Indus Motor Company, Pakistan’s Toyota-brand vehicle manufacturer, is banking on the success of its new hybrid car, the Corolla Cross, at a time when petrol prices in the nation have already reached a record high and are expected to rise further.
“Hybrid vehicles will do well because they consume 50% less fuel,” stated Indus Motor Company CEO Ali Asghar Jamali at a news conference on Wednesday.
“HEVs are the most long-term solution to the country’s economic issues.”
“Pakistan is one of the most vulnerable to climate change and requires strategic measures on all fronts to address these challenges.”
HEVs, according to Jamali, are the most obvious alternative for reducing carbon dioxide emissions in fossil fuel-dependent countries like Pakistan and India, which have 62% and 75% of their energy mix made up of fossil fuels, respectively.
According to Global Carbon Budget 2022, Pakistan’s annual CO2 emissions in 2021 were 229.51 million tonnes, 9% more than 210.38 million tonnes in 2020.
“Toyota has made a $100 million investment in Pakistan to produce HEV vehicles, and the Toyota Corolla Cross, Pakistan’s first locally manufactured HEV SUV, will be launched soon,” he said.
The Toyota Corolla Cross is projected to be released by the end of 2023 or early 2024.
According to Jamali, the use of hybrid technology will also result in a reduction in import bills, as 30 thousand units of HEVs will save approximately $37 million per year.
Meanwhile, Jamali stated that despite a 55% decrease in production, the company has not laid off any staff.
“The country’s automobile sector faces major challenges, including weak demand, rapid price escalation, expensive auto financing, higher taxes, and deteriorating macroeconomics,” Jamali stated.
He also stated that, despite the uncertainties surrounding supply-side recovery, they had not decided to lay off any employees.
He revealed that the company’s volumetric sales would drop by 58% from January to June 2023.
Jamali stated that the local auto sector has been dealing with the issue of letters of credit for quite some time, making it difficult for the industry to reach production targets, which has a negative impact on sales.
Furthermore, he noted, the import of used automobiles is gaining traction, wreaking havoc on the already battered local auto industry, since overall used car imports exceed the production of several OEMs (Original Equipment Manufacturers).
He also stated that over 6,000 old cars were imported in the fiscal year 2022-23, with over 1,800 units imported solely in May and June of this year.
“In the presence of minimum foreign exchange reserves held by the State Bank of Pakistan, the government should refrain from permitting the policy of importing used cars and instead support the local auto industry, which is producing cars locally,” Jamali added.
He went on to say that the industrial expansion of the auto industry is inextricably tied to a well-planned import strategy and that the growth of the local auto industry would never be realized if the government openly allowed the import of used automobiles.
“This issue of used car imports is also nullifying the plausible localisation achieved by the local auto industry, both in terms of parts and future localization plans,” he explained.