Hi Aarthi

Lui can be a pronoun occurring after the preposition "de" to mean "him"  --  this is not an indirect object pronoun in this case.

The verb prendre is a transitive verb and the direct object is "la voiture"

So what is being expressed is that "He has taken the car OF his friend (ownership) or FROM  his friend (previous user)

I would however have expected to see something like "Il a pris la voiture de lui"

This is how I understand it   --  hope it helps.

Jim

merci Jim!