Indus Motor Company, the leading assembler of Toyota-brand vehicles in Pakistan, has achieved a significant milestone by becoming the first company in the country’s four-wheeler segment to embark on exports. The company recently inked an agreement with Toyota Egypt, and its inaugural shipment has already been dispatched this month, as confirmed by Chief Executive Ali Asghar Jamali.
Indus Motor Company highlighted that the export of semi-processed raw materials to Toyota Egypt signifies the beginning of a new era for original equipment manufacturers (OEMs) in Pakistan. The company has ambitious plans to further expand its exports in this direction, opening up new avenues for growth and diversification.
While this achievement is noteworthy, Jamali emphasized that it is premature to view it as a transformative moment for Pakistan’s struggling auto industry. The sector has been grappling with challenges arising from constraints on the issuance of Letters of Credit (LCs) and import restrictions due to low foreign exchange reserves. Although the State Bank of Pakistan (SBP) has lifted certain restrictions, it will take time for normalcy to be fully restored.
Moreover, the depreciation of the Pakistani rupee and high inflation have led to a surge in automobile prices, while record-high key interest rates have deterred buyers from pursuing financing options. Consequently, several players in the auto sector have announced temporary plant shutdowns in response to the difficult operating environment.
Jamali acknowledged that the current export capacity is limited due to raw material constraints within the country. However, he expressed optimism for the future, stating that successful exports to Toyota Egypt could help instill confidence and pave the way for exporting additional parts. He also expressed hope that other manufacturers would follow suit and explore export opportunities, contributing to the growth and development of Pakistan’s automotive industry.
Indus Motor Company’s partnership with Toyota Egypt is viewed as the first step in meeting the requirements outlined in the Auto Industry Development and Export Policy (AIDEP) 2021-2026, according to a statement from the company. This milestone achieved by Indus Motor Company sets a precedent for other assemblers in the auto sector to consider export opportunities, thereby fostering the advancement of Pakistan’s automotive industry.
As the company charts a new course with its foray into exports, the automotive sector in Pakistan looks towards a future of potential growth and resilience, buoyed by successful collaborations and a conducive policy environment.
