Indus Motor counting on its hybrid Corolla Cross as petrol prices hit record high

KARACHI: Indus Motor Company, the maker of Toyota-brand vehicles in Pakistan, is betting on its upcoming hybrid car, the Corolla Cross, to do well at a time when petrol prices have already hit a record high and are tipped to go higher in the country.

“Hybrid vehicles will do well as it consumes 50% lower fuel,” said Indus Motor Company CEO Ali Asghar Jamali in a press briefing with journalists on Wednesday.

“HEVs are the most sustainable solution to the country’s economic problems.

“Pakistan is one the worst victims of climate change and needs strategic measures on every front to address these challenges.”

Jamali said HEVs are the most logical option to reduce carbon dioxide emission in fossil fuel reliant countries like Pakistan and India, which have 62% and 75% share of fossil fuel in their energy mix, respectively.

According to Global Carbon Budget 2022, annual CO2 emissions in Pakistan stood at 229.51 million tons in 2021, which was 9% higher than 210.38 million tons in 2020.

“Toyota has made an investment of $100 million to produce HEV vehicles in Pakistan and Toyota Corolla Cross, Pakistan’s first locally manufactured HEV SUV, is to be launched soon,” he highlighted.

It is expected the company would launch the Toyota Corolla Cross by the end of 2023 or early 2024.

Jamali said the adoption of hybrid technology will also result in the reduction of import bill, as 30 thousand units of HEVs will save around $37 million per annum.

Meanwhile, Jamali said despite registering a 55% reduction in production, the company has not laid off employees.

“The automobile sector of the country faces major challenges including weak demand, rapid price escalation, expensive auto financing, higher taxes, and deteriorating macros,” said Jamali.

He added that despite uncertainty regarding supply-side recovery, they have not opted for any layoffs.

He shared that the company faced a 58% decline in its volumetric sales from January to June 2023 alone.

First month of FY24: Car sales down 57% YoY as rising prices suppress demand

Jamali said that the local auto industry has been facing the issue of letters of credit for quite some time, making it difficult for the industry to meet its production targets, which in turn is badly affecting sales.

Besides, he added, the import of used cars is gaining momentum, severely impacting the already affected local auto industry, as total used car imports are more than the production of some OEMs (Original Equipment Manufacturers).

He added that more than 6,000 used cars were imported in the financial year 2022-23, with more than 1,800 units being imported only in May and June this year.

“In the presence of minimum foreign exchange reserves held by the State Bank of Pakistan, the government should refrain from permitting the policy of importing used cars and instead support the local auto industry, which is producing cars locally,” said Jamali.

He added that the industrial growth of the auto industry is essentially linked with a properly designed planned import policy and the growth of the local auto industry can never be achieved if import of used cars is freely allowed by the government.

“This issue of used car imports is also nullifying the plausible localisation achieved by the local auto industry, in terms of parts and also future localization plans,” he said.