KARACHI: Lucky Motor Company (LMC), which assembles Kia cars in Pakistan, collaborated with Stellantis to launch European automobile Peugeot for the first in the country.
The company would be assembling French Peugeot 1.2L Turbo 2008 Active and Allure, Rs5.25 million and Rs5.85 million, respectively.
LMC CEO Asif Rizvi said the country had a demand for European cars. “Where do people prefer to go on vacation?” he questioned. “Most of the people want to go to Europe, not Japan, China and South Korea” he said, expressing hope that people who have driven European cars would buy the vehicles in Pakistan too.
LMC Automotive Division President Mohammad Faisal said people have been driving imported European cars such as Audi, BMW and Mercedes, and “now they have a European car on their menu”.
Peugeot 2008 might affect the market share of Kia Sportage, but, Rizvi added “let them buy whatever they want, both are our cars.” Both were SUVs and catered different kinds of consumer wants. Sportage is 2000cc and a bit bigger. It is a ‘C’ category SUV while 2008 is a smaller ‘B’ category SUV.
He admitted that the company was identifying segments that have not been established in Pakistan’s auto market. “If there are a lot of sedans, why will we bring one more to the markert? Why not find a segment that is yet to be catered and the SUV segment has just been that,” Rizvi said.
SUV has been the fastest growing segment throughout the world, and LMC followed the same pattern.
According to an industry research by another car company in Pakistan, the SUV segment would have the biggest share in Pakistan’s auto market at 37 percent by 2030 ahead of sedans and hatchbacks.
Over a dozen SUVs have been introduced in Pakistan in the aftermath of Auto Policy 2016-21, which offered tax incentives to new car companies such as Kia, Changan, MG and others to start their operations and create more options for customers. These companies also broke the monopoly of Japanese car companies in Pakistan’s auto industry.
To a question about localization, Rizvi said Pakistan has inherent issues in its industries, which needed to be addressed before true localization could be achieved.
It was not possible to achieve localization if the government only paid lip service. The government should help industries such as steel and plastic raisins. “Presently, we only have one raw material, which is labour. If a localized auto part is highly labor intensive, only then its cost would be 15 percent to 20 percent localized. Otherwise, local parts have 10 percent to 12 percent localization only,” he explained.