Suzuki Motor Corporation (SMC) of Japan has informed the federal government that total investment by Pak Suzuki Motor Company (PSMC) and its vendors will touch $660 million.
New entrants to the auto sector will receive certain incentives and benefits for five years under the Auto Policy 2016-21. In a letter to Finance Minister Ishaq Dar, SMC Managing Officer and Executive General Manager Global Automobile Operations Kinji Saito requested him that the same incentives and benefits must be given to existing players for two years from the start of the mass production of new models.
“If the same two years (of) incentives and benefits are given, then Suzuki is committed to investment in setting up a state-of-the-art new greenfield plant and it would introduce new and advance models,” the letter said.
Giving the breakup of investment, the Japanese official said total expected investment is $460m, which includes foreign investment of $250m inclusive of an 80-acre plot already purchased by PSMC. Investment generated locally through the company’s reserves and bank borrowings amounts to $210m.
Vendor investment is expected to be $200m while the annual volume of local parts purchase is expected at Rs18.72 billion.
The company informed the government that PSMC will create approximately 3,000 direct jobs while its vendors will add 24,000 jobs as a result of this investment. After adding 324,000 indirect jobs, the total number of jobs will cross 350,000.
The company said the plant will have the capacity of producing 100,000 vehicles per year. It will start producing new models within three months of the plant’s completion.