European car manufacturer Peugeot enters Pakistani market in collaboration with Lucky Motor

— Reuters/File
— Reuters/File

KARACHI: European automobile giants Peugeot have entered the Pakistani market for the first time in collaboration with Lucky Motor Company (LMC), reported The News.

The company, which also assembles KIA in Pakistan, is bringing French Peugeot 1.2L Turbo 2008 Active and Allure, Rs5.25 million and Rs5.85 million, respectively.

When asked why the brand was launched LMC CEO Asif Rizvi said the country had a demand for European cars.

“Where do people prefer to go on vacation? Most of the people want to go to Europe, not Japan, China and South Korea” said Rizvi. He added that considering this trend he hopes 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”.

Interestingly, the Peugeot 2008 may affect the market share of Kia Sportage, but Rizvi said people can buy whatever they want as both cars will be assembled by LMC.

Both are SUVs and cater to 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 market? 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.

Over a dozen SUVs have been introduced in Pakistan because of the 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 localisation, Rizvi said Pakistan has inherent issues in its industries, which needed to be addressed before true localisation could be achieved.

The LMC CEO said that it was not possible to achieve localisation if the government only paid lip service.

“Presently, we only have one raw material, which is labour. If a localised auto part is highly labour intensive, only then its cost would be 15 per cent to 20 per cent localised. Otherwise, local parts have 10 per cent to 12 per cent localisation only,” he explained.

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