The surge in used car imports, surpassing the production numbers of some original equipment manufacturers (OEMs) in Pakistan, has raised concerns within the local auto industry, particularly during a period of import control measures.
Ali Asghar Jamali, the Chief Executive Officer of Indus Motor Company (IMC), expressed bewilderment at this situation. He highlighted that the continuous influx of imported used cars, exceeding 6,000 units in the financial year 2022-23, with more than 1,200 imported in May and June, is severely impacting the local auto industry. Jamali emphasized that this trend is undermining the localization goals achieved by Pakistan’s auto industry.
In light of the country’s minimal foreign exchange reserves, Jamali urged the government to refrain from allowing further imports of used cars and instead support policies that bolster the domestic auto industry, which manufactures vehicles locally. He stressed that sustainable growth in the auto industry requires a well-structured import policy and cannot be realized in the presence of rampant imports.
Despite the uncertainties surrounding supply-side recovery, IMC has not resorted to layoffs, demonstrating its commitment to the country and the welfare of its employees.
Jamali also highlighted the challenges faced by the industry due to restrictions on opening Letters of Credit, which have resulted in a significant 58% decline in IMC’s sales volume from January to June 2023.
Discussing hybrid electric vehicles (HEVs), the CEO underscored Pakistan’s vulnerability to climate change, citing statistics that show a 9% increase in annual CO2 emissions in 2021 compared to the previous year.
He emphasized that HEVs represent a sustainable solution to economic challenges, with the potential to achieve macroeconomic goals, create jobs, boost exports, and reduce imports.
Toyota’s $100 million investment in the production of HEVs in Pakistan is a significant step, and the launch of the Corolla Cross, Pakistan’s first locally manufactured HEV SUV, is imminent.?