Toyota CEO Admits Heavy Imports Reliance
By Newztodays Team
Toyota has failed to achieve 100 percent localization of car parts in Pakistan despite its commitment to all auto policies.
The governments have been offering incentives to local car assemblers in auto policies during different times. The auto assemblers have also been committing 100 percent localization of auto parts.
Chief Executive Officer (CEO) Indus Motors (Toyota Pakistan), Ali Asghar Jamali, in a recent podcast with Mansoor Ali Khan, confirmed that around 60–65% localization has been achieved for models like the Yaris, although larger models like the Fortuner still rely heavily on imports due to low volumes.Pakistan Car Sales Soar 46% in 9MFY25
The higher prices of Toyota are due to higher imports, which the company has been relying on, experts said, adding that the failure of the company to achieve 100 percent localization of parts was a key reason that led to higher prices compared to India.
Pakistan’s automobile industry is showing clear signs of recovery. It has been facing a challenging period marked by low sales, interest rate hikes, and economic uncertainty.
Improved consumer confidence and reduced interest rates are helping the sector bounce back. Toyota is also optimistic about long-term growth.
Toyota is exploring increased localization in Pakistan. It also working on the localization of engine assembly and hybrid vehicle manufacturing.
The company has currently achieved around 60–65% localization for the Yaris. But it is less for larger models like the Fortuner due to low production volumes.
Toyota exported around 50–60 cars and has also sent 250–300 skilled Pakistani workers to Japan, who contributed to the auto industry in building Pakistan’s image.
He also pointed out that the Pakistani auto market had sharply witnessed a decline over the past two years, but it is now stabilizing.
Companies like Toyota, Suzuki, Honda, Hyundai, Changan, Haval, and MG are now competing in a more vibrant market.
He further said that Toyota’s sales were still recovering due to positive economic indicators and scaled back from double to single shifts at its production plant.
He also referred to the high tax burden. Government taxes were up to 58% of the cost of popular models like the Toyota Fortuner. The higher taxes had made vehicles unaffordable for many customers.
He said that they had also hit the sales volume due to higher taxes.
Stable exchange rates and reduced interest rates have led to pricing and created a more favorable environment for both manufacturers and consumers.
He said that Toyota is now mulling over the introduction of a hatchback model to challenge the Suzuki Alto to capture the small car segment with sales of 4,000–5,000 units per month.
He also said that the lack of a solid raw material supply chain in Pakistan was another obstacle. The country does not produce key materials like steel, aluminum, and copper, making it dependent on imports,” he said.
Moreover, he said that Pakistan’s export growth is curtailed due to less favorable Free Trade Agreements (FTAs) compared to countries like South Africa.
He said that import of used cars undercuts local manufacturers and risks the employment of 2.5 to 3 million people. He suggested to promote local manufacturing and protect jobs and stimulates economic activity.
He further pointed out that government policy inconsistencies are another barrier and added that the import of used cars goes against global norms.
