Indus Motor Company (IMC), Pakistan’s prominent car assembler and a joint venture between Toyota Motor Corporation and House of Habib, has announced a substantial investment of Rs3 billion to enhance domestic production of parts and components for Toyota-brand vehicles. The move is part of IMC’s strategy to decrease dependence on imports and bolster the local auto industry.
In a statement to the Pakistan Stock Exchange (PSX), IMC stated that the investment, approved by the board of directors in a meeting on February 21, 2024, aims to minimize the outflow of foreign exchange and foster the growth of the local auto sector. The allocated funds will be utilized for plant and machinery, molds, dies, equipment, and related expenses to localize parts and components for various existing vehicles.
This investment, scheduled to be completed by the third quarter of 2025, aligns with IMC’s ongoing efforts to increase the localization of parts, particularly for popular models like the Corolla. The company had previously introduced the Corolla Cross, its first hybrid electric vehicle, with 50% localization in terms of value.
IMC’s CEO, Ali Asghar Jamali, emphasized the uniqueness of the Corolla Cross in having a higher percentage of local content compared to other assembled hybrids in the country. The decision to enhance localization comes at a challenging time for Pakistan’s auto sector, facing economic slowdown, high inflation, and increased interest rates, resulting in subdued vehicle demand. Additionally, the depreciation of the rupee against the US dollar has raised import costs, prompting auto manufacturers to adjust prices accordingly.
