Indus Motor Company, the assembler of Toyota vehicles in Pakistan, has warned that escalating geopolitical tensions in the Middle East could disrupt the supply of imported auto parts, potentially affecting production timelines in the country's automobile sector.

The warning was shared during a management briefing cited in a report by a local daily, which stated that logistical congestion, higher freight costs and shipping delays may place pressure on supply chains in the coming weeks.

Pakistan's automobile industry relies heavily on imported completely knocked down kits and components, making it vulnerable to disruptions in global shipping routes. The situation has been compounded by tensions around the Strait of Hormuz, where the Islamic Revolutionary Guard Corps has warned of potential risks to vessels passing through the vital energy and trade corridor.

Despite the uncertainty, the company stated that new models and product changes remain under consideration. However, no timeline has been finalised due to the evolving situation.

The automaker also expects the government to rationalise taxes in the sector, noting that some vehicle categories currently face a 25% sales tax, which could be reduced to around 18% to maintain neutrality across the industry.

Management indicated that vehicle demand in Pakistan could gradually recover with economic stability, moderate financing rates and controlled inflation. It also called for a clear Auto Policy 2026-31 aligned with reforms under the International Monetary Fund programme.