IMC hasn’t announced layoffs despite 55pc cut in production: CEO

KARACHI: Chief Executive Officer, Indus Motor Company (IMC), Ali Asghar Jamali has said that despite registering a 55% reduction in production, they have not gone for any layoffs yet.

“The automobile sector of the country faces major challenges including weak demand, rapid price escalation, expensive auto financing, higher taxes, and deteriorating macros,” said Jamali.

He said that despite uncertainty regarding supply-side recovery, they have not opted for any layoffs which show their commitment to the country and the wellbeing of their employees and added that IMC faced a 58% decline in its volumetric sales from January to June 2023 alone.

Jamali said that the local auto industry has been facing the issue of LCs for quite some time, making it difficult for the industry to meet its production targets, which in turn is badly affecting sales.

Besides, he said, the import of used cars is gaining momentum, severely impacting the already affected local auto industry, as total used car imports are more than the production of some OEMs (Original Equipment Manufacturers).

Furthermore he said that more than six thousand used cars were imported in the financial year 2022-23, with more than 1,800 units being imported only in May and June this year.

“In the presence of minimum foreign exchange reserves held by SBP, the government should refrain from permitting the policy of importing of used cars and instead support the local auto industry, which is producing cars locally,” said Jamali.

He said that the industrial growth of the auto industry is essentially linked with a properly designed planned import policy and the growth of the local auto industry can never be achieved, if import of used cars is freely allowed by the government.

“This issue of used car imports is also nullifying the plausible localisation achieved by the local auto industry, in terms of parts and also future localisation plans,” he said.

Jamali said that Pakistan is one of the worst victims of climate change and needs strategic measures on every front to address these challenges.

According to Global Carbon Budget 2022, annual CO2 emissions in Pakistan stood at 229.51 million tons in 2021, which was 9 percent higher than 210.38 million tons in 2020.

“HEVs are the most sustainable solution to the country’s economic problems, as it would help achieve macroeconomic goals, employment generation, exports boost, and imports reduction as well,” he opined.

He said that HEVs are the most logical option to reduce carbon dioxide emission in fossil fuel reliant countries like Pakistan and India, which have 62% and 75% share of fossil fuel in their energy mix respectively.

“Toyota has made an investment of $ 100 million to produce HEV vehicles in Pakistan and Toyota Cross, Pakistan’s first locally manufactured HEV SUV is to be launched soon,” he highlighted.

He said that the adoption of hybrid technology will also result in the reduction of import bill, as 30,000 units of HEVs will save around $ 37 million per annum.

Copyright Business Recorder, 2023