Sazgar Engineering plans Rs11.5bn expansion to boost vehicle production capacity

Sazgar Engineering Works Limited (SAZEW) has announced an Rs11.5 billion expansion project aimed at increasing its vehicle production capacity by March 2026. 

The company’s plan places special emphasis on hybrid and electric vehicles, positioning it at the forefront of Pakistan’s transition to cleaner mobility, according to Insight Securities. 

Sazgar plans to raise its daily production from around 40 vehicles to 100 units within the next 18 months. The expansion will focus on producing hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and battery electric vehicles (BEVs). 

While the expansion aims to establish Sazgar as a leader in the clean mobility sector, analysts warn that challenges such as market volatility, execution risks, and uncertain government policies could impede progress. A key part of the strategy involves the upcoming roll-out of Pakistan’s New Energy Vehicle (NEV) policy. 

Sazgar has already introduced fully electric vehicles, such as the Ora, and a PHEV model, the Tank-500. The company also plans to locally assemble additional models, including the Canon Alpha pickup truck, which will incorporate PHEV technology. By diversifying its product offerings to include premium SUVs, mass-market hybrids, and electric vehicles, Sazgar aims to cater to a wide range of consumer preferences under the forthcoming NEV policy.

Despite the aggressive expansion plan, Sazgar faces several hurdles. The expiration of Greenfield incentives in June 2026 could affect margins in the short term. 

Risks to the investment include potential currency depreciation, which could increase the cost of imported parts, lower-than-expected demand due to economic challenges, fluctuating raw material prices, heightened competition from other automakers entering the hybrid and EV markets, and possible changes to the regulatory landscape.