Sazgar Engineering to double four-wheeler production by 2026, expand NEV lineup

Sazgar Engineering Works Ltd. (SAZEW) plans to complete its four-wheeler manufacturing expansion by March 2026, doubling daily production capacity and introducing new energy vehicle (NEV) models, the company management announced at an analyst briefing on Thursday.

The expansion will increase SAZEW’s daily output from 40-50 vehicles to 90-100, as the company also seeks to strengthen its export markets—particularly for three-wheelers—and grow its local dealership network.

Sazgar currently operates 20 four-wheeler dealerships, with new centers in Mardan and Peshawar set to open soon.

SAZEW’s management reported a decline in April sales due to road closures in Sindh caused by a canal issue, as well as production adjustments related to a vehicle facelift. However, officials assured that production has returned to normal, with May figures expected to reflect the recovery.

The company raised its capital expenditures from PKR 4.5 billion to PKR 11.5 billion, citing higher plant costs and strategic planning efforts aimed at countering stagnation, supporting NEV development, and preparing for new model launches.

Regarding the facelifted H6 launch, management stated that Great Wall Motors (GWM) has maintained pricing without impacting margins. Upcoming models, including the TANK and GWM Cannon, are expected to roll out in the near future.

HAVAL delivery lead times in Pakistan remain at 2-3 months, a timeframe that has persisted over the past 1.5 to 2 years.

Amid speculation about budget changes, SAZEW management anticipates minimal impact, asserting that completely built-up (CBU) units will remain out of range compared to the company's offerings. Officials also noted that any reduction in import duties for used cars would have a gradual impact over the first two years.

Greenfield benefits under Pakistan’s auto policy apply only to existing models like HAVAL and are set to expire in June 2026. New models will not qualify for the incentives.

SAZEW emphasized it has no plans to introduce a hatchback or sedan, as GWM specializes in SUVs and pickup trucks. The company believes that any future margin declines after greenfield benefits expire will be offset by higher volumes stemming from new model launches and its expanded factory.

New models, including the TANK and H6 Plug-in Hybrid Electric Vehicle (PHEV), will be introduced under the NEV policy.

On its dividend strategy, management reiterated that SAZEW will maintain a cash buffer to support its significant capital expenditure plans and mitigate risks associated with potential global disruptions.

The company also noted that expanding its three-wheeler exports globally would require substantial capital investment.

In collaboration with ride-hailing service Yango, SAZEW recently launched a fleet of 20 locally manufactured electric rickshaws in Lahore, aimed at promoting cleaner, quieter city transportation.