Middle East crisis may disrupt Pakistan’s auto parts supply, says Indus Motor

Indus Motor Company, the assembler of Toyota vehicles in Pakistan, has warned that the ongoing geopolitical crisis in the Middle East could disrupt the supply of imported auto parts, potentially affecting production timelines in the country’s automobile sector.  

Topline Securities, which attended the management meeting of HUBCO, shared the development in its report on Wednesday.

The automaker’s management said regional tensions are likely to create supply chain challenges in the coming weeks.

“Management expects disruptions and delays in imported parts due to the ongoing Middle East crisis,” Topline said in its report.

“Logistical congestion, higher freight costs, and shipping delays are likely to put pressure on supply timelines. However, a broader ripple effect may become visible over the next month, making effective crisis management critical, although some disruptions may remain unavoidable,” added the report.

Pakistan’s auto sector remains heavily reliant on imported, completely knocked down (CKD) kits and components, making it vulnerable to disruptions in key global shipping routes.

The Revolutionary Guards claim that Iranian forces had complete control of the Strait of Hormuz, a vital route for world oil and gas supplies, and any vessels seeking to pass risked damage from missiles or stray drones.

CCP seeks rationalisation of protections to boost competition in Pakistan’s auto sector

Meanwhile, the Indus Motor management shared that new models and product changes are in the pipeline. “However, due to ongoing uncertainty, there is no timeline set as of yet,” read the Topline report.

Indus Motor expects the Pakistani government to rationalise the tax structure for other vehicle categories.

“Notably, some vehicles are currently subject to a 25% sales tax. The management believes that this rate could be reduced to around 18% to mitigate potential negative impacts and maintain neutrality across the sector,” said Topline.

The company expects gradual growth in vehicle demand in Pakistan on the back of economic stability, steady financing rates, and controlled inflation, though recent geopolitical tensions in the Gulf region will pose uncertainty.

HUBCO’s Gharo plant set to come online in second half of 2026, eyes 25,000 vehicles annually

Moreover, the automaker’s management supports a clear and market-based Auto Policy 2026-31 in line with the International Monetary Fund (IMF) programme.

“It also urges the government to relax auto financing limits, adjust taxes and duties, especially on CKD units, and set proper rules for used car imports to ensure fair competition and consumer safety,” added the brokerage house report.