Audi AG keen to assemble vehicles in Pakistan

German carmaker Audi AG has expressed its interest in setting up an assembly plant in Pakistan and  has also submitted a letter to the Board of Investment (BoI) for consideration through its authorised importer in the country, according to a report in the local media.

“Audi AG has expressed the interest via its authorised importer in Pakistan to set up an assembly plant in Pakistan,” Head of Automotive at Premier Systems Private Limited Ali Khan said in an interview with the local media.

He also stated that the land for the plant has been bought near Pakistan’s biggest industrial sites in Korangi, which means a fresh investment of over $30 million.

Audi AG has authorised importers or assembly/manufacturing plants in different countries to represent them.

A memorandum of understanding was signed by Audi AG with the Sindh Board of Investment (SBI) to consider Pakistan as a potential market in May this year.

“We studied the automotive policy (approved by the government in March) to see if it’s a viable case,” Ali said.

Pakistan has become an attractive destination for foreign investors.

“People are hungry to see a new brand. Lower interest rates have meant that vehicles are more affordable. The fact that 40,000 vehicles are imported into the country through the grey market means there is ample room for Audi,” he said

“The reason why we would like to assemble cars in Pakistan is to help reduce the grey import of used cars. It means a warranty and an after-sales service within the country,” Ali added.

Furthermore, 900 imported units are sold by Audi in a year in Pakistan, which is expected to increase once the assembly plant has been given a green signal by the Board. The country in-charge for Pakistan and Bangladesh also foresees the prices of lower engine models to decrease in the range of 5-10 per cent if assembled in Pakistan.

However, the official said the current auto policy needs to include a feature that caters specifically to brands like Audi, BMW or Mercedes. “There has to be something that caters specifically to these brands. Globally, this is the case. We do not compete on volume. The plant in Karachi could go up to a maximum of 5,000 units a year.