Press Release
VIS Upgrades Long-Term Entity Rating of Sazgar Engineering Works Limited
Karachi, March 31, 2026: VIS Credit Rating Company Limited (VIS) has upgraded the long-term entity rating of Sazgar Engineering Works Limited (‘SAZEW’ or ‘the Company’) from ‘A/A1’ (Single A/A One) to ‘A+/A1’ (Single A Plus/A One). The medium to long term rating of ‘A+’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A1’ denotes strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned rating has been changed to ‘Stable’ from ‘Positive’. Previous rating action was announced on February 12, 2025.
SAZEW was incorporated in 1991 as a Private Limited Company and was subsequently converted into a Public Limited Company in 1994. SAZEW is principally engaged in the assembly and sale of automobiles and automotive parts. In the four-wheeler segment, the Company assembles and markets vehicles under Internationally recognized Chinese brands including GWM (Haval, Tank and Ora) and BAIC, comprising Internal Combustion Engine (ICE), Hybrid Electric Vehicle (HEV), Plug-in Hybrid Electric Vehicle (PHEV) and fully Electric Vehicle (EV) variants. The three-wheeler portfolio comprises of both petrol and electric variants for passenger and cargo use, with units also exported to selected international markets. The Company’s assembly plants and registered office are in Lahore.
The rating reflects SAZEW’s strengthened business profile following its successful diversification into Pakistan’s LCV and Jeep segment through the introduction of the Haval brand in partnership with Great Wall Motors. The Company’s timely entry into growing SUV and hybrid vehicle market has significantly enhanced its operational scale, revenue base and profitability. Strong market acceptance of Haval vehicles, alongside an expanding dealership network, is expected to support continued volumetric growth. Profitability has improved materially due to the higher margin four-wheeler segment and fiscal incentives available under the Automotive Industry Development and Export Policy (AIDEP) 2021-26. While margins are expected to moderate following the expiry of these incentives in June 2026, they are likely to remain above historical levels due to the shift toward higher value-added products.
The rating also takes comfort from SAZEW’s dominant position in the domestic three-wheeler market, where the Company commands a major market share, providing diversification and stability for earnings. The Company’s strategy to expand its HEV & EV lineup and ongoing capacity enhancements further supports its growth outlook. However, ratings remain cognizant of risks stemming from the cyclical nature of the auto sector, exposure to exchange rate volatility, increasing competition in the SUV segment and potential margin normalization after FY26. Sustained sales growth in the four-wheeler segment and effective product diversification will remain key determinants of SAZEW’s credit profile.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale:
https://docs.vis.com.pk/docs/VISRatingScales.pdf