KARACHI: Pak Suzuki Motor Company (PSMC) – the country’s largest car manufacturer with over 50% market share – has decided to launch the standard model of Suzuki Celerio in March 2017, confirmed a company official Tuesday.
A formal announcement, according to reports circulating on social media and Suzuki Pakistan’s official Facebook page, is likely to be made by the company today (Wednesday).
“We are confident that the government will provide some incentives to us under the new auto policy. Therefore, the company has decided to launch its standard model of Celerio in March 2017,” a company official said on condition of anonymity.
Celerio is a 1,000cc engine car that Pak Suzuki plans to replace with Suzuki Cultus, a model it launched in year 2000 that replaced Suzuki Khyber.
This brings a complete shift in company’s earlier stated policy in which it said that all its new investments plans are contingent on the government offering the same incentives it was offering to new entrants in the Automotive Development Policy 2016-21.
All other variants of Celerio and car models will be launched from the company’s new plant that it plans to establish, provided the government allows similar incentives like the new entrants, the company official added.
Based on the earlier policy, the company in October flatly denied that it was launching any new model in the next two years. However, the top management of the company has again met with Finance Minister Ishaq Dar, and people close to the matter say that he has given some kind of hope to the three existing carmakers.
Pak Suzuki has been requesting the government to provide it with similar incentives to the ones offered to new entrants so that it establishes its new Greenfield plant with an investment of over $430 million. However, the government was unimpressed until now.
The Express Tribune announced the company’s intention to launch two new variants in the local market last year; the announcement was made by the Suzuki Global Head during a meeting with the Minister for Industries.
In 2015, the company also revealed details that the two new models would take up around $110 million of the total investment of $430 million planned by the company. The rest would be spent in setting up the manufacturing plant for spare parts.
However, at the time, the company had specifically stated that the investment was conditioned on incentives.
Pak Suzuki, listed on the Pakistan Stock Exchange as PSMC, was trading at Rs390.97 per share at the start of July. It has now gone up to Rs586.99 per share, up massively by over 50%, outperforming the KSE-100 index that has increased by 24.3% during the same time.
Suzuki Motor Company Global Head Kinji Saito met Federal Minister for Industries and Production Ghulam Murtaza Khan Jatoi in December last year, where he, along with Suzuki’s other top officials, urged the government to offer the same incentives it was offering to new entrants.
The government, however, had not offered any major incentives to the existing top three carmakers because it was hoping to attract new automobile manufacturers.
The new policy was approved after a hiatus of almost two and a half years and offered tax incentives to new entrants to help them establish manufacturing units and compete with the three well-entrenched assemblers.
Published in The Express Tribune, December 21st, 2016.