KARACHI: Pakistan’s leading car assembler, Indus Motor Company (IMC), announced this week it would invest Rs3 billion ($10.7 million) to increase domestic production of parts and components of its Toyota-brand vehicles.
The investment plan aims to reduce the company’s reliance on imports and support the local auto industry, the joint venture between Toyota Motor Corporation and House of Habib said.
“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 localization of parts and components of various existing vehicles,” the company said in a statement to the Pakistan Stock Exchange (PSX) on Thursday, adding that the move would allow the company “to reduce outflow of foreign exchange and promote the local auto industry.”
“The announced investment shall be made toward expenditure in plant and machinery, molds, dies, equipment and related expenses for localization 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.
Indus Motor has been increasing the localization of parts and components for its vehicles, which include popular models of the Corolla. Last year, the company launched its first hybrid electric vehicle, the Corolla Cross, which it said was 50 percent localized.
Pakistan’s auto sector has faced challenges, particularly since last year, due to slowing economic growth and high inflation and interest rates, which have dampened the demand for cars. The sector has also been hit by the depreciation of the rupee against the US dollar, which has spiked the cost of imports and forced automakers to significantly raise prices.
