In Pakistan, a car company will soon be making Samsung mobile phones

Approval has been granted by Pakistani regulatory body, meanwhile auto material costs rise putting car makers in flux

In what seems like an odd move for all involved, Pakistan's telecommunication regulator – the Pakistan Telecommunication Authority (PTA) – has announced approval for Lucky Motor Corporation (LMC) to manufacture Samsung mobile devices.

The local automobile manufacturer is a joint venture between Lucky Group and South Korea's Kia Motors, and manufactures and distributes Kia cars built in a purpose-built plant in Karachi's Bin Qasim Industrial Park.

"The authorization to manufacture Samsung Mobile devices in Pakistan is a landmark achievement and will further revolutionize the vibrant mobile manufacturing ecosystem in the country by ensuring presence of major local and foreign players in the market," declared the regulator.

The PTA has issued similar Mobile Device Manufacturing (MDM) authorizations to 25 foreign and local companies to produce the tech in Pakistan. The devices will be both sold in the country as well as exported.

Samsung and Lucky inked the deal back in July. The production facility will be located at LMC's existing Karachi auto plant and is scheduled for completion by the end of 2021.

PTA tweeted, celebrating the job opportunity potential stemming from the new plant:

The device manufacturing plants shall be instrumental in creating new job opportunities as well as enabling affordability of mobile devices for Pakistani users.

The detail of all MDM Authorization holders is available on PTA website: https://t.co/34yO7flGR5.

— PTA (@PTAofficialpk) August 10, 2021

Samsung's decision to partner with an automobile manufacturer may seem unusual but, according to Pakistani brokerage and research firm Topline Securities, Samsung has form setting up factories in the region to serve domestic and export markets. In Bangladesh, for example, Samsung uses a local factory established in 2018 to produce 95 per cent of the 2.5 million mobile devices sold in-country.

Pakistani English-language daily The Express Tribune offers another reason the Lucky Group could be interested: the paper reported this week that an increase in prices for steel and other raw materials, plus shipping cost hikes, have caused a rise in vehicle prices even as COVID-repressed demand for cars was gradually rebounding.

The deal means Lucky Group has diversified into more affordable products, while Samsung has boosted local capacity, given local buyers a good reason to consider its wares, and diversified its manufacturing base. ®