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New auto policy: Indus motors in right position to uphold its dominance

The auto industry is considered as the heart of the manufacturing economy. It is one of the biggest providers of different kinds of jobs. The new auto policy introduced in the country will bring tremendous growth. For Indus Motors, it is an opportune time to expand their vision. As the industry is entering into greater competition, Indus Motors remained a mainstay in the country’s car industry.


Indus Motors Company Limited was incorporated in 1989. It is a joint venture agreement between House of Habib of Pakistan, Toyota Motor Corporation and Toyota Tsusho Corporation of Japan. The company is in the business of manufacturing and marketing Toyota brand vehicles in Pakistan.

The company’s flagship variant Corolla is the most popular car in Pakistan, especially in the high-engine category. The company also has Hilux in the light commercial vehicles segment and the Toyota Fortuner in the Sports Utility Vehicle (SUV) category.

Its assembling facility has a capacity of about 60,000 units annually. The company has a network of over 60 vendors supply locally manufactured parts and over 27 technical assistance agreements between world renowned manufactures and Pakistani vendors.


Majority stakes in the company are held by Overseas Pakistan Investors AG (35 percent of all shares). 25 percent of the companies are held by Toyota Motor Corporation; 13 percent with Toyota Tsusho Corporation while 6 percent are held by Thal Limited. General public holds 7 percent of the company’s stocks. Indus is the most expensive stock in the industry as its stock price having gone up from Rs998 to Rs1,808 in January 2017. Its stock has rallied well against the benchmark index in September.


Fiscal Year 2016: On average, the company has sold 50,000 units a year but sales surpassed the 60,000 mark in fiscal year 2016 as demand boomed. The company has also found a niche market for Fortuner, selling it massively.

Hilux will gain further popularity because of its reputation in the market as well the increased demand for commercial and logistics vehicles.

The company procured more than Rs40 billion worth of parts from local sources during fiscal year 2016. The company has overwhelmingly increased its market share- particularly in the car segment significantly. The market share remained 20 percent and under till fiscal year 2008 but this share reached 35 percent in fiscal year 2010 and presently, Corolla has a share of 32 percent in the car market.

Revenues: Revenues for the company have climbed substantially over time even when units sold per year did not increase as much in the past decade.

Sales: Sales have gone from Rs35 billion to Rs109 billion between fiscal year 2006 and fiscal year 2016.

Costs: Costs are dependent on international prices for different auto parts and inputs like steel; which is why margins have remained between 6 percent and 12 percent over the years.

Due to the dependence on imports, the yen to dollar parity has also affected margins over the years depending upon the strength of the yen.

Stronger yen recently has hurt margins for local automakers recently.

The company’s bottom line has expanded from Rs2.6 billion to Rs3.9 billion between financial year 2006 and fiscal year 2014.

Earnings: The company reached a tremendous high last year. Earnings jumped by 135 percent in fiscal year 2015 and reached Rs 11.5 billion in fiscal year 2016. The earnings per share have also grown accordingly. Indus remains one of the strongest scrips in the stock market.

Latest development: In latest developments, the company just came out with Hilux-Revo, which is gaining traction fast while Corolla might be up for a facelift, which would sit well with those consumers looking to buy an upgrade as well as those who are seeing a higher purchasing power and looking to shift from smaller cars.


The company is having a slower fiscal year 2017 so far, with a decline in sales numbers for both Corolla and Fortuner and clinched earnings as a result compared to first half of 2016.

The company was undergoing maintenance and up-grade of its plant that may have led to reduced capacity utilization. In the first half of fiscal year 2017, Hilux sales grew because of the new model Hilux Revo launch, but the company sold 300 less of its flagship variant Corolla compared to the period last year.

Fortuner sales also fell, according to data reported by PAMA. Revenues did not fall and remained about the same levels in first half year 2017 as last year. The subdued revenues were offset by favorable costs and improved margins (17 percent from 16 percent).

The company managed to cut costs despite higher prices for steel, which is commendable, ultimately cushioning the blow to the bottom line (growing by 3 percent in first half year 2017 year on year) even with higher than expected indirect expenses and finance costs.

Despite Corolla’s excellent popularity that it has maintained through every phase in the country, there is no denying that the three Japanese carmakers have maintained a monopoly in the car segment.

The auto industry has also enjoyed protection from the government in the form of much high import duties and other similar advantages. The existing capacity of the three carmakers is about 250,000 and about 75 percent of the capacity is being utilized.

On the demand side, however; limited choice, limited brands and models in different segment have over time forced consumers to shift to cheaper and better quality imported used cars.


Indus Motors Company Limited (IMC) has recalled over 9,000 different variants of its flagship model, Corolla, 2016-17 over concerns of the vehicles experiencing braking issues. The company advertised through local media that a select number of Corolla vehicles may experience braking problems due to under-torque of the front caliper bolts.

“Corolla 2016-17 models of selected serial numbers have been invited for inspection of under-torque of front caliper bolts,” Indus Motors spokesperson commented. All variants, including the 1.3L Xli/GLi, 1.6L Altis, 1.8L Altis and Altis Grande, are to be inspected.

Indus Motors also dispatched the same letters to the car owners titled, ‘Special Service Campaign – Free Inspection of Caliper Bolts’ in which the company also requested the customers to get their cars inspected.

While the customers of IMC have expressed their annoyance over being made to wait for their cars for months, the shareholders of the company have a reason to be happy.


The company has announced 300 percent (Rs. 30 per share) interim dividend for its shareholders at the end of the third quarter of 2016-17.

The dividend is an addition to the previous dividend of Rs50 per share (500 percent) announced equally in the last two quarters of the same financial year.

According to the financial results declared today by IMC, the maker of Toyota and Daihatsu, the share prices of IMC grew Rs53.05 per share in the third quarter of 2016-17 with a year-on-year increase of Rs15 per share. Till the end of the third quarter of 2016-17, the overall share prices surged to Rs130.34 per share by end of March 2017 as against Rs112.56 per share witnessed by end of the same period in the last financial year (March 2016).

The dividends reflect the profitability of the company, which recorded good growth in spite of the fact that number of cars sold by the company dropped during the current financial year as compared to previous financial year.

The growth in profit was driven by the earnings of third quarter from January to March 2017 during which IMC profits went up by 41 percent to stand at Rs4.16 billion. Last year, the company’s profits stood at Rs2.95 billion.

The profit increased by 15 percent to reach Rs10.244 billion during the first nine months of 2016-17. Similarly last year, their profits stood at Rs8.84 billion during the first nine months of 2015-16.

IMC received growth in earnings under the head of ‘other income’, which surged by Rs1.93 billion or 18 percent from last year, which is largely comprised on the advance payments made by customers and the money earned from the bank’s interest or investments.

According to the balance sheet of the company, this income greatly contributed to the profitability of IMC.


Toyota Corolla, the bestselling car in Pakistan, witnessed a 6 percent decline in overall sales during the period of July to March 2017 compared with last year. This financial year, the sale of Toyota Corolla stands at 40,694 units.

In the last financial year, the sale of Toyota Corolla stood at 43,344 units. In this financial year, the sale of Toyota Fortuner increased to 811 units. In the last year, the sale of Toyota Fortuner stood at 428 units. Toyota Fortuner was seen in high demand since January 2017 as 606 units were sold till March. This markedly increased the profitability of the IMC in the third quarter (January to March 2017).


Production issues at Toyota plants continue to persist, which hamper the delivery of various vehicles, with delays sometime running as long as up to six months. According to the dealers’ estimates, the delivery of nearly 15 thousand Toyota Corolla cars is due to customers to date.

A majority of customers who booked their cars have not received their cars for the past six months despite paying nearly 50 percent advance to the company.


Indus Motors Company (IMC) is preparing to launch the 11th generation Corolla facelift in Pakistan. Launched back in 2014, the 11th generation Corolla is in its third year of production in the country, and as indicated by CarSpiritPK, IMC would launch the facelift somewhere during mid 2017.

The 11th gen Corolla facelift has already reached several markets of the region and is doing well to continue the success of this generation before the 12th gen replaces it. The Company vows to provide best services to customers.

The Indus Motor Company, an authorized franchise of Japanese giant Toyota Company in Pakistan has vowed to provide international-standard services to its customers in the country. Indus is true believer in customer first philosophy and is zealous in providing best quality service in town.

Technical observations are always addressed at the earliest, with development of effective counter measures for re-occurrence prevention. Company has always initiated proactively ‘special service campaigns’ through media adds in the past as well, which serves a vital role in strong bond of trust with the customer through media.

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