Pakistan's government is in discussions with foreign automakers including Renault and Nissan under its efforts to attract fresh investments in local assembly operations. Previous talks also included Volkswagen (VW), according to a Reuters report, citing a senior government official. "We expect that there will be one or two foreign investors coming into Pakistan," said Miftah Ismail, chairman of Pakistan's Board of Investment. He has held discussions with Nissan and Renault for some time while talks with Fiat started last month, he reportedly said.
 

Significance: The official's remarks reflect the government's recently unveiled policy to encourage new investments through tax breaks. Under the plan, the government is wooing new players while extending some benefits for reviving existing assembly and manufacturing facilities. Pakistan's light-vehicle market is largely controlled by three players – Honda, Suzuki, and Toyota – which operate through local joint ventures. The government's efforts are aimed at bolstering competition in the local market, where locally assembled cars are sold at relatively high prices but lag imported vehicles in quality and specifications. The official's remarks clarify the initiative, although reports had suggested the government was trying to woo Ghandhara Nissan to restart its assembly operations at a shuttered plant. The government's efforts to attract a new player could founder on the deterrents to fresh investment from the country's history of political instability as well as its small market.