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Indus Motor Company Limited (IMC), the assembler of Toyota vehicles in Pakistan, has said import restrictions imposed by the central bank and ongoing rupee depreciation are denting the country’s auto sector.

The company’s top officials disclosed the development in a corporate briefing held on November 8, 2022 to discuss its latest financial result and future outlook.

According to Arif Habib Limited (AHL), which participated in the session, the company’s management said import restrictions imposed by the State Bank of Pakistan (SBP) and the volatile exchange rates remain challenging for the auto sector.

Indus Motor Company suspends bookings of all Toyota vehicles in Pakistan

Officials also said the industry is bearing the burden of escalating production costs on account of the current rupee depreciation, while demand has declined due to the economic downturn, with high interest rates and augmented duties and taxes on vehicles.

They have called for the removal of import restrictions as they said that auto sector only comprises of 3% of the total import bill. The company informed that the localization rate, in terms of value of Corolla and Yaris stands at 65%, while for IMV and Fortuner it stands at 55%

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“The management foresees another quarter of manufacturing loss given import restrictions remain in place,” shared the brokerage house.

The company also said recent flood destruction along with higher inflation and low purchasing power of consumers will hurt demand of the entire auto sector in the future, said AHL.

Last month, INDU announced its financial result for Q1FY23, whereby the company posted a Profit After Tax (PAT) of Rs1,297 million, alongside earnings per share (EPS) of Rs16.5, down by 76% YoY.

Tracking rupee's movement, Indus Motor Company reduces car prices

The decline in profits was mainly driven by lower sales revenue (-43% YoY), resulting in negative gross margins. Indus said lower production and frequent plant shutdowns on the back of limited imports allowed by SBP, the sales volume of CKD units went down by 52.4% YoY.

Pakistan’s auto sales declined by over 50% to 34,472 units during the first quarter (July – September) of 2022-2023, as compared to 68,897 units recorded in same period last year, data released by Pakistan Auto Manufacturers Association showed.

Comments

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Sagheer Qureshi Nov 10, 2022 01:55pm
its good for pakistani people you are denting to entire nation the car whuch was 32 lac in 2020, 2021 now you are selling 45 to 50 lac shame on you people you are looters and Arif Habib is big fraudiya and looter, he looted the NIYA NAZIMABAD ALOTTEES, you people have your black past
thumb_up Recommended (0)
Fazal amin Nov 10, 2022 08:43pm
@Sagheer Qureshi, you are 100% correct
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Syed Saqib Zia Nov 11, 2022 03:20pm
Main reason for declining in sales is overpricing with low quality as compare to outside Pakistan. Investors played the vital role in car price hike with unreal demand .
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Rashid siraj Nov 13, 2022 07:55pm
یہ بلکل چھوٹ بات ھے کے اپ نے گاڑی 65 پرسنٹ لوکل پارٹس سے بنائی ھے آپ کو جو بھی مال دوسرے لوگ سپلائی کرتے ھیں وہ بھی چائینا سے منگوا کر دیتے ھیں اور یہ کسی بھی طرح کی ڈیلیشن نہیں ھے بلکہ یہ ایک طرح کا فراڈ ھے
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