Suzuki awaits the grant of Greenfield status
Despite an estimated investment plan of $460 million in the expansion of its existing plant, M/S Suzuki Motors Company is still waiting to acquire Greenfield status from the government.
The previous government had announced an Automotive Development Policy (ADP) 2016-21 which offered several attractive incentives to the new entrants in the automobile industry of Pakistan. However, the decade-old M/S Suzuki is yet to get the status since its investment offering of $460 million in the local industry. Recently, a meeting was held between the two senior diplomats of the Japanese embassy and officials of Ministry of Industries and Production regarding this particular issue. Unfortunately, the officials were told that the company doesn’t fall under the auto policy that offers Greenfield status. The quality of cars produced by the auto manufacturer was questioned in the meeting. It is pertinent to mention here that one of the largest automakers in the country has recently put a halt to the production of its 3-decade-old iconic Mehran and replaced it with the first ever 660cc Alto. The booking of the all-new Alto has begun at a price tag of Rs.5 lacs with deliveries to start in June 2019. However, the company hasn’t yet announced the price of the hatchback, which is certainly not the right way of introducing a new product. Perhaps it is expected to start at Rs.9.7 lacs for the base model and go all the way up to Rs.12 lacs for the top of the line AGS variant. Nonetheless, Pak Suzuki stands as the top-selling auto manufacturer in Pakistan with its dominance in the hatchback category.
All the senior officials or political leaders visiting Japan are repeatedly questioned as to why the company is not being offered the Greenfield status despite considerable investments in the country. The CEO & MD of Suzuki Masafumi Harano told that the company had completed all the preparations required to begin the construction of the plant and the funds are also ready to be transferred for direct investment by Suzuki Motors Corporation, Japan. Pak Suzuki now awaits the grant of Greenfield status along with the incentives it offers for three years from the government of Pakistan. He further assured that the auto manufacturer would continue to take necessary steps for the localization process. M/S Suzuki also wants the Prime Minister of Pakistan Imran Khan to attend the stone laying ceremony of the company’s new plant which will be accompanied by the global business community of the auto sector.
The auto giant in Pakistan kicked-off its efforts to gain the Greenfield status during the 5-year tenure of the previous government. Perhaps it doesn’t fulfill the requirements to acquire the incentive-based status. Contrary to this, the other two key players of the local auto industry, i.e., Toyota Indus and Honda Atlas have repeatedly invested billions on the expansions of their plants without seeking Greenfield status.
The auto policy was introduced to bring foreign and local investment in the auto sector in the shape of new players. Since its announcement, several investors have joined hands with the global auto manufacturers in producing vehicles locally in Pakistan. The primary aim of the government was to bring more competition and end the monopoly of the three auto giants in the country. The policy has worked in the development of the auto sector; however if Suzuki gets the Greenfield status, it would raise several questions, and the new players are already opposing it. The policy doesn’t offer anything to the existing auto manufacturers in the country; a category in which Suzuki falls.
What do you think about this story? Shall the government grant Greenfield status to M/S Suzuki or stick to the auto policy which has no room for an existing auto manufacturer? Let us know in the comments space below. Stay with PakWheels for all the latest happenings in the automobile industry.