KARACHI, Oct 26: Sindh Engineering Limited (SEL) has signed a franchise and technical cooperation agreement with Dong Feng Motors Company (DFMC) of China to roll out Chinese 1.5, 3.5 and 15 tons capacity vehicles, fitted with Cummins engines, from July 2003 at competitive prices.

This was stated by chairman Pakistan Automobile Corporation Limited (PACO), Azhar I. Jaffery at a press conference at the SEL’s head office at West Wharf on Saturday.

The agreement was signed in Shiyan-City last week, he said. Previously SEL was assembling Japan’s Mazda trucks T-3500. Mazda Motor Corporation of Japan had expressed its inability to supply the T-3500 chassis beyond March 2003 due to some corporate compulsion.

Talking about some other actions to follow, he said the SEL will submit a deletion programme for approval, ranging between 40-45 per cent, to the government by Nov 15. The company will then import two units each of the three series of Dong Feng models in December.

He said the company will import jigs and fixtures in February 2003 followed by revamping of technical facilities at SEL in January to April 2003.

Azhar said that the trial production will start from May 2003 followed by commercial production and sales from June/July 2003. The company intends to assemble 1,000-1,500 vehicles in its first year of operation.

He said after one year of Chinese company’s operation at SEL, the Sindh Engineering will be converted into a joint venture company with PACO and DFMC as partners and Dong Feng taking over the management of the proposed joint venture in 2004.

“SEL will become a joint venture company with Dong Feng (with Dong Feng management) only after SEL attains a sales target of 1,000 units in a year,” he added.

He said that the DFMC is the most respected name in automobile industry of China, producing 250,000 vehicles per annum. The company has joint venture/under licence arrangements with manufacturers like Cummins and Citroen. Recently Nissan of Japan has agreed to associate itself with Dong Feng forming another joint venture company in which Nissan is investing one billion dollars, he added.

SEL’s plant has however got the installed capacity of 3,000 vehicles per annum and the company is producing 2,500 vehicles per year.

In 2001-2002, SEL’s pre-tax profit was recorded at Rs25 million as compared to Rs58 million in 2000-2001 (which included Rs27 million earned from Dewan’s Motors for assembly of mini truck in the same year).

From 1973, the company has produced 25,533 units of Mazda commercial vehicles and 32,000 units of Suzuki vans, 41,104 units of Suzuki motorcycles, 1,020 units of Toyota Hiace, 2,125 units of bus and trucks bodies, 5,013 units of Hyundai mini truck and 635 units of Chinese Zabardast.