Indus Motor Company, the assembler of Toyota-brand vehicles in Pakistan, said on Tuesday that it has become the first company in the four-wheeler segment to start exports after it signed an agreement with Toyota Egypt.
“We have already sent our first shipment this month,” Chief Executive Ali Asghar Jamali told Business Recorder.
A press release issued by the company also stated that the first consignment of semi-processed raw material to be shipped to Toyota Egypt will mark the “beginning of era from the export point of view by any original equipment manufacturer (OEM) in Pakistan and plans are in place to continue in this direction”.
Jamali said that while significant, it is “too early” to deem it a turning point for the struggling industry.
His remarks come as Pakistan’s auto sector, highly dependent on imports to meet its assembling needs, remains under pressure due to constraints on issuance of Letters of Credit (LCs). The hindrance comes on the back of Pakistan’s low foreign exchange reserves that triggered import restrictions.
While the State Bank of Pakistan (SBP) has lifted restrictions, it will take some time before normalcy returns.
At the same time, a fast-depreciating rupee pushed up prices of automobiles while runaway inflation also took Pakistan’s key interest rate to a record high, discouraging buyers from financing. In response, almost all auto sector’s players have been announcing plant shutdowns with regular monotony.
“This is a baby step at the moment,” said Jamali. “Currently, we have raw material constraints in the country. It would stop us from exporting huge quantities. But I am hopeful.”
The CEO said the company will only be exporting a certain part to Egypt.
“If their confidence is built, we may be asked to export more parts.
“Even if we manage to export one part to many markets, it would increase our export numbers.
“We hope that other manufacturers would also get confidence and find avenues to export as well,” he added.
A statement from the company, meanwhile, said the partnership with Toyota Egypt “is the first step to meet requirements set under the Auto Industry Development and Export Policy (AIDEP) 2021-2026”.