January 22, 2021 (MLN): Sazgar Engineering Works Limited has submitted a progress report in respect of utilization of proceeds of Right Issue of Rs. 710 million for the setting up of company’s four-wheeler project, up to December 31, 2020.
According to the report, 50.48% of the total funds, i.e. Rs. 358.42 million, has been used for purchasing plant and machinery, repaying loans (partially), and meeting working capital requirements (partially) of the company.
The company’s four-wheeler launch is one of the most awaited and talked-about projects in the automobile industry. The company’s partnership with BAIC, one of the largest Chinese automakers, to launch four cars in Pakistan gained intense popularity after the PAPs Auto Show that took place in February 2020. However, the project was stalled temporarily after the outbreak of Coronavirus, which forced several companies to shut down operations.
In partnership with BAIC, Sagzar Engineering is setting up a vehicle assembly facility in Pakistan, which is reportedly set to complete soon. The company is planning to make the cars available for sale before the end of FY21.
Besides, the company is also working rigorously on the large-scale production of EV three-wheelers. This was made possible after the Prime Minister gave a go-ahead to Electric Vehicle policy in November 2019 and approved it for implementation in June 2020.
The policy, which covers almost all vehicles including buses, trucks, two- as well as three-wheel vehicles, provides several incentives to both manufacturers and purchasers in order to encourage cutting of air pollution and damage to climate.
According to media reports, Sazgar’s EV rickshaws will be costlier than the traditional ones, costing approximately Rs. 400,000 as opposed to the petrol-driven three-wheelers that cost around Rs. 250,000. However, this differential will be automatically covered by the drop in expenditure incurred on purchase of petrol.
Once the company starts producing the vehicles on a large-scale, the same would be exported to various countries. Right now, the company is exporting its three-wheelers to Japan.
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