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Nissan to re-enter Pakistan market with Datsun brand


3/28/2018
A Rs4.5 billion investment by Ghandhara Nissan, a local partner of Japan’s No. 2 carmaker, is expected to create more than 1,800 jobs
 
TOKYO – Nissan Motor Co. said Wednesday it will resume building and selling cars in Pakistan next year with its low-cost Datsun brand vehicles under a tie-up with a local partner.
 
The automaker said in a statement it would start producing Datsun cars at a plant in Karachi owned by partner Ghandhara Nissan, which will invest Rs4.5 billion
($41 million) over the first four years in manufacturing and sales operations after Nissan ended local production in 2010.
 
The investment is expected to create more than 1,800 jobs, according to Japan’s No. 2 carmaker.
 
The Japanese carmaker resuscitated the Datsun brand in 2014 for inexpensive vehicles to attract young, first-time customers in developing economies where some of the world’s fastest growing markets are located.
 
Nissan introduced the brand in Japan in 1932 but phased it out in the early 1980s.
 
The Yokohama-based company joins automaking partner Renault, along with Hyundai Motor and Volkswagen Group in announcing increased presence in Pakistan after the government in 2016 introduced policies to promote growth in the auto industry, dominated for decades by Japanese automakers including Toyota Motor and Honda Motor.
 
With a population of nearly 200 million people and growing, Pakistan is a market with big growth potential, posting annual sales of 200,000 cars in 2017, up 60 percent from 2014. That compared with sales of over 2 million passenger vehicles a year in neighboring India, which has a population of 1.3 billion.
 
“There’s a big population and the level of (car ownership) is low. It’s a good-sized market which is growing,” said Peyman Kargar, a senior vice president at Nissan who heads operations in Africa, the Middle East and India, adding that the country’s annual sales were likely to grow to 300,000 by 2022.
 
The Ghandhara Nissan plant, which has an annual capacity of 6,000 vehicles, would produce “several (Datsun) models based on the same platform to optimize the investment,” Kargar said, declining to name specific models.
 
In neighbouring India, Nissan markets its Datsun Go series of compact hatchbacks and people-carriers, while it launched its new Cross compact SUV in Indonesia earlier this year.
 
Comprising 6 percent of global sales, Africa, the Middle East and India is a growth area for Nissan, and Kargar said he expected to double the region’s contribution to overall sales by 2022.
 
Demand for new vehicles in the Pakistan market has grown to more than 200,000 units per year and is expected to jump 50 percent to 330,000 in 2024 or 2025, Nissan said.
 
The number of vehicles owned per 1,000 people in Pakistan is currently 20, far smaller than the 100 in China, 600 in Europe and Japan and 800 in the United States.
 
Nissan first entered the Pakistan market in 1983, selling models including the Sunny and Cefiro sedans, and the Patrol and X-Trail sport utility vehicles, all of which had been imported from Japan. But it halted production and sales of all of its models by 2010.