How SAZEW achieved 34.5 billion in sales in 9 months

SAZEW - Fundamental Analysis
Posted by: Jabran Kundi 0

How SAZEW achieved 34.5 billion in sales in 9 months

Sazgar Engineering Works Limited (SAZEW) has seen a significant boost in its financial performance, driven primarily by the popularity of the Haval H6 Hybrid Electric Vehicle (HEV). In their recent Analyst Briefing, the company reported net sales of Rs34.5 billion for the first nine months of the fiscal year 2024 (9MFY24), marking an impressive 170% increase compared to the same period last year.

Net SalesRs12.8 billionRs34.5 billion170%
Gross Margins11.62%25.8%
Source: Company accounts, JS Research

The gross margins rose from 11.62% in 9MFY23 to 25.8% in 9MFY24, leading to an earnings per share (EPS) increase to Rs73.59, which is 8.5 times higher than the previous year. This remarkable growth is largely due to the success of the Haval H6 HEV, the first locally manufactured hybrid vehicle in Pakistan.

Market Leadership and Competitive Pricing

SAZEW has achieved the highest gross margins in Pakistan’s auto sector, driven by a strategic shift towards the high-end SUV segment. The company’s market share in the SUV category increased significantly from 9.8% in March 2023 to 38.8% in March 2024.

The management highlighted that other high-end Japanese SUVs are priced 20% to 30% higher than the H6 HEV, thanks to China’s position as the largest auto manufacturer, which makes Chinese parts more economical. The sustainability of these margins is expected to depend on the maintenance of the current duty structure in future budgets.

Production Capacity and Utilization

SAZEW’s 4-wheeler production capacity stands at 24,000 units per annum, but current utilization is only at 15% to 20%. The company’s sales are predominantly from the GWM Haval line, with hybrid models accounting for 60% to 90% of these sales. Increased production has reduced lead times from 4-6 months to 2-3 months.

New Models and Future Plans

The company is testing two new models, the Tank500 and ORA-03 EV, to gauge market response before deciding on local assembly. The Tank500 is positioned as a cost-effective alternative for high-net-worth individuals, priced at one-third the cost of similar imported vehicles like the Land Cruiser. The ORA-03 EV is expected to remain a niche product due to the limited EV charging infrastructure in Pakistan.

SAZEW has also obtained a 3-wheeler EV license from the Punjab government. However, the high cost of imported batteries makes these models more expensive than other three-wheelers in the market.

Recently Launched Haval Jolion

The company has introduced the Haval Jolion hybrid, positioned to compete with the Toyota Corolla Cross. Despite concerns about potential sales cannibalization of the H6 HEV, management has observed no such impact due to the price difference between the two models.

Localization Efforts

SAZEW’s aims to increase localization for the 4-wheeler segment according to the current auto policy. The high cost of imported batteries also affects the pricing of their EV Rickshaws, which, despite 80% localization, cost over Rs1 million. The company plans to localize parts through vendors without significant capital expenditure for in-house production.


SAZEW‘s financial performance in 9MFY24 showcases the impact of strategic product shifts and market positioning. The company’s continued focus on high-end SUVs, coupled with competitive pricing and plans for new models, positions it well for future growth.

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