The cars fall in Sportage, Tucson and MG HS category
After revealing its plans to launch Chinese automaker BAIC cars in Pakistan in 2021, the largest rikshaw maker in Pakistan Sazgar has now announced that it will also be introducing another Chinese brand Haval in Pakistan.
The company is expected to launch 2.0 or 2000cc Haval H6 and 1500cc Turbo Jolion after September this year. The two five-seater crossover SUVs will compete with Kia Sportage, Hyundai Tucson, Proton X70, DFSK Glory 580, and MG HS.
Sazgar has already announced its plans to enter Pakistan’s car market with another Chinese carmaker BAIC D20 that has a hatchback and a sedan version. It also plans to launch a crossover X25 and an off-roader SUV BJ40-Plus.
Haval is one of the market leaders in China in the SUV segment and leads ahead of Hyundai and MG Motors, according to the company’s details on its website. It is a subsidiary of Great Wall Motors and focuses on SUVs and pickups.
Listed on Pakistan Stock Exchange (PSX), Sazgar prides itself on exporting three-wheelers to 20 countries, including Japan.
Sazgar’s assembly line is near completion and trial production may start in April. According to sources privy to the matter, the company may start selling its locally assembled BAIC cars within the next three months. The company has the capacity to produce 24000 cars annually.
The company will be assembling the cars in Pakistan under its green-field status, which it received under the government’s Auto Development Policy 2016-21.
Initially, the industry was expecting that companies with the green-field status must launch their cars by the end of the fiscal year 2021 in June to avail the incentives given in the policy.
However, sources privy to the matter disclosed that companies with greenfield status can get approval from the government authorities to bring new cars even after the fiscal year 2021 ends in June. But the tax incentives of five years under the policy couldn’t be availed after June 2026. It means car models brought after June 2021 will not get tax incentives for a complete five-year tenure.
The government has launched the policy to attract foreign investment and help increase competition in the auto sector, which has long been dominated by Japanese carmakers Suzuki, Toyota, and Honda.
Apart from Sazgar, nearly a dozen companies have received the green-field status, including United Motors, KIA, Regal Motors, Changan, MG Motors, Proton, Volkswagen and Hyundai.
“There was little acceptability for new brands among the Pakistani people in the past,” said Research Analyst Taha Madani of BMA Capital. “But that attitude is now changing as new companies are launching cars with way more features as compared to cars of established players in the country in similar price brackets.”
“I think new car companies such as Sazgar-Haval, who are coming in the high-end segment will mostly hurt Honda sales. Toyota will not be affected because of its comparatively low-priced parts and resale value while Suzuki caters the hatchback segment, which new companies have largely been ignoring,” he explained.
The stock price of Sazgar stood at Rs146 on March 11, a day prior to the company’s announcement that it has signed vehicle assembly technical and cooperation agreement with one more Chinese automaker. It crossed Rs183 on March 17.