Indus Motor announces Rs3bn investment in localization of parts

KARACHI: Leading automaker Indus Motor Company Limited announced an investment of around Rs3 billion (approx. $10.76 million) for enhancing the localization of production.

The company, the maker of Toyota-brand vehicles in the country, shared the development in its notice to the Pakistan Stock Exchange (PSX).

“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,” read the notice.

Indus Motor shared that the latest investment is part of the company’s overall plan to continuously increase localization of parts and components of vehicles manufactured locally.

This will 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,” Indus Motor said.

The automaker shared the investment is planned to be completed by the third quarter of the calendar year 2025. The automaker in the past has hinted at increasing its product localization.

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.