Chinese automobile giant Chery expected to invest massively in Pakistan

Lahore: Automobile giants of China, Chery is expected to soon massively invest in Pakistan under the Right Hand Drive (RHD) strategy, a Pakistan-China Joint Chamber of Commerce and Industry (PCJCCI) leader said.

Speaking at a think tank session held at the PCJCCI Secretariat, PCJCCI Senior Vice President Ehsan Choudhry mentioned that CPEC had opened doors for Chinese companies, which were willing to invest in Pakistan’s automobile sector.

“Chery launched its RHD strategy in 2019 and selected seven countries as its key potential markets, including Pakistan,” he shared.

Earlier, Wang Zihai, President PCJCCI remarked that the automobile industry was an integral part for the development of highways, roads and other infrastructure and it has great significance in CPEC-related projects.

“CPEC projects are strategically important and beneficial for the economies of both countries and Pakistan’s automobile industry is one of the main beneficiaries of CPEC,” he noted.

China-Pakistan automobile cooperation was a win-win choice as new Chinese auto sector entrants in Pakistan would bring more options to local customers, Wang Zihai added.

China’s Belt and Road project has now been developed through which Pakistan is importing automotive parts and completely knocked down (CKD) kits from China at cheaper costs, he observed.

Owing to unemployment, Pakistan had a low labour cost, therefore, the country could develop Chinese-origin vehicles with little investment, he elaborated.

“If sold at economical prices, these vehicles can capture the domestic market,” Wang Zihai stressed, adding that due to the high rate of inflation, the government should initiate low-cost vehicle manufacturing for the comfort of people.

This year in July, Chery was launched in Pakistan through a manufacturing and licensing agreement with Ghandhara Group. This initiative has initially injected an investment of Pakistani Rs 2.4 billion in Pakistan’s automotive sector.

Both entities have planned to increase the production capacity and ameliorate product quality while embracing the latest trends in technology.

Ghandhara and Chery are eyeing localization and export as the next targets. Following the successful infiltration into Pakistan’s market, the companies are now looking to penetrate South Asia and other emerging markets.

This endeavour promises to give a great boost to Pakistan’s export sector helping the economy tackle financial challenges and improve Gross Domestic Product (GDP).

The official brand launch of Chery Automobiles Co. Ltd. named, “A Glance Into The Future of SUVs” was arranged in Islamabad.

At that event in July, Executive Vice President of Chery Charlie Zhang had said: “Chery’s entrance to Pakistan’s automotive market represents a colossal leap in the ongoing progress of local manufacturing infrastructure and economic activity.” He further added, “We believe that, with the close collaboration and cooperation of the Pakistani government, this will deliver sustainable benefits for the national economy, stakeholders, partners, Chery, and Pakistan’s automotive industry.”

The Ghandhara-Chery alliance has also agreed on promoting localization. Chief Executive Officer (CEO) of Ghandhara Group Ahmed Kuli Khan Khattak remarked that by “localizing the manufacturing of components and parts and boosting development in the auto supplier industry, Pakistan will be provided with the much-needed technical assistance. This will also serve as a cornerstone for promoting Pak-China cooperation in the automobile industry that will significantly boost the country’s economy through exports.”

Ghandhara plans to invest about $ $10 million over the next four years. The project and the development of a distribution network promise to create many job opportunities in the industry while driving economic growth. The ambition to localize production, create jobs, and drive exports was reiterated by the key speakers.