Dewan Farooque Motors is Resuming Vehicle Production in Pakistan

Dewan Farooque Motors is restarting its production by end of October 2016, according to an official announcement made to shareholders on Monday.

Dewan Farooque Motors will be manufacturing vehicles of different segments under toll manufacturing arrangement for which the installations of jigs and fixture are in the process for assembly plants.

The company also has entered into a toll manufacturing agreement with Daehan—Dewan Motor Company, which is a joint-venture between Yousaf Dewan Companies and KOLAO Group based in Lao PDR and South Korea.

With the rising demand of automobile in Pakistan coupled with offer for incentives and tax relaxation offer in the government’s automobile policy, reports of developments were received that the automobile maker was flexing its muscles for last couple of years, however it was formally disclosed in August 2016 that its management submitted a plan to resume productions in relevant authorities — Board of Investment (BoI) and the Engineering Development Board (EDB).

Besides offering incentives to new car makers to enter into Pakistan, the new auto policy, Auto Industry Development Program (AIDP II), gives an opportunity to sick automobile units for revivals which Dewan Farooque Motors is being witnessed tapping on.

Dewan Farooque partnered with Korean brands like Hyundai and Kia to produce its first car on January 15, 2000. The company received an extraordinary response especially for its Hyundai Santro and Hyundai Shahzore; a one-ton truck.

The company sales grew well until 2008, but it faced various challenges afterwards and currently the productions and sales are next to zero. After a gap of three years, Dewan Farooque Motors produced a few hundred cars in fiscal year 2014 and 2015 based on its old inventory.

The revival would likely to see the re-launch of Shehzore 1-Ton single rear wheel truck and Shehzore 1-Ton truck.

The company planned to launch passenger cars, light commercial vehicles and SUVs in collaboration with KIA Motors Korea in years to come.

Recently, Dewan Group on the behalf of Dewan Farooque Motor also finalized their agreement with SsangYong Motors Company, the fourth largest automobile manufacturer in South Korea. The company is underway negotiations with KIA Motors, which is a part of Hyundai Motor Group for local production of KIA range of vehicles in Pakistan.

Pakistan’s automobile production reached all-time high in the outgoing financial year 2015-16. With the introduction of passengers cars will likely to intensify competition among local players at domestic level.

The automobile company has been in the red for past many years with nearly Rs. 90 million losses by the end of third quarter, however, the group is likely to inject fresh investment in Dewan Faroque Motors Limited directly or through foreign investors or local investors.

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