Will Pakistan consumers see a smaller car by Toyota?

Published: May 30, 2016
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Pakistan is seeing a massive growth in car sales, which amounted to 184,099 units in the 10 months of the ongoing fiscal year with Indus Motor’s share being 52,987. PHOTO: IMC

Pakistan is seeing a massive growth in car sales, which amounted to 184,099 units in the 10 months of the ongoing fiscal year with Indus Motor’s share being 52,987. PHOTO: IMC

KARACHI: Indus Motor Company (IMC) CEO Parvez Ghias said Toyota Japan’s move to buy out its subsidiary Daihatsu augurs well for Pakistan, a hint that the country could see the introduction of a smaller car, but stopped short of giving a timeframe and divulging details.

Toyota Motors – the Japanese carmaker – had announced earlier this year that Daihatsu will now become its fully-owned subsidiary by way of a share-exchange which is expected to be completed by August 2016.   The purpose of the deal is to give Toyota an upper hand in the small car segment – in which Daihatsu specialises – that would enable it to focus on emerging economies where the sale of vehicles is expected to speed up in the wake of falling oil prices, reduced inflation and lower cost of car financing.

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Analysts at the time said the deal – worth about $3 billion – was part of Toyota’s strategy to strengthen its push into the compact cars’ segment for emerging markets.

In an exclusive interview with The Express Tribune, Ghias said there is a huge requirement in the economy segment of passenger vehicles when asked if IMC – the company that manufactures and markets Toyota brand vehicles in Pakistan – would introduce a smaller car.

“If a million motorcycles are sold [in a year], it shows that there is a need for a smaller car since that is the natural progression for these buyers,” said Ghias. “Unfortunately, Toyota does not have a car in the economy segment. Daihatsu had it [Cuore] before it took a strategic decision, which was not specific to Pakistan, to end production since it felt the product had ended its life cycle.

“It decided to concentrate on its domestic market, but since then it has increased its focus in Indonesia and Malaysia. Going forward, I hope there is a change of heart on Pakistan.

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“There’s nothing concrete enough for me to say that Daihatsu is coming to Pakistan. However, Toyota Japan has increased its holding in Daihatsu and that means greater control over it. As a result, to what extent will there be a greater opportunity? Time will tell.

“But it augurs well for the country. We are in dialogue with the principal company that we need another model. There’s a time for everything and when it happens we will announce it. At this point, nothing can be said.

“What I can say that we are in constant talks with Toyota Japan and a consideration is always there. But timing is the key in such a decision.”

Ghias added that an effort was made to introduce a vehicle in the smaller car segment when Cuore was discontinued, but nothing looked feasible at the time.

“At the end of the day, you have to be able to make money out of it. If you can’t, there’s no point.”

The CEO, who has been at the helm since 2005, also advocated greater choice for a customer. “If the government thinks a European manufacturer is the way to go, that’s great.

“There is definitely space for more players. Some players [in the auto industry] are currently not up to their full capacity, but the recent growth has been impressive. The import of used cars shows there is room in the market.”

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Addressing criticism that consumers often face delays in vehicle delivery, Ghias said the process has been simplified by a ‘car availability’ feature, stressing that the time period is restricted to two to three months.

Meanwhile, commenting on the auto policy, in which the government is looking to encourage the entry of new players, Ghias said the policy could have been introduced four years ago, which by now would have reaped benefits for consumers.

But while he stressed that the policy was delayed, Ghias said it would hopefully have a positive impact on the Pakistani market.

“Growth lies in this region. Europe is going through an economic slowdown and Japan has introduced negative interest rates.

“Hence, the future lies in  India, Pakistan, Vietnam etc. There is a need to have the right policy framework in place and I hope the government realises this since the outside world does.”

The writer is the business editor

Published in The Express Tribune, May 30th, 2016.

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Reader Comments (18)

  • Ussama Yaqub
    May 30, 2016 - 9:10AM

    “There is a need to have the right policy framework in place”

    In other words, continue to give us, the auto assemblers, a free hand to squeeze the customers for money while never questioning us when it comes to the quality or safety of the cars produced!

    But this policy framework is already in place! What more can they ask for? Recommend

  • Sukrut
    May 30, 2016 - 11:44AM

    Why TATA, M & M and Maruti are not looking at Pakistan? it could be a good market for these indian companies and they have proven record in subcontinent as far as reliability is concerned. Toyota cars are great no doubt but these Indian companies manufacture better cars than what Toyota offers in Pakistan.
    The two wheeler manufacturers like TVS, Hero and Bajaj can also sell their bikes in Pakistan.. Recommend

  • Furkan Awan
    May 30, 2016 - 1:22PM

    Whatever Small car you make but please atleast put airbags and ABS in it ! seriously we are sick and tired of using Cultus and Mehran without a safety ! Recommend

  • adeel
    May 30, 2016 - 1:46PM

    @Sukrut:
    nah Bro we don’t want Indian junk as we don’t want are standard’s to further go down….. what we need to be doing is give equal opportunity to well established brands like Audi, Volkswagen, Fords…..(which i think government trying to do with auto policy 2016) to break the monopoly of Japanese manufacturers to create a tough competitive environment as it will force the manufacturers to reduce the prices and improve the quality Recommend

  • Kushal
    May 30, 2016 - 2:04PM

    @adeel: “Audi, Volkswagen, Fords”……
    Try manufacturing bullock carts first on your own then talk about those brands.Recommend

  • May 30, 2016 - 2:19PM

    its very good newsRecommend

  • May 30, 2016 - 2:21PM

    its very good news for usRecommend

  • May 30, 2016 - 2:22PM

    good newsRecommend

  • pakidtani bloach
    May 30, 2016 - 2:40PM

    @sukrut. So you dont want to play cricket because pakistan will earn good money from it but you want us to buy your tata cars and all other rubbish you just mention. go hide in your nano as we aint interested.ciaoRecommend

  • Libra
    May 30, 2016 - 3:11PM

    @pakidtani bloach:

    Very correct and befitting.Recommend

  • Atif
    May 30, 2016 - 5:18PM

    @khusahl

    while I dont appreciate the adeels rudness. But let it be clear that Pakistanis have driven almost every major brand of cars right here in Pakistan when Indians used to drive ambassador.Recommend

  • Kushal
    May 31, 2016 - 12:01AM

    @Atif:
    Most politely I would like to point out that the big expensive cars that you drove in the past were all made by foreigners and you just bought them, while the ambassador is like our good old grandfather, made by us and used by us. No matter how humble it was we are proud of this past. Salams.Recommend

  • nasser
    May 31, 2016 - 12:25AM

    I have to quote RATAN TATA..a couple of years back….. There is no auto manufacturing industry in India, its only auto assembly industry. Its the same story in Pakistan with one difference …the size and range.Recommend

  • Habibullah
    May 31, 2016 - 8:37AM

    I want Islamic car with privecy for all my wifes.Recommend

  • Burnt by Toyota
    May 31, 2016 - 1:07PM

    Why Toyota not bringing “Toyota Vitz” which is most popular car in Pakistan why “Daihatsu Shit” is shoved down our throats again ?????

    I wonder when Toyota Indus will be held accountable for countless deaths and accidents in Pakistan for defective brakes they offered in corollas in previous models….Recommend

  • coolboy
    May 31, 2016 - 1:34PM

    @Sukrut:
    of course we know why india placed 200 percent tax on all imported cars.Recommend

  • coolboy
    May 31, 2016 - 1:36PM

    @nasser:
    there are making cars in india by levying heaving duties on all kind of imports whether CBU or KDU or SKDU.Recommend

  • Sukrut
    May 31, 2016 - 3:08PM

    @All who tried to bash me for quality of Indian automotive industry and their quality, go and do some research,
    Indian manufacturers are exporting vehicles to many markets in the west too! but after reading your comments its clear you dont deserve good products so stay with the old Toyota Models.. As far as Volkwagons,Audis and Fords are concerned, I really doubt they would be interested to manufacture vehicles in Pakistan on large scale due to large investment and also pakistan lacks class which can buy these brands (even India has only assembly plants for BMW and Audi).. Recommend

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