IMC signs deal with Toyota Egypt to export auto parts

KARACHI: Indus Motor Company (IMC), Pakistan's largest automaker, said on Tuesday it had signed an agreement with Toyota Egypt to export auto products starting July.

“The IMC has become the first-ever auto manufacturer to open gates to the global supply chain by signing an agreement with Toyota Egypt to export high-quality products starting July 2023,” the company said in a statement.

The development comes as the auto industry struggles with inventory shortages amid import constraints on the back of low foreign exchange reserves of the country.

“The first consignment of semi-processed raw material to be shipped to Toyota Egypt will mark the beginning of era from the export point of view by any OEM [original equipment manufacturer] in Pakistan and plans are in place to continue in this direction.” IMC, Toyota vehicles maker in Pakistan, said.

The partnership with Toyota Egypt is the first step to meet requirements set under the Auto Industry Development and Export Policy (AIDEP) 2021-2026, according to the company. “This is a significant milestone that will not only augment IMC's export capabilities and serve as a testament to IMC’s quality standards but also contribute immensely towards the development of Pakistan's growing auto industry.” “To see the ‘Make in Pakistan’ dream cross international borders is a big moment, not just for us but the country too. Becoming part of Toyota’s global supply chain is an affirmation of IMC’s commitment to see Pakistan on the world map and strengthening its overall economy,” Ali Asghar Jamali, CEO of IMC, said.

The collaboration is an achievement for IMC and a significant step towards establishing its global footprint. It is also the first time for any local automotive part to be part of the Toyota Global Supply Chain. “What’s more, this step will bolster connectivity between Africa and Pakistan and boost trade links under the government’s “Look Africa” policy,” he added.

Jamali shared that the company was looking forward to further enhancing its capabilities with the collaboration. “We plan to go further and beyond this to place Pakistan’s auto industry as a symbol of reliability and quality on the globe.”

Pakistan’s low forex reserves, devalued rupee, and record high inflation have collectively hit auto sales in the country. Import restrictions pushed almost all auto makers to halt production multiple times. On June 23, 2023, IMC announced its fifth plant shutdown of the year on “insufficient inventory level”.

According to the central bank, it has removed import restrictions in the country - a move seems to please the International Monetary Fund approve a $3 billion short-term arrangement. Having no restrictions on imports, IMC in future plans to boost its exports of auto products.