Dubai: Al-Futaim group will assemble and distribute France’s Renault car brand in Pakistan, marking a major push outside of the Middle East for one of the UAE’s leading family-owned enterprises. The assembling plant — in Karachi — could become operational as early as the first quarter of next year and with car sales to start in 2019. Full-scale ramp up production will start in 2020.
The deal, announced on Monday, also highlights the fact that UAE businesses are looking to neighbouring markets/regions to expand their footprint. Al-Futtaim, in particular, has diverse automotive interests, being the UAE distributor for Toyota, Honda, Volvo and Chrysler, among other brands. It had over the years also pushed its auto interests to elsewhere in the Middle East, notably in Egypt.
Al-Futtaim’s global automotive operations now extend to 11 markets across the Middle East, Africa and South Asia.
- Len Hunt | President of Al-Futtaim Automotive
The finalisation of the Al Futtaim-Groupe Renault transaction is “subject to a number of conditions precedent, mainly relating to relevant regulatory approvals from Pakistani authorities”, a statement from the group said.
Details regarding the production capacity at the plant and what models could be built there have not been revealed.
Renault in recent years has been quite successful in pushing its small to mid-sized SUVs — the Koleos and the Capture — in emerging markets.
“Groupe Renault is delighted to extend its international footprint entering Pakistan, a fast-growing market with a 10 per cent annual growth rate,” said Fabrice Cambolive, senior vice-president and chairman of the Africa, Middle East, India Region at Groupe Renault. “By partnering with Al-Futtaim, Groupe Renault aims to become a major player in Pakistan. We aim to bring our latest products and cutting-edge technology and set new benchmarks of safety and quality in the market.”
The agreements will see Groupe Renault bring its latest products and tech know-how into Pakistan, while Al-Futtaim — through a new subsidiary Al-Futtaim Automotive Pakistan (Private) Ltd — will establish the manufacturing and assembly plant, and exclusively distribute Renault cars.
The entry into Pakistan is well-timed. The country’s economy has been on a fairly solid footing despite the period political upheavals, which also saw a new prime minister take over. But on the flip side, there are still concerns that the Pakistani rupee remains overvalued.
“With a population of over 200 million, a fast-growing economy and a vibrant middle-class, Pakistan is undoubtedly a very important strategic growth market for us,” said Len Hunt, president of Al-Futtaim Automotive. “We are very excited to represent Groupe Renault, which is among the top automotive brands worldwide, and a leading European car manufacturer entering this market.
“We will endeavour to add real value to the Pakistani auto sector and consumer and to create a world-class organisation in Pakistan,” he said, adding that Al-Futtaim also looks forward to a long and successful partnership with Groupe Renault.
