LAHORE: Indus Motor Company Ltd (IMC), which manufactures and markets Toyota brand vehicles in Pakistan, has announced plans to invest up to $40 million (Rs4.19 billion) to boost its annual production capacity.
The investment will help raise its production capacity from 54,800 units to 60,000 by the end of 2018, and create up to 400 direct and 4,000 indirect jobs, the company said.
“At present we are rolling out 65,000 units a year by working on holidays. Once our production capacity increases in 2018, we will be in a position to make 75,000 units a year by working on holidays,” Ali Asghar Jamali, the company’s CEO, told Dawn on Monday from Karachi over the telephone.
The company plans to eventually take its plant capacity to 80,000 units and produce 100,000 units with overtime, but Mr Jamali didn’t specify a time frame. “Let’s restrict ourselves to the company’s first stage of expansion,” he said.
The IMC — which manufactures cars, sport utility vehicles and commercial vehicles — is Pakistan’s largest car maker by revenue, which stood at Rs131bn last year. In terms of sales, however, it is the second-largest after Suzuki with a market share of 28 per cent.
Pakistan’s car market is growing rapidly for the last couple of years and sales are expected to rise from the existing 225,000 units to half a million units by 2025. The industry hopes it will cross the half-million mark even earlier, by 2020 or 2022.
Two other major car makers, Honda and Suzuki, are also planning fresh investments in capacity expansion and introducing new models to maintain their market share. South Korean brands Kia and Hyundai and French car maker Renault have also announced their plans to set up assembly plants to capitalise on the growing car market, and tax and other incentives given by the government to new entrants.
Although Suzuki has said that it could drop its $460m investment plan if the government did not extend the same incentives it has given to the new entrants in the Pakistani market, many insist that the company will have to expand plant capacity to maintain its top position.
“Suzuki has more than half of the market share. It will have to make fresh investment going forward if it wants to ward off competition and maintain its leadership position in the market,” a Karachi-based auto-parts supplier said.