Pakistan’s auto industry seems to be growing at a rapid pace following a spike in the interest of auto manufacturers across the globe to invest in the country. It is recently reported that Suzuki Motor Corporation (SMC) of Japan has informed the federal government of Pakistan that the accumulated investment made by Pakistan Suzuki Motor Company (PSMC) and its vendors will touch $660 million mark.
The move indicates that the PSMC is trying to muster additional market share in the local auto industry. Subsequently, as per the Auto Policy 2016-21, new entrants in the country’s auto industry can avail certain benefits and incentives for five years. Also, in a letter to Finance Minister Ishaq Dar, MC Managing Officer and Executive General Manager Global Automobile Operations Kinji Saito requested him that same benefits and incentives should also be given to existing market players for at least two years from the start of the mass production of new models.
“If the same two years (of) incentives and benefits are given, then Suzuki is committed to invest in setting up a state-of-the-art new greenfield plant and it would introduce new and advance models,” the letter said.
As per the break-up of the investment, the company said that the total expected investment is $460 million, which includes foreign investment of $250 million including the 80-acre plot which is already been bought by PSMC. Also, investment generated locally through the reserves of the company and bank borrowings amounts to $210 million. Adding to that, vendors are expected to invest $200 million while the annual volume of local parts purchase is expected at PKR 18.72 billion.
The company believes that its new assembly plant will have the capacity to manufacture almost 100,000 vehicles per year. Also, it is believed that it will start manufacturing new models within the first three months of the completion of the plant.