ISLAMABAD, March 23 — Pakistan, which will be the location of the first completely knocked down (CKD) plant for Proton vehicles in South Asia, can become the Malaysian national carmaker’s gateway to penetrate other countries.
Proton chairman Datuk Seri Syed Faisal Albar said the company’s export strategy was to look at countries that had multi-trade agreements with other nearby countries.
“Hopefully, they can become gateways for us. Therefore, we don’t need to go everywhere. We just focus on key markets that have trade agreements with surrounding countries. That will become our door (for new markets),” he told Malaysian media after the symbolic groundbreaking ceremony of the plant on Friday.
The event was officiated by Prime Minister Tun Dr Mahathir Mohamad and his Pakistan counterpart Imran Khan at a hotel here.
ALHAJ Automotive, the official distributor for Proton vehicles in Pakistan, will make an initial investment of US$30 million to build the plant on a greenfield site near Karachi, in Sindh province.
Syed Faisal said Proton had actually repositioned its export strategy, where it would like to go into a market which was meaningful and be there for the long term.
“Rather than just sending cars CBU (completely built-up cars) to the dealers to sell, the new strategy includes assembling cars in that local market. With that you assure the local government or you get it to be more motivated to be with you in the longer term because we create jobs.
“This is like the partnership (in Pakistan), where within three years we will be creating 2,000 direct jobs. We estimate to the downstream level, which is the whole entire ecosystem of the automotive sector that we want to create, we will be creating another 20,000 ancillary jobs,” he said.
Syed Faisal said Proton chose Pakistan to establish its overseas assembly plant because of the market’s high potential.
“There are 17 cars for every 1,000 people—that’s quite low. We want to go to the market for the longer term. Besides that, there’re not many foreign brands that exist in Pakistan currently. Therefore, we believe there’s a first mover advantage if we go in early enough before everybody crowds in. Then we can gain long-term benefits,” he said.
Syed Faisal said currently Proton was targeting a production capacity of 25,000 capacity a year starting June 2020 from the new plant, with Saga as the first model.
“We need to position according to the tax structure incentives in each country. We are now focusing on Saga simply because Saga is 1.5 cc and below. The tax structure of 1.6 cc and above is different. We are studying (to introduce) other models also. We are also studying the consumer behaviour in Pakistan. Some products may work in Malaysia and other countries but don’t work in this country,” he explained.
He said Karachi had been chosen as the site of the plant because it was the centre of the automotive industry and Proton’s partner was based there. — Bernama