Toyota IMC Blames SBP for Car Industry’s Massive Downfall

The ongoing economic and operational hurdles in Pakistan have forced Toyota Indus Motor Company (IMC) to operate at a 40-50% production capacity.

During its latest Corporate Briefing Session (CBS), Toyota IMC highlighted that the reduced production capacity is mostly due to the State Bank of Pakistan’s (SBP) restrictions on imports. The company also stated that the restrictions are expected to last for an extended period.

IMC added that it has bookings filled up to the next 3 months, as per the current pace of production. It added that almost 400-500 of its customers canceled their bookings and received the amount with markup.

The company said that it can bring the lead time down to 4-5 weeks following the ease of restrictions. It added that car financing has dropped from 35% to just 10% in recent months due to car loan restrictions from SBP.

IMC said that the localization of both, the Toyota Corolla and Yaris has reached 65% percent following a 39% reduction in duties and taxes. Furthermore, the company’s plan to invest $100 million in the local hybrid electric vehicle (HEV) development is also on schedule, with the launch of the company’s first locally assembled hybrid car expected late in 2023.

Toyota has warned that the local automotive industry’s troubles such as rising inflation, supply chain hiccups, production cuts, and import restrictions may also spark an exodus of some new carmakers from Pakistan. The company mainly holds SBP’s restrictions on automotive imports as the main culprit for most issues.

Via: Topline Securities