The current export agreement between Toyota Indus Motor Company (IMC) and Toyota Egypt has sparked interest among car analysts and enthusiasts alike.
While some have lauded it as a huge development for Pakistan’s automobile industry, others have highlighted legitimate concerns in light of recent findings.
The provenance of the exported part is one particular concern that has come to light. Toyota IMC was found to have shipped “car carpets” designed for the Toyota Fortuner that were not manufactured by Toyota Indus in Pakistan.
What Is Toyota Hiding From You?
It’s crucial to note that these carpets aren’t made by Toyota; rather, they’re made by a local part maker and vendor called PROCON Engineering (Pvt.) Ltd., which is a sister company to Master Changan Motors Limited (MCML).
PROCON is well-known for producing basic interior parts for local automakers such as Toyota, Honda, Suzuki, Nissan, Kia, Hyundai, Changan, Yamaha, and others.
Their product portfolio includes everything from car and motorcycle seats to automotive textiles and electrical harnesses, as well as sheet metal parts, chassis frames, and even tooling, dies, and jigs.
It’s also worth noting that PROCON uses imported plastic resins in many of its products, including headliners and floor carpets.
This raises the question of Toyota’s true position in this transaction. According to Ali Khizar, an influential business analyst, Indus Motors has dispatched its first export consignment of semi-processed raw material (car carpet) for the Fortuner to Toyota Egypt.
While some attacked Toyota IMC for producing items of “questionable quality,” others criticized Toyota for not providing significant value to the economy or the automobile industry by exporting a third-party supplied part.
Should Toyota Accept Responsibility?
Toyota may claim credit for this contract because their agreement with PROCON says that any items made for a Toyota car are Toyota’s property and can be marketed or exported under their brand.
Is this, however, truly a watershed moment, as some individuals and the industry claim? Unfortunately, it does not appear to be the case.
Toyota, to its credit, has dubbed it a “baby step.” However, it raises concerns about the company’s success in Pakistan during the last three decades.
It is worth emphasizing that Toyota is not alone in this circumstance. Many other Pakistani automakers who claim to be exporting to other nations are similarly largely reliant on imports in some form.
Despite generating billions of rupees in revenue and investing significant time in Pakistan, these so-called “automakers” have yet to fully optimize their value chains or manufacture automotive products in Pakistan from the ground up, as seen in India, Indonesia, Thailand, and other countries.
While Toyota has declared its ambition to sell other parts to foreign nations in the future, the true impact of these exports to the economy and the automobile industry remains to be seen.
rather than providing value to it.
It is critical that Toyota and other automakers in Pakistan rethink their plans and prioritize the establishment of a self-sustaining manufacturing environment, which would significantly contribute to the country’s economy and improve its standing in the global automotive market.