Indus Motor Company Limited (INDU) has also revealed a new investment of Rs 1. To add more localized content in its production chain, it needs about $3. 94 million or 1 billion. This has emerged in a notice to the Pakistan Stock Exchange (PSX) on Monday informs media.
This investment extends from an earlier capital investment made on 22/02/2024 wherein Rs 3 billion was committed for enhancing the localization of parts and components of different vehicles. The completion of this earlier investment is however anticipated to be accomplished by the third quarter of the financial year 2025. Thus the total investment of this localization project now comes up to Rs 4 as per the new approval. 1 billion.
The additional Rs1. 1 billion, by the first quarter of the year 2026 is planned to be invested. That is why Indus Motor has undertaken this investment plan of increasing the local content of automobile parts and assemblies, the ultimate objectives being to save foreign exchange, develop the local automobile industry, provide employment opportunities, and increase national wealth.
The funds will be utilized for the purchase of plant and machinery, molds, dies, equipment, etc, essential for the localization of a part for an existing vehicle.
Last year, the company launched the Hybrid Electric Vehicle (HEV) Corolla Cross which is said to be 50% locally produced in terms of value. As for other assembled hybrid vehicles in the market, Indus Motor CEO Ali Asghar Jamali stressed the fact that if one excludes government taxes, more than 50 percent of the Corolla Cross is manufactured with locally-sourced materials.
The industry has not done well in Pakistan recently due to slow growth in the economy, increasing inflation rate, and high cost of borrowing which impacted the sales of vehicles in Pakistan. As mentioned earlier, this sector is highly import-oriented, and therefore there is a trend towards localisation to minimize on the effects of currency variation and dependence.