an auto assembly facility in Pakistan.

Kia’s latest initiative follows a strong line-up of auto manufacturers, including Nissan-Renault, which has expressed interest in building assembly facilities in the Japanese-dominated auto industry of Pakistan after the introduction of a new auto policy in March, earlier this year.

Related: Renault in Pakistan- What to Expect?

Pakistan’s car market with a strong potential for growth in demand under the China-Pakistan Economic Corridor (CPEC), low interest rate environment and attractive policy incentives provide a compelling case for foreign automakers to step into the Pakistani market.


Car sales grew at a compound annual growth rate of 17% in three years ending on 30th June, 2016. Pakistan’s car penetration of 13 vehicles per thousand persons is the lowest in the region and hovers at 55% below the regional benchmark. While details about the size and specs of the new plant (which may take 2 to 3 years to be operational) are still awaited, the investment bodes well for local auto-part manufacturers who will likely expand their operations given the sizeable increase in demand.

Related: China Donates 25 Vehicles For Patrolling Highways

The new auto policy envisages doubling the production of cars/vans/jeeps and light commercial vehicles to 429,000 units from the current level by 2021.

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