Sazgar plans major expansion, eyes new export markets

September 25, 2025 (MLN): Sazgar Engineering Works Ltd. (PSX: SAZEW) is gearing up for a major expansion and new product introduces, as revealed in its recent corporate briefing.

 The company, which reported a record-breaking financial year, is focused on strengthening its position in the four-wheeler market while also expanding its export reach for its three-wheeler business.

Sazgar is actively exploring new export markets for its three-wheelers, with plans to expand into the Philippines, Mexico, and Afghanistan.

The company has already established a presence in Japan. However, it clarified that four-wheeler exports remain economically unfeasible without government subsidies due to competitive pricing gaps.

On the domestic front, the company has exciting plans for its four-wheeler lineup. Sazgar expects to launch the local assembly (CKD) variants of the Tank and Cannon by March 2026.

These models are strategically aimed at the premium SUV and off-road segments, where competition is currently less intense than in the Rs9-13 million SUV range.

The management anticipates that the CKD versions will be competitively priced against the current CBU (Completely Built-up Unit) imports.

To support the growing demand, particularly for its popular Haval vehicles, Sazgar is undertaking a significant capacity expansion.

The current production capacity of 40 vehicles per day in a single shift will be doubled to 100 vehicles per day.

Management further informed that this expansion, expected to be completed by March 2026, will also improve efficiency through a longer assembly line. The company also plans to expand its four-wheeler dealership network, especially in Sindh.

In addition to expanding production, Sazgar is investing in sustainability by installing a 5MW solar plant at its new facility to shift its energy mix towards renewable sources.

Sazgar's management noted that its strong financial performance, with FY25 NPAT doubling to Rs16.3bn, was largely driven by robust sales of Haval four-wheelers.

The company's focus on higher-margin vehicles has helped improve its gross profit ratio to 29.1%. While margins fluctuated due to product mix, the company remains confident in its strategy.

Sazgar is also navigating the evolving landscape of government policy. It highlighted that the benefits under the current Automobile Policy will expire in June 2026.

However, the company believes that the planned capacity expansion will enable it to sustain profitability post-policy by focusing on increased volumes.

The company also clarified that while HEVs are covered under Greenfield incentives, PHEVs are not, which results in margin differences between the two.

The launch of PHEV variants has already proven successful, with delivery times for the Haval vehicles extending to 3-4 months.

While the company acknowledges that Chinese EVs are the future, it does not view them as an immediate threat due to limited local demand.

Similarly, commercial imports are not a major concern in the SUV segment due to a 40% regulatory duty (RD).

Sazgar remains focused on localizing its four-wheeler production, which is currently in its early stages but progressing steadily.

With over 80% localization for its three-wheelers, the company is committed to reducing reliance on imported components.

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