With the government attracting foreign investment, Greenfield category proposed by government carries subsidies for investors and has so far attracted several foreign-local ventures. Sazgar Setting Up Plant to Manufacture Cars with Chinese Partner, worth 1.76 billion, with the capacity of 24000 units per year.
Earlier Sazgar Engineering works were intending to expand its three-wheeler, CNG auto rickshaw but after realizing the potential of automobile sector it has decided to shift resources on the production of four wheeler jeeps and passenger vehicles, with manufacturing, assembling, selling and after sale services.
The company has signed the MOU in this regard with a Chinese partner in may, 2017 and it is expected that this project will complete by June 2019. It is also in the process of acquiring a green signal from the regulatory body.
Existing production facility of Sazgar is five acres, while it also has ownership of 27 acres in Raiwind, Lahore. Earlier the land proposed for expansion of Auto rickshaws will be utilized for the new project.
Company earlier decided to expand its Auto rickshaw production from 20,000 to 30,000 units with the budget of 330 million but now it has shifted its objective and has decided to expand rickshaw production with increase in working hours as its demand is also souring with substantial rate. It contributes a big chunk in catering middle class earnings.
Sazgar has share price of Rs191.19, after increase of 0.83 percent on Wednesday. Net profit for the last quarter ending on September was calculated to be Rs 37.61 million compared to Rs 29.47 million last year in same quarter.
Lack of proper public transport system and rise in middle class segment has raised demand for three wheelers, also services like Careem and Uber with their mobile app services have contributed to the need of Rickshaws.