Philippines pushes Sazgar to raise local sourcing for EV assembly

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Philippines pushes Sazgar EV sourcing

Highlights

Sazgar Philippines inaugurated a Biñan, Laguna plant able to assemble 12,000 three-wheeled vehicles annually, currently sourcing many parts from abroad.
President Marcos urged Sazgar to increase its domestic supply chain annually, targeting full local sourcing within a year, with government support and Board of Investments incentives.
The plant's initial output is 60% electric vehicles and supports 2040 EV fleet targets, creating local jobs and supplier demand while reducing reliance on imported fuel.

Laguna plant expands local EV manufacturing

Sazgar Philippines, Inc. is being urged to build a bigger domestic supplier base as the country steps up efforts to establish an electric vehicle industry. As reported by BusinessWorld Online, Marcos made the appeal during the inauguration of the company's manufacturing and assembly plant in Biñan, Laguna on Thursday, saying many of its parts still come from abroad and asking it to grow its Filipino supply chain year after year.

The facility can assemble about 12,000 three-wheeled vehicles annually, including electric and internal combustion engine models. Sazgar Engineering Works Ltd., founded in Lahore in 1991, imports vehicle components and completely knocked-down kits from Pakistan for assembly in Laguna province, with finished units undergoing tests on mechanical systems, electrical components, brakes and lighting before release.

Marcos says the company expects to obtain all of its parts locally within about a year, adding that the government will work with the company to support that effort. He also says the project qualifies under the Strategic Investment Priority Plan because it adds at least a quarter of the value of every unit locally, with the Board of Investments projecting a higher share.

Jobs, supplier demand and EV policy goals

The plant is expected to create jobs in Laguna and open business opportunities for local suppliers of batteries, glass, upholstery, rubber and other components. Marcos says this is the type of investment the government wants, not only companies that sell to Filipinos, but companies that make products with Filipino workers and suppliers.

He says the project supports the broader push to build a domestic EV manufacturing base while reducing dependence on imported fuel. The plant's initial production mix consists of 60% electric units and 40% internal combustion engine units, and Marcos says the EV share is expected to rise as demand grows; he adds that the company is 60%-owned by Filipino investors.

Marcos says tricycles travel about 90 kilometers a day in urban areas and 110 to 120 kilometers in provincial areas, distances that can be covered on a single charge, while a full charge takes six to eight hours. He adds that the project supports the government's target of lifting the share of EVs in the country's vehicle fleet to 50% by 2040, and says agencies have been directed to prioritize EV purchases or consider EVs when leasing vehicles.

Sazgar Philippines President and Chief Executive Officer Muhammad Fahim says the company plans to support the government's EV program through local manufacturing, workforce development, partnerships with Philippine suppliers and future exports to Southeast Asian markets. Pakistan Ambassador to the Philippines Asima Rabbani says Pakistani investors have also invested millions of dollars in trucking and pharmaceutical ventures in the Philippines.

In our earlier article on the Philippines’ planned sovereign bond market reforms, we explained how the shift to a new pricing convention and the expected index inclusion could broaden the investor base and improve liquidity in government securities. We also noted that these changes alone won’t automatically translate into more factory investment or productivity gains unless they are paired with credible fiscal management, deeper corporate capital markets, and wider structural reforms that lower operating costs and support business expansion.

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