Karachi, August 31, 2023 – Ali Asghar Jamali, CEO of the Indus Motor Company (IMC), the manufacturers of Toyota vehicles in Pakistan, has affirmed the company’s commitment to its workforce, stating that there are no plans for job cuts despite facing substantial production challenges.
IMC has been grappling with a 55 percent reduction in production, primarily due to weak demand and supply-side constraints. These difficulties have arisen amidst a backdrop of rapid price increases, expensive auto financing, higher taxes, and deteriorating macroeconomic conditions in the country’s automobile sector.
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Jamali, speaking to a group of journalists, underscored the company’s dedication to its employees and the nation. He noted that despite uncertainties surrounding the recovery of supply-side issues, IMC has refrained from implementing layoffs.
In the first half of 2023, IMC reported a significant decline of 58 percent in its volumetric sales. Instead of workforce reductions, the company has been exploring alternative cost-cutting measures, including budget reductions across various activities and efforts to reduce energy costs.
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The local auto industry has been grappling with challenges related to letters of credit (LCs), which have hindered the industry’s ability to meet production targets, subsequently impacting sales. Furthermore, the import of used cars has been on the rise, posing a significant threat to the local auto industry. Jamali emphasized that the government should consider supporting the domestic auto industry, which manufactures cars locally, rather than permitting the liberal importation of used vehicles.
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He stressed that strategic measures are necessary to address the challenges posed by climate change. Jamali advocated for the adoption of hybrid electric vehicles (HEVs) as a sustainable solution for Pakistan, citing their potential to stimulate economic growth, generate employment, boost exports, and reduce imports. Toyota has invested $100 million in Pakistan to produce HEVs, with the Toyota Cross, Pakistan’s first locally manufactured HEV SUV, set to launch soon.
Regarding new entrants in the market, Jamali noted that companies with strong investors are likely to thrive, while those heavily reliant on bank financing may face difficulties due to high interest rates. He emphasized that while electric vehicles (EVs) can reduce carbon emissions, their high prices and a lack of infrastructure currently pose challenges. IMC intends to move toward EVs when suitable infrastructure and policies are in place.
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Jamali’s remarks reflect the challenges and opportunities facing Pakistan’s automotive industry as it navigates a rapidly evolving economic landscape and strives to balance environmental sustainability with economic growth.
