During the quarter ended September 30, 2019. Indus Motor Company Limited (IMC) combined sales of Completely Knocked Down (CKD) and Completely Built-up Units (CBU) units declined by 56 percent to 6,839 units against 15,560 units sold in the corresponding period previous year. The market share of Indus Motor Company in the overall market reached at approximately 20 percent for the period under review. No doubt, IMC has played a major role in the development of the entire value chain of the local auto industry. It is also proud to have contributed in poverty alleviation at the grass root level by nurturing localization. This, in turn, has directly created thousands of career opportunities and transferred technology to over 46 vendors supplying parts.
In the Company’s quarterly report, IMC produced 8,036 units of vehicles for the three month period, registering a 49.7 percent decline, as against to 15,977 units produced in the corresponding period last year. Slow movement in sales volumes was observed in all segments, mostly on account of price impact because of additional custom duty rise and levy of FED, while rise in interest rates has reduced auto financing. Indus Motor Company remains engaged to the customer first philosophy that demands a high level of contribution, dedication and efficiency from all levels in IMC, to ensure utmost customer satisfaction throughout the supply chain. This is the cornerstone of the ‘Toyota Way’ and critical for the long-term success of the Company.
In the report also mentioned that the second quarter is always challenging for the auto industry because of the calendar year-end phenomenon as customers seek to defer purchase of cars and opt for a new-year registration. However, the second half of the fiscal year is predicted to have enhanced volumes based on better economic conditions mostly on account of income generated through agriculture sector. The imposition of FED on locally-manufactured vehicles and Additional Customs Duty and Custom Duty on import of raw materials needs to be revisited through the Government of Pakistan in order to attain sustainable volumes for the sector. This will not only support the auto sector, but will also result in higher overall revenue for the government. The Company is also a major tax payer and significant contributor to the Government’s exchequer.
The Company observed approximately thirty Non Production Days (NPDs) during the quarter 2019 as a means to minimize costs. Further, from the month of October, IMC is operating on a single shift basis, which is predicted to continue until market demand is enhanced. Report also showed that IMC’s net sales turnover for the 1st quarter closed September 30, 2019, declined by 41 percent to 20.72 billion as against to Rs. 34.99 billion, for the corresponding period last year, while profit after tax declined by 62 percent to Rs. 1.32 billion as compared to Rs. 3.51 billion attained in the corresponding period previous year. The officials also revealed in the report that the net profit has been impacted this year against the corresponding period previous year, mostly because of rise in cost of inputs on account of rupee devaluation against all major currencies and decline in other income. Furthermore, the earnings per share (EPS) of the company for the first quarter ended September 30, 2019, was recorded to Rs. 16.78 as against to Rs. 44.63 during the corresponding period previous year.
IMC’s product is delivered to end customers nationwide through a strong network of 46 independent 3S Dealerships spread in Pakistan. Since inception, IMC has sold greater than 875,000 CBU/CKD vehicles. It has also demonstrated impressive growth in terms of volumetric increase. From a modest beginning of 20 vehicles per day production in 1993, daily production of IMC has now increased to 268 units per day in 2018-19. This has been made possible through the development of human talent. The Company has a workforce of 3,349 persons at year end. It invests heavily in training the team members and management employees and creating a culture of high performing and empowered teams who work seamlessly across the various processes in search of quality and continuous improvement. It is also said that IMC employees are encouraged to pursue high standards of business ethics and safety according to the core values of the Company; they communicate candidly by giving bad news first and extend respect to people. In this period, it is also said that IMC has made large scale investments in improving its own capacity and in meeting customer requirements for new products. Today, Corolla is the largest selling automotive brand model in the country. This country is the highest Corolla-selling nation in the Asia-Pacific region and also has the distinction of being No. 1 in Toyota’s Asian market.