Nissan Reconsidering Sustainability of Its Car Project in PakistanOctober 4, 2019
Ghandhara Nissan Limited released its latest progress report about its Brownfield project on Friday.
Due to the local economic conditions, particularly the automobile market situation, they have been compelled to revisit the project’s sustainability. Ghandhara Nissan also mentioned that one cannot afford to go for a project of this magnitude with such a level of uncertainty in the country.
The company is very much concerned that they have a very limited time-frame to complete all the necessary requirements and start commercial production before 30th June 2021 to avail the brownfield incentives for the new entrants.
The government had awarded the ‘Brownfield Investment Status’ for the revival of the company’s existing assembly to produce Datsun cars in Pakistan.
Nevertheless, the teams of Nissan Motor Company Limited and Ghandhara Nissan have been working day and night to address the above issues and hopefully will be able to address these challenges to launch our products within time as both the partners do not want to miss this opportunity of incentives for new entrants, said the company.
The report further stated that due to a substantial devaluation of Pakistani rupee against US dollar, the localization of parts has become mandatory to make the project viable. However, the technical evaluation study depicted that localization of some parts is either not possible or will take significant time and resources due to lack of technology and expertise in the local market.
Therefore, Nissan Motor Company Limited has been exploring options to get these parts developed at a minimum cost by global vendors so that they can be imported as part of CKD.
Under the Brownfield category, Ghandhara Nissan was allowed to import auto parts at lower rates of customs duty for a period of three years.
According to the company, they will be the biggest sufferer if they cannot meet the target dates as GNL has been working on this project since long utilizing all the resources including monetary investment as well as manpower.
In addition to the progress on the car project, the company is keen for capacity building with existing operations to ensure long-term sustainability while addressing the challenging macro-economic environment.
The truck makers posted a loss of Rs. 28.80 million for the period that ended on June 30th, 2019. The company had booked a profit of Rs. 1.03 billion last year.
Source: Pro Pakistani