KARACHI: A major automaker has threatened to shift its investment for a new plant worth $400-500 million to Iran from Pakistan citing dearth of incentives for existing assemblers in the Automotive Development Policy (ADP) 2016-21.
Pak Suzuki Motor Company Limited (PSMCL), which has over 50 per cent market share, informed the government some time back of its plan to make big investments and work on vendor development and new models.
We may shelve our investment plans in Pakistan besides rolling out new models as the ADP has nothing to offer, spokesperson for PSMCL Shafiq Ahmed Shaikh said. He claimed the car industry was dissatisfied as the new policy lacked assurance of a level-playing field.
Pak Suzuki has planned an overall investment of $1,000-1,500m in coming years in technology transfer through joint ventures with Japanese auto sector. It seems the government does not want investment from Japanese assemblers, he said.
The government should revisit the policy, he added.
Sources said Iran has become the most attractive country in terms of investment after lifting of sanctions and many companies including leading car manufacturers of the world are considering setting up their plants in Iran.
To a query whether the introduction of Suzuki Celerio in place of Suzuki Cultus this year is still intact as vendors are already preparing parts and accessories, Shafiq said the company is re evaluating its options.
In the second week of this month, PSMCL announced its fourth quarter 2015 earnings of Rs1.8 billion as against Rs311m in the same quarter of 2014. PSMCL revenue grew by 86pc year-on-year (YoY) to Rs23.5bn in fourth quarter of 2015 as the company sold 36,712 units. The volume increased due to a taxi scheme launched in the 2014-15 budget by the Punjab government. The company also offered a discount to Punjab government due to huge orders.
In 2015 PSMCL earning stood at Rs5.8bn versus Rs1.9bn in 2014. Revenues improved by 58pc YoY. The company sold 133,660 units in 2015, up by 72pc YoY.
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