Sunday, April 14, 2024

Pakistan’s Leading Car Assembler ‘Indus Motor’ to Invest Rs. 3 Billion to Scale Up Local Production of Parts

Indus Motor Company (IMC), a prominent car assembler in Pakistan, has announced a substantial investment of Rs3 billion aimed at bolstering the domestic production of parts and components for Toyota vehicles.

This strategic move is designed to lessen the company’s dependence on imports and contribute to the growth of the local auto industry. IMC, a collaboration between Toyota Motor Corporation and House of Habib, is set to allocate the funds towards acquiring machinery, molds, dies, equipment, and other related expenses necessary for localizing the production of various vehicle components.

By ramping up local production, IMC aims to curtail the outflow of foreign exchange and foster the development of Pakistan’s auto sector.

The investment, scheduled for completion by the third quarter of 2025, underscores IMC’s commitment to increasing the localization of its vehicle parts and components. This initiative builds upon IMC’s ongoing efforts to enhance local production, particularly for its flagship models such as the Corolla series.

In a bid to showcase its dedication to local manufacturing, IMC introduced the Corolla Cross, its inaugural hybrid electric vehicle, last year. Notably, the Corolla Cross boasted a 50% localization rate in terms of its value, highlighting IMC’s strides towards incorporating more locally sourced components into its vehicles.

IMC’s CEO, Ali Asghar Jamali, emphasized the unique position of the Corolla Cross in Pakistan’s hybrid car market, citing its higher proportion of locally manufactured parts compared to other assembled hybrids.

The decision to invest in domestic production comes amidst challenges facing Pakistan’s auto industry, including sluggish economic growth, high inflation, and rising interest rates, which have dampened consumer demand for vehicles.

The depreciation of the Pakistani rupee against the US dollar has compounded the situation by driving up the costs of imported components, necessitating price adjustments by automakers.

IMC’s substantial investment underscores its proactive approach towards addressing industry challenges, promoting local manufacturing, and fortifying Pakistan’s automotive sector in the face of economic headwinds.

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