By the late 1990s, the Dewan Group had firmly established itself as a force in various industries, but Dewan Mohammad Yousuf Farooqui had a new vision—Pakistan's automobile industry. He recognized the potential in a country where the demand for vehicles was skyrocketing. With a booming middle class and a government eager to promote local manufacturing, the time was ripe to enter the auto sector.
This chapter explores how Dewan Group ventured into the automobile industry, securing key international partnerships, overcoming regulatory hurdles, and facing fierce competition to become a leading name in Pakistan's car manufacturing landscape.
---
Laying the Foundation: The Decision to Enter Auto Manufacturing
The boardroom at Dewan House was filled with a tense but excited energy. Salman Farooqui, Yousuf's younger brother and COO, sat next to Nadia Hussain, the company's Chief Financial Officer, and Sikandar Mehmood, Head of Operations.
Yousuf placed a proposal on the table, his eyes gleaming with ambition.
"It's time we enter the auto industry."
Salman frowned. "It's a highly competitive sector. Suzuki and Toyota dominate the market. Are we ready for this?"
Nadia adjusted her glasses, flipping through the proposal. "The investment required will be huge, and the risks are significant."
Yousuf leaned forward, his voice steady. "But so is the reward. Pakistan's auto sector is growing rapidly. If we establish our brand now, we can become a dominant player within a decade."
---
Strategic Partnerships: A Deal with Hyundai and Kia
The first step was securing an international partnership. After months of negotiations, Dewan Group signed agreements with Hyundai Motor Company and Kia Motors, securing licensing rights to assemble and distribute their vehicles in Pakistan.
During a signing ceremony in Seoul, South Korea, Yousuf shook hands with Hyundai's Regional Director, sealing the deal.
"This partnership marks the beginning of a new era for Pakistan's auto industry," Yousuf declared to the press.
The agreement allowed Dewan Group to import Completely Knocked Down (CKD) kits and assemble them locally, ensuring quality while keeping costs manageable.
---
Building the Assembly Plant: A Race Against Time
To manufacture vehicles at scale, Dewan Group established a state-of-the-art assembly plant in Sujawal, Sindh. The plant was equipped with cutting-edge robotics and quality control systems, ensuring international standards.
During a site visit, Sikandar walked alongside Yousuf, inspecting the progress.
"We're on track to begin production in six months," Sikandar reported.
Yousuf nodded, watching workers install the assembly line. "Good. The sooner we hit the market, the better."
---
The First Car: Launch of Hyundai Santro
In 2000, Dewan Group launched Hyundai Santro, an affordable yet stylish car aimed at Pakistan's middle class. The response was overwhelming—orders flooded in, dealerships saw record footfall, and the media hailed it as a game-changer.
At the launch event, Yousuf addressed the audience:
"Pakistan deserves reliable, affordable, and stylish vehicles. The Hyundai Santro is our promise to the people."
By the end of the first year, over 10,000 units had been sold, firmly establishing Dewan Group as a rising force in the auto industry.
---
Challenges and Market Resistance
Success was not without obstacles. Established players in the industry lobbied against Dewan Group, trying to block its expansion. Banks hesitated to finance auto loans for Hyundai Santro buyers, fearing competition with local favorites.
In a heated meeting with State Bank of Pakistan officials, Yousuf argued his case.
"Competition will only strengthen the industry. The people deserve options, and we are here to provide them."
Gradually, the resistance softened, and Dewan Group secured the necessary support to continue operations.
---
Expanding the Lineup: SUVs and Commercial Vehicles
Buoyed by the success of the Hyundai Santro, Dewan Group expanded its portfolio, launching:
Kia Spectra (2001): A sedan competing with Honda and Toyota.
Hyundai Shehzore (2002): A commercial pickup truck that became a favorite among businesses and transporters.
Hyundai Tucson (2004): A stylish SUV targeting the upper-middle class.
Each new model brought new challenges but also solidified Dewan Group's place in the industry.
---
Economic Turmoil and Setbacks
By 2008, Pakistan's economy faced a downturn. Inflation soared, and the auto industry suffered as purchasing power declined. Dewan Group struggled to maintain operations, with banks tightening credit lines and suppliers demanding payments upfront.
In an emergency board meeting, Salman voiced concerns.
"We need a survival strategy. Either we downsize operations or secure urgent funding."
Yousuf sighed, looking out the window. "We won't abandon our dream. Let's explore restructuring options."
Despite efforts, the company suspended production in 2010, marking a temporary exit from the auto sector.
---
A Comeback on the Horizon
Though Dewan Group's auto operations halted, Yousuf never gave up. By 2016, as the economy stabilized, plans to re-enter the market were already underway.
At a private dinner with Hyundai executives, Yousuf raised a toast.
"We took a hit, but we're not out. The future belongs to those who dare to fight for it."
---
Conclusion
Chapter 13 detailed Dewan Group's bold entry into the automobile industry, from securing international partnerships to launching successful vehicles. Despite setbacks, the vision for a thriving local auto sector remained alive, setting the stage for an anticipated comeback in the years ahead.