Sojitz Corporation with Nishat Mills and its associates (NML), a consortium forming part of major Pakistani conglomerate Nishat Group, and Millat Tractors (MTL), Pakistan's largest tractor manufacturer, have formed a joint venture to build a new assembly plant and set up a new wholesale and retail network for Hyundai brand vehicles in the country.

The move, the partners said in a statement, was the result of the Pakistani government's Automotive Development Policy 2016-2021 to encourage growth in the country's automotive industry, with incentives for newcomers to the market. Available incentives include reduced import tariffs on factory plant and machinery during the construction phase and on imported CKD kits for a limited period.

"Sensing an opportunity, Sojitz and NML together established Hyundai Nishat Motor HNMPL to conduct an initial feasibility study for the sale of Hyundai vehicles. Now, following a capital injection and investment from the parties including MTL, HNMPL is set to launch its manufacturing operations," the conglomerate said.

HNMPL expects total setup cost will be around US$136m. An assembly plant, scheduled for completion in December 2019, is currently under construction in a special economic zone in Faisalabad, Pakistan's third largest city.

Sales will be carried out through distributor owned dealers and franchise dealers, with the goal of reaching 6% market share by 2024.

Pakistan is heading for 200m, political stability in the country has sustained steady economic growth and, in recent years, the automotive market has seen annual growth rate of over 10%. The market is forecast to expand further thanks to rising consumer numbers.

Sojitz, which already assembles and distributes Hyundai, said it would now work with NML and MTL (companies with local manufacturing, finance, and retail industry resources) "to establish Hyundai's presence in Pakistan as a powerful, quality brand, while simultaneously contributing to the development of the country's automotive industry".

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