Plans to invest $100 million in next three years
Indus Motor Company, also known as Toyota as it manufactures and also sells imported Toyota cars in Pakistan, has revealed its plans to extend its product line adding hybrid cars to its list for the first time in Pakistan.
Pakistan’s car users already have experienced Toyota hybrids such as sedan Prius and hatchback Aqua, which are regular sights on Karachi roads. They come in used condition mainly from Japan.
The company has shared its plans with the Pakistan Stock Exchange (PSX) that it will be investing $100 million over the next three years for the local production of Hybrid Electric Vehicle (HEV) in Pakistan.
The company said that its decision was based on the incentives provided against certain taxes and duties by the Government of Pakistan through Finance Act, 2021 and subsequent Statutory Regulatory Orders (SROs).
“The announced investment shall be made towards plant upgradation and extension, localization 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,” Toyota announced.
Will hybrid cars make inroads in Pakistan’s auto sector?
“People like Toyota hybrid cars in Pakistan,” said Shakaib Khan, an auto sector expert. “But the success of locally-made hybrid cars will depend on … their price and features.”
Khan said that many people care little if a car is new or old. The main things they consider is the price and features.
“I agree that a locally-made new car have many pros too such as warranty and comparatively cheaper spare parts. But if a person can buy significantly cheaper and almost same car with more features then why would he or she would be (willing to) pay more?” he emphasized.
It is commonly observed that locally-manufactured cars lack features when compared with their similar models manufactured abroad. For instance, a Suzuki Alto or Toyota Yaris or a Honda City manufactured in Pakistan have fewer features than the same models made abroad.
Samaa Money talked with users of hybrid cars who said that their expense on fuel was 30 percent lower. This means that they would have to pay 30 percent less if they drove a hybrid car than what they usually spend while driving a similar normal car.
Why government favoring EVs and Hybrids?
Like other countries around the world, Pakistan takes effects of climate change seriously as the country is among top five risk-prone countries directly hit by effects of climate change and resulting economic and social losses
In an effort to play its part, Pakistan has formulated an Electric Vehicle Policy to facilitate the conversion of the transport sector from fuel-based motorcycles, cars, buses and trucks to electric vehicles. The policy offers incentives on duties and taxes to help businesses start industrial assembly. Pakistan hopes to electrify 30 percent of the total vehicles in the country by 2030.
According to the Ministry of Climate Change, 42 percent of domestic air pollution comes from traffic. Electrifying 30 percent of vehicles could save Pakistan nearly $2 billion in oil imports every year.
However, EV Technologies Consultant CEO and the person representing SZS Group in a joint venture with POF Wah for assembling electric buses, Shaukat Qureshi said that Pakistan is perhaps the first country that has given electric car status to hybrid cars.
“Worldwide, hybrid technology is a failed technology,” said Qureshi. SZS Group is also planning to start electric car importing and manufacturing in Karachi. “Because it still uses fuel. Will the country be able to reduce oil import bill?”
He lamented that a major company was starting hybrid production, terming it a great setback for the nascent electric car market of Pakistan.
Toyota stock price, however, increased by 4 percent from Rs1,264 to Rs1,318 on the day of the notification.