The importance of hybrid electric vehicles (HEVs) in altering Pakistan's automobile scene was recently highlighted at the Auto Industry Media Workshop 2022. The workshop, which was organized by Toyota Indus Motor Company (IMC), also highlighted the localization levels attained by the local auto sector as well as the influence of consecutive auto policies on the industry.
The media were briefed by Toyota IMC CEO Ali Asghar Jamali, industry experts, and many auto part manufacturers on the effectiveness of consecutive auto policies, factors impacting car costs, and the company's ambition of producing HEVs domestically.
According to experts, the only way to boost the automobile sector is to keep the publicly disclosed incentives in place during policy periods. They also suggested that Pakistan adopt a 20-year national industrial program to attract serious investment.
They think that such a strategy will ultimately attract FDI in steel, resin, light engineering, and other industries, therefore strengthening the value chain.
"The car industry is one of Pakistan's fastest-growing sectors. It accounts for around 2% to 3% of Pakistan's GDP. Pakistan is the 35th largest vehicle producer in the world, according to Jamali.
IMC is growing production capacity to meet rising client demand, he noted. He asked suppliers to increase their capacity in order to meet future needs since the firm plans to build over 90,000 vehicles in 2022 at 100% efficiency and overtime. "Right now, we're devoting extra work and time to building automobiles that go beyond our present capabilities," he explained.
He also stated that Toyota IMC supports the government's development efforts and policies. "Toyota has already invested $100 million in Pakistan to build HEVs and wants to deliver electric cars (EVs) in the long run when the country is ready," he added.
In Pakistan, the use of hybrid technology will provide localization with a new dimension. Reducing gasoline use would help conserve foreign exchange and lower petroleum import expenses. HEVs, according to Jamali, is a "middle-ground" answer in the absence of EV infrastructure in Pakistan.
"Pakistan imports $9.7 billion worth of crude oil for refineries to manufacture Petrol and Diesel, and petroleum commodities are the largest category of import," Jamali said, adding that if the nation had 100 percent HEVs, the country's import bill would be slashed in half.
EVs, on the other hand, rely on power, and Pakistan generates 62 percent of its electricity from fossil fuels, with up to 30 percent line losses.
"EVs will increase local LNG, coal, and crude oil imports, as well as investment in distribution and infrastructure development," Jamali stated.
In response to the recent increase in car prices in Pakistan, the CEO stated that the entire globe has been subjected to extraordinary inflationary pressures in recent years, and Pakistan is no different. He noted that the epidemic has disrupted the global supply chain, which has been exacerbated by the Russia-Ukraine war.
"The rupee-dollar disparity, exponential growth in utility costs, expensive freight prices, and government taxes of up to 40% have all contributed to Pakistan's problems".’Make in Pakistan' is the answer to our economic issues. It will achieve macroeconomic objectives such as increased GDP, job creation, increased exports, and lower imports”.
"The automobile industry is the mother of all industries," Jamali continued, "and it can play a crucial role in economic progress provided the government maintains predictable and clear legislation."