Indus Motor to invest Rs3 billion in localising Toyota parts

Our Correspondent
Friday, Feb 23, 2024

KARACHI: Indus Motor Company Limited said on Thursday it would invest around Rs3 billion to increase the local production of parts and components for its Toyota-brand vehicles.

The company, which is a joint venture between Toyota Motor Corporation and House of Habib, a Pakistani conglomerate, said the investment was part of its plan to reduce its reliance on imports and support the local auto industry.

“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).

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 localization of parts and components to be manufactured locally for various existing vehicles.”

The planned invement will be completed by the third quarter of the calendar year 2025. The automaker in the past has hinted at increasing its product localization.

Indus Motor has been increasing its localization 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 percent localized 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 the 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 U.S. dollar, which has increased the cost of imports and forced the automakers to raise their prices.