Pakistan lures Renault-Nissan investment with tax incentives image

Pakistan plans to draw foreign carmakers to invest and the government hopes to convince Renault-Nissan to open plants in the country.

The auto market in Pakistan is dominated by Japanese automakers, such as Toyota, Honda and Suzuki, and the local government plans to counterbalance the trend by offering big tax incentives to foreign makers to lure them to invest, while trimming some of the financial help for the local ones. The officials are not happy over the locally produced cars, as they are highly priced and under-engineered compared with imported vehicles. According to Miftah Ismail, chairman of Pakistan’s Board of Investment, the authorities are now engaged in negotiations with some major global companies to persuade them to come and open production plants in Pakistan. Ismail told Reuters he had some talks with the Nissan-Renault alliance for “some time”, and last month met Fiat executives in Italy for the first time. The government has also been involved in discussions with Europe’s biggest automaker, Volkswagen. “We expect that there will be one or two foreign investors coming into Pakistan,” Miftah said.

The local makers that are already producing cars in the country have evidently shown their discontent over the new auto policy that favors newcomers. The Pakistan Suzuki Motor Company said it had concerns that the government’s renewed incentive plan may “damage the tremendous investment potential in the Pakistan automobile sector by existing players such as Pak Suzuki Motor Co”. If the policy is revised, Suzuki said it was ready to make a further o 460-million-dollar investment into Pakistan.

Via Reuters