- Amount will be invested over a period of three years, says the company in its filing to the Pakistan Stock Exchange
Seeking benefits from the incentives provided to the auto sector, Indus Motor Company (IMC), the maker of Toyota vehicles in Pakistan, has announced that it would invest $100 million in the local production of hybrid electric vehicles.
The $100mn amount will be invested over the period of three years, said the company in its filing to the Pakistan Stock Exchange (PSX) on Wednesday. The announcement comes after Toyota Motor Corp, IMC's parent company, said that it expected to spend more than $13.5 billion by 2030 to develop batteries and its battery supply system as the move to hybrid electric vehicles gathers steam.
“We are pleased to announce that, based on the incentives provided against certain taxes and duties as announced by the Government of Pakistan through Finance Act, 2021 and subsequent SROs, the company has evaluated and plans to invest an estimated aggregate amount of $100 million, over the period of next 3 years for the local production of hybrid electric vehicles in Pakistan,” said Indus Motor.
IMC said that the announced investment shall be made towards plant upgradation and extension, localisation of parts or components, and production preparation or assembling of the first hybrid electric vehicle, by the company at its plant in Port Qasim Authority, Karachi.
The company's share price increased over 2.3% on Wednesday even as the KSE-100 Index -- the benchmark for market performance -- fell, reacting to the MSCI decision.
The auto assembler posted net sales revenue of Rs179.2 billion in the year ended June 2021, a 108% increase compared to Rs86.2 billion in the previous year. Meanwhile, profit after tax increased by 151% to Rs12.8 billion from Rs5.1 billion.
During the year, the sales volume of CKD and CBU vehicles increased by 100% to 57,731 units as against 28,837 units sold last year. Consequential to increased demand, the company produced 59,187 units for the year, compared to 28,519 units produced in the same period last year.
Just days ago, Chief Executive IMC Ali Asghar Jamali stated that his company supported the government’s ‘Make in Pakistan’ initiative, especially measures to reduce Federal Excise Duty and Additional Customs Duty.
“Additionally, the government’s consistent effort to promote the local automotive industry in the Hybrid sub-sector is noteworthy. Its intent to locally develop HEVs, Plug-in Hybrids (PHEVs) and Battery Electric Vehicles (BEVs) to mitigate climate change and reduce dependency on oil imports is appreciated,” said Jamali.
Meeting with PM
Meanwhile, in a statement issued after the PSX notice, the company said that a delegation from Indus Motor Company, led by Vice Chairman Shinji Yanagi and Jamali, met with Prime Minister Imran Khan.
Yoichi Miyazaki, CEO for Toyota Asia, also took part via video link.
“We are excited to announce this new investment," said Yoichi. "Today’s investment announcement is testament to our strong commitment to Pakistan. We appreciate the policies to encourage low carbon mobility solutions."
Khan, quoted in the statement, said Indus Motor Company is a wonderful example of how global companies can grow successfully here in Pakistan.
Jamali added that the company is looking forward to bringing the fourth generation Hybrid Electric Vehicle.