IMC strikes historic deal with Toyota Egypt
Indus Motor Company (IMC), a prominent player in Pakistan’s automotive industry, has achieved a significant milestone by signing an agreement with Toyota Egypt to export high-quality auto parts. This groundbreaking collaboration marks IMC’s entry into the global supply chain and establishes it as the first-ever auto manufacturer from Pakistan to achieve this feat.
In a press statement, IMC stated, “Marking a historic turning point, Indus Motor Company (IMC) has become the first-ever auto manufacturer to open gates to the global supply chain by signing an agreement with Toyota Egypt to export high-quality products starting July 2023.” This achievement not only elevates IMC’s position in the industry but also paves the way for other local automotive part manufacturers to follow suit, creating new possibilities.
Former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), Abdul Rehman Aizaz expressed his excitement, saying, “Definitely a big achievement... let’s hope it is just the beginning.” This collaboration sets a positive trajectory for Pakistan’s automotive industry, enabling local manufacturers to become part of the global supply chain.
IMC plans to ship its first consignment of semi-processed raw material to Toyota Egypt, marking a significant milestone for OEMs in Pakistan’s export landscape. This partnership aligns with the Auto Industry Development and Export Policy (AIDEP) 2021-2026 and not only strengthens IMC’s export capabilities but also contributes to the overall development of Pakistan’s growing auto industry.
Speaking to The Express Tribune, auto expert, Mashood Ali Khan commended the agreement, highlighting the opportunity it presents for Pakistani parts manufacturers to enter the global supply chain and sell high-quality parts at competitive prices. He emphasised that other original equipment manufacturers (OEMs) should follow this example, as it enables them to leverage Pakistan’s manufacturing efficiency to produce parts of superior quality.
The news comes at a time when Pakistan’s auto sector has been grappling with continuous downturns. Indus Motors (INDU) reported a significant year-on-year sales decline of 58% in fiscal year 2023. However, the company experienced a 7% month-on-month increase in June 2023, signalling a positive shift in momentum.
According to PAMA, Pakistan’s car sales clocked in at 6,000 units, up by 10% MoM but down 79% YoY. Car sales including non-PAMA members clocked in at 7,000 up by 10% MoM, according to a Topline Securities report. This takes car sales for FY23 (as reported by PAMA) to 126,879 units down 55% YoY.
Overall, Pakistan’s car sales have been affected by factors such as the non-availability of Completely Knocked Down (CKD) kits, rising car prices, expensive auto financing, and the low purchasing power of consumers, said Sunny Kumar, auto analyst at Topline Securities.
Despite the challenges, certain manufacturers witnessed growth in sales. Honda Atlas Car (HCAR) recorded a remarkable 253% MoM increase in June 2023, and PSMC saw a 2% MoM growth, led by increased sales of Bolan and Wagon-R models.
Speaking at a ceremony held at IMC’s plant in Port Qasim, Chief Executive Ali Asghar Jamali expressed his pride in seeing the “Make in Pakistan” dream transcend borders. Becoming part of Toyota’s global supply chain affirms IMC’s commitment to position Pakistan on the world map and strengthen the country’s economy, he said. Jamali emphasised that the collaboration with Toyota Egypt is just the beginning and that IMC plans to further enhance its capabilities, positioning Pakistan’s auto industry as a symbol of reliability and quality globally.
Moreover, Jamali noted that this collaboration will strengthen connectivity between Africa and Pakistan, supporting the government’s “Look Africa” policy and boosting trade links.
Published in The Express Tribune, July 12th, 2023.
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