Kia-Lucky Motors Pakistan Limited: Kia Sportage Launch
- Kia-Lucky Motors Pakistan Limited (KIA) organized a press launch of Kia Sportage whereby the event provided an opportunity to interact with the management and attain insights on the automotive market.
- Kia-Lucky Motors is 1st of the 18 companies registered as new entrant under the AIDP-II policy to enjoy concession on import of parts for a period of 5 years. Kia has partnered with Younus Brothers Group to establish an automotive assembly plant with a capacity of 50k units annually.
- The plant has been established at an aggressive pace and within a span of 18 months. To recall, Pakistan’s automobile industry hosts current capacity of 350k units annually.
- The management eyes Pakistan’s automotive potential to gain traction going forward eyeing the industry demand to reach 500k units by 2025. This potential is propelled by the underpenetrated market with current demand at mere 1.65 vehicles per thousand people, or 320k units annually, compared to 2.4 and 4.2 vehicles per thousand people in India and Indonesia, respectively.
- To note, global average stands at 12.8 vehicles per thousand people. Using the same metric adjusted for per capita incomes, Pakistan’s potential market stands at 450k-500k vehicles annually.
- Among its domestic lineup, KIA has launched its first locally assembled vehicle, the Kia Sportage. The compact SUV-crossover has been launched in the 2.0L segment that is untapped by the existing OEMs and boasts proven model success around the globe.
- Following the strategy of offering value-for-money, upto 5 models may be launched by the OEM tapping various segments. Kia Picanto, 1.0L hatchback, is expected to launch by Aug’19-end with deliveries targeted by Oct’19 that shall also be a locally assembled vehicle.
- Expansion of dealership network is on the cards with 12 dealerships currently operational and another 12 planned for the year taking the total to 24 dealerships.
- The management believes regulatory hurdles may prove to be a bane for the industry where imposition of FED across all capacity vehicles, imposition of additional custom duty, and high incidence of taxation on cars (tax amounts to 30-38% of vehicle prices) have already led the market to adjust downwards to 280k vehicles sold in FY19 compared to 333k in FY18. Any move to reduce the duties and removal of regulatory upheavals can spur growth for the industry, going forward.
BMA is amongst the leading financial groups in Pakistan. BMA Capital’s core areas of business include Capital Markets, Corporate Finance & Advisory, Asset Management, and Financial Products Distribution. BMA Capital is the leader in privatisation advisory in Pakistan, having successfully advised on over 50% of all privatisations in Pakistan, by value, in transactions valued in excess of US$4 billion. Recent transactions include joint lead managing the $813 million GDR Offering of 10% of OGDCL on the London Stock Exchange in 2006-07, and advising Etisalat on their successful acquisition of a 26% strategic stake in Pakistan Telecommunications Company Limited (PTCL) for US$2.6 billion, the largest M&A transaction and foreign direct investment in Pakistan’s history. The firm is among the top brokers in the Pakistan equity and treasury markets, and is among a handful of firms that comprehensively cover all segments of the capital markets. This is supported by a very strong and independent research capability, which is quoted regularly in both local and international media. BMA Capital’s retail brokerage brand, BMA Trade, has launched a nationwide network of branches as well as a comprehensive online trading platform, enabling investors across Pakistan to take part in the capital markets.
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