German consul says it is unclear whether Volkswagen would pursue the project further in Pakistan or not
- Volkswagen was unable to bring necessary machinery.
- Automaker yet to decide how to pursue this project.
- Premier Motors signed agreement with Volkswagen in 2018.
German automaker Volkswagen’s plan to establish a manufacturing plant in Pakistan has been stalled due to an import curb imposed by the government about 18 months ago, The News reported Saturday.
“The vehicle manufacturing company was not allowed to bring the necessary machinery, which stalled the project,” Dr Ruediger Lotz — German Consul General in Karachi — told a meeting at the Karachi Chamber of Commerce and Industry (KCCI).
“Even if Volkswagen is allowed to bring the machinery now, it would take at least one and a half years more to start production. At the moment, it is unclear whether Volkswagen would pursue the project further or not, which would be a pity, but it is one of the negative results of the economic problems of Pakistan,” he said.
“I am regularly in contact with the person responsible for international affairs at Volkswagen, but I think at the moment, they are yet to decide how to pursue this project.”
Pakistan Premier Motors Limited in 2018 signed a legal agreement with Volkswagen for the manufacturing of commercial vehicles.
The agreement was signed for the manufacturing of commercial vehicles under the licensing contract of a completely knocked down (CKD) assembly in Karachi.
However, Pakistan banned the import of all non-essential luxury goods in 2022 when the current account deficit spiralled out of control and its foreign exchange reserves tumbled while the Pakistani rupee plummeted to historic lows against the US dollar.
Lotz said Pakistan should expand its trade with Germany beyond textiles, which make up 85% of its exports to the European nation.
He praised the quality and professionalism of Pakistan’s textile sector but said there was potential to increase trade in other areas.
“The exports need to be diversified to further improve the existing trade volume,” the envoy said.
Delay in Germany visas
Commenting on concerns expressed over delays in the issuance of visas, the German envoy said that he was aware of the problem, which was due to an increased number of visa applications.
“We have about twice as many applications as we had some five years ago before COVID, but the number of staff is the same, who can only process a certain amount of visa applications per day. I ask my staff to give preference to students and businessmen seeking visa appointments.”