Sazgar to start Haval SUV production in June next year

To compete with Sportage, Tucson, X70, MG-HS

Sazgar, the largest rickshaw-maker in Pakistan, has received the government's greenfield status to manufacture Haval H6 and Jolion.

The company had already announced the prices of its two new vehicles. The 2,000cc Haval H6 is Rs6.3 million and the 1,500cc Turbo Jolion is Rs5.52 million. The two five-seater crossover SUVs will fall in the same category as the Kia Sportage, Hyundai Tucson, Proton X70, DFSK Glory 580, and MG-HS.  

Sazgar notified the Pakistan Stock Exchange on Friday that it has received the greenfield status, which gives makers incentives by reducing duties for new car companies.

Sazgar had announced its plans to enter the Pakistani car market with another Chinese carmaker, BAIC. It said it would launch the D20 car that has both hatchback and sedan versions. It plans to launch the X25 crossover and BJ40-Plus off-roader SUV.

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Haval is one of the top-selling companies in the SUV segment in China and outstrips the Hyundai and MG Motors, according to the company website. It is a subsidiary of Great Wall Motors and focuses on SUVs and pickups.     

Sazgar is listed on the Pakistan Stock Exchange. It exports three-wheelers to 20 countries, including Japan. The company has a capacity to produce 24,000 units annually.

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Initially, the industry was expecting that companies with greenfield status would launch their cars by the end of the fiscal year 2021 to take advantage of the incentives given in the policy.

However, sources disclosed that companies with greenfield status can get approval from the government to bring new cars in even after the end of FY2021. Tax incentives for five years under the policy will not be available after June 2026. This means car models brought after June 2021 will not get tax incentives for a complete five-year period.

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.

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Apart from Sazgar, nearly a dozen companies have received the greenfield 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 Taha Madani, a research analyst at 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."

He said that the thought that new car companies such as Sazgar-Haval, which 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 to the hatchback segment, which new companies have largely been ignoring.”

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