From Zeeshan Mirza
KARACHI: Pakistan’s leading car assembler, Indus Motor Company (IMC), announced an investment of Rs3 billion to increase domestic production of parts and components of its Toyota-brand vehicles.
The investment was part of its plan to reduce its reliance on imports and support the local auto industry, said the company, which is a joint venture between Toyota Motor Corporation and House of Habib.
“We are pleased to announce that the board of directors, in its meeting held on 21 February 2024, has approved an investment of around Rs3 billion to be made by the company for additional localisation of parts and components of various existing vehicles,” the company said in a statement to the Pakistan Stock Exchange (PSX).
The statement said the move would allow the company “to reduce outflow of foreign exchange and promote the local auto industry”.
“The announced investment shall be made towards expenditure in plant and machinery, molds, dies, equipment and related expenses for localisation of parts and components to be manufactured locally for various existing vehicles.”
The planned investment will be completed by the third quarter of the calendar year 2025. The automaker in the past has hinted at increasing its product localisation.
Indus Motor has been increasing its localisation of parts and components for its vehicles, which include the popular Corolla models. Last year, the company launched its first hybrid electric vehicle, the Corolla Cross, which it said 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.
Pakistan’s auto sector has been facing challenges due to slowing economic growth, high inflation, and rising interest rates, which have dampened the demand for vehicles.
The sector has also been hit 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.
