KARACHI: Indus Motor Company (IMC) has reaffirmed its $100 million plan to roll out a locally assembled hybrid electric vehicle (HEV) despite an unfavourable economic situation, announced Chief Executive Ali Asghar Jamali on Wednesday.

Addressing a presser at a local hotel, he said Toyota Cross will be unveiled early next year.

He said hybrid technology will also result in the reduction of imports as 30,000 HEVs will save around $37 million per annum. It would help achieve macroeconomic goals, employment generation, export boost and import reduction as well.

HEVs would reduce carbon dioxide emissions in fossil fuel-reliant countries like Pakistan and India, which have 62pc and 75pc share of fossil fuel in their energy mix, respectively.

“We have also not retrenched any staff out of 4,000-employee workforce despite an extremely challenging business environment like weak demand, 58pc drop in sales from January-June, high-interest rates, deteriorating macros and rapid price escalation,” he claimed.

The IMC is making cost reductions like running the plant on a single shift due to dwindling demand, managing overhead expenses and other cost-cutting measures like saving energy costs, transportation, travelling, utilities etc.

He also hinted at hiking vehicle prices by 10 per cent due to a massive rupee depreciation against the US dollar.

He said the company has planned to increase localisation in phases parts-by-parts in the next five years. Phase one would be kicked off with a plan to localise 200 parts.

Anticipating subdued demand for vehicles till December, he said a silver lining exists in Toyota Yaris which may bode well in case buyers shift from Toyota Corolla and Honda Civic while much would also depend on the size of local crops. “There is no chance that the buyers of 600cc-1,000cc cars will lift Yaris,” he added.

Mr Jamali complained lack of a level playing field in the auto sector as total used car imports have crossed the local production of some assemblers, thus impacting the sales. More than 6,000 used cars were imported in FY23 with more than 1,800 units only in May and June this year, he claimed.

“If the government doesn’t improve the situation, then assemblers will be left with no option but to start commercial imports and reduce workforce to just 100-200 enough to handle distribution and sales, he warned.

Amid meagre foreign exchange reserves, the government should refrain from permitting the policy of importing used cars and instead support the local assemblers which provide direct and indirect jobs to thousands of people, Jamali advised.

The growth of the local auto industry can never be achieved if the import of used cars is freely allowed, he added.

Published in Dawn, August 31st, 2023