Suzuki considering two new models for Pakistan

Global head of Japanese company discusses plan with industries minister, says tax rebate needed for $430m investment

ISLAMABAD:

Pak Suzuki Motor Company (PSMC), the country’s largest carmaker, is planning to introduce two fresh variants in the local market, besides setting up a manufacturing plant for spare parts at a total investment of $430 million.

Under the new auto policy - which has been pending for quite some time - the Japanese company will look to add to its existing fleet as it looks to tap a growing market. However, an official close to the development said the investment was contingent on the government extending a tax rebate similar to that being offered to new entrants in the proposed auto policy.



According to details received here on Tuesday, PSMC will introduce a smaller car in the 660cc engine category, while also introducing a 1,600cc compact SUV.

The two new variants will take up around $110 million of the total investment. The remaining amount will go in setting up the manufacturing plant for spare parts.

Details revealed that the global head of the Suzuki company shared the investment plan with the federal minister for industries in Islamabad.

PSMC has the largest share in the country’s car market dominated by three players.

Local auto sales amounted to 93,570 units in the first five months of the ongoing fiscal year, up 66% compared to the same period last fiscal year. PSMC’s share in the five-month sales stood at 58,098 units, owed largely to the Punjab government’s taxi scheme.

The auto policy

The government has been working on finalising the auto policy for some time. It is looking to attract investment, besides offering incentives to existing and new players. The ruling PML-N is also reportedly keen on bringing a German manufacturer in the Pakistani market.

While the industries ministry had forwarded the auto policy draft to the Economic Coordination Committee, the decision was deferred pending further consultation.



PSMC’s plans

Kinji Saito, the global head of the Suzuki Motor Company, called on Federal Minister Ghulam Murtaza Khan Jatoi in Islamabad on Tuesday.  Details revealed that Kinji informed Jatoi that the company was looking to introduce the two variants, but was hoping for a tax rebate similar to the one that could be offered to new entrants in the new auto policy.

It was further said that the price of the 660cc variant would be close to that of Suzuki Mehran’s. Jatoi, however, said its price needed to be less than that of Mehran.

It was also mentioned that Mehran and Cultus variants would be discontinued in the next five years, but are likely to be replaced with fresh models.

Jatoi, in a statement released after the meeting, welcomed the company’s plans, saying that Pakistan needed fuel efficient, eco-friendly and cheaper cars to cater to the market.

The minister said that PSMC’s share in the Pakistani market was significant, but emphasised that the company needed to bring its prices down.

“Pakistan is a big market for the auto industry, therefore special feature like safety measures, fuel economy, environment friendly and affordable prices range are particular needs of our country,” the minister said.

“We are rich in human resource while Japan owns the latest technology. We can benefit from each other’s strengths.”

Jatoi also assured the Suzuki’s Global Head that protection would be extended to all companies operating in Pakistan in the upcoming Auto Development Policy.

Published in The Express Tribune, December 16^th, 2015.

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