Toyota assembler sees vehicle demand hit as floods disrupt Pakistan economy

Indus Motor Company, the assembler of Toyota vehicles in Pakistan, has warned that ongoing floods are disrupting supply chains and infrastructure across the country, while reduced consumer purchasing power in affected regions is likely to dampen vehicle demand in the short term.

The automaker made its assessment during a corporate briefing session, saying that “the full impact of the floods and monsoon season is yet to be seen, though vehicle demand is expected to be affected in the short term”.

Pakistan is currently experiencing severe flooding as part of an extended monsoon season that began in late June 2025 and has intensified through September. The disaster has primarily affected densely populated regions, especially in Punjab.

Days ago, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) decided to keep the policy rate unchanged at 11%, citing the adverse impact of recent floods on the near-term macroeconomic outlook.

Meanwhile, Indus Motor was of the view that the measures announced under the National Tariff Policy 2025-30, thereby resulting in a major reduction in import duties (custom duty, ACD, RD) over 5 years, especially for imported vehicles (new and used vehicles) and auto-parts, will impact the local auto industry and promote trading business..

“We request the government to rationalise the duties and taxation system on CKD vehicles in Pakistan for fostering a fair and sustainable tax system that supports volume growth and increases contribution to the economy by the local auto industry.

“We request the policymakers to relax current financing limits and conditions to enhance the auto-financing of locally manufactured vehicles, to support the industry in these challenging times, and to support the purchasing power of the consumers,” IMC said.

Indus Motor said that the liberalisation of the import of used vehicles, thereby enhancing the age limit from 3 to 5 years and allowing their commercial imports, may lead to an influx of used imported vehicles, resulting in the deindustrialisation of the local auto industry.