EconomyPakistan

Toyota Assembler in Pakistan Announces Rs3bn Investment for Local Production of Parts

Indus Motor Company (IMC), the leading assembler of Toyota vehicles in Pakistan, has announced that it will invest Rs3 billion to increase the local production of parts and components for its existing models.

The company, which is a joint venture between Toyota Motor Corporation and House of Habib, said that the investment was approved by its board of directors in a meeting held on 21 February 2024.

The investment is part of the company’s overall plan to reduce its dependence on imports, save foreign exchange, and promote the local auto industry, the company said in a statement to the Pakistan Stock Exchange (PSX).

The company said that the investment will be used for plant and machinery, molds, dies, equipment and related expenses for the localisation of parts and components that will be manufactured locally for various existing vehicles.

The company expects to complete the investment by the third quarter of the calendar year 2025.

Indus Motor has been increasing the localisation of parts and components for its vehicles, which include the popular Corolla models, over the years.

Last year, the company launched its first hybrid electric vehicle, the Corolla Cross, which it claimed was 50% localised in terms of its value.

Indus Motor CEO Ali Asghar Jamali said at the time that the Corolla Cross was unique among other assembled hybrids in the country, as it had a higher percentage of local content.

The company also said that it was working on introducing new models and variants in the market, as well as enhancing its customer service and after-sales support.

Indus Motor’s announcement comes at a time when Pakistan’s auto sector is facing multiple challenges due to the economic slowdown, high inflation, and rising interest rates, which have affected the demand for vehicles.

The sector has also been impacted by the depreciation of the rupee against the US dollar, which has increased the cost of imports and forced the automakers to raise their prices.

According to the Pakistan Automotive Manufacturers Association (PAMA), the sales of cars in the country declined by 9.6% to 96,455 units in the first seven months of the fiscal year 2023-24, compared to 106,630 units in the same period of the previous year.

The government has recently announced a new auto policy for the next five years, which aims to boost the local production of vehicles, create jobs, and attract new investment in the sector.

The new policy offers various incentives and concessions to the existing and new entrants in the auto sector, such as lower taxes, reduced customs duties, and relaxed localisation requirements.

The policy also encourages the production and use of electric vehicles, which are expected to reduce the environmental impact and fuel consumption of the transport sector.

The auto sector is one of the key contributors to Pakistan’s economy, as it provides employment to thousands of people, generates revenue for the government, and supports various allied industries.

Back to top button