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Indus Motor Company Ltd scores rise in revenues and profits

Economic managers of Pakistan reveal that the Government of Pakistan by the new Auto Development Policy (ADP) is completely committed to enlarging full support to the domestic automotive sector. It is also predicted to promote healthy competition in the sector leading to increased choice for the customers. They have also mentioned that the safety and security condition in the entire country, particularly in Karachi, has enhanced tremendously in the last five years thus resulting in better economic indicators and bringing in new investments. It is also believed that under the China Pakistan Economic Corridor (CPEC), infrastructural development in Pakistan and economic activities will immense rise the demand for commercial vehicles. In the country ADP 2016-21 has attracted significant investments of over $800 million, they added. ADP has generated tremendous interest in Pakistan’s automobile market. It is also said that the new Auto Policy has not included any measures or incentives for auto parts manufacturers. The true growth and benefits of technology transfer, job creation and local value addition can only be completely realized by addressing this missing link. Statistics revealed that the import of used cars has grown considerably to 44,760 units for six months, as compared to 24,100 units last year for same period.

FINANCIAL PERFORMANCE (Rupees in ‘000)
Details December 31, 2017 (Un-audited) June 30, 2017(Audited)
Non-Current Assets 7,183,628 6,438,224
Current Assets 64,471,015 57,441,499
Non-Current Liabilities 8,762 3,933
Current Liabilities 38,193,710 32,678,828
Source: IMC

The current Government of Pakistan has modified the procedure for payment of C&F, duties and taxes, in an attempt to make sure the genuineness of such imports and avoid misuse of such facilities by commercial importers. This is the step in the right direction to enhance documentation of the economy. However, this modification has now been withdrawn. The abrupt and significant depreciation in the rupee towards the end of first half of the year, has grown the cost of imported inputs by the company and its vendors. This ultimately forced the company to regretfully pass on certain impact to the customers in terms of price increase of vehicles.

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In Pakistan, Indus Motor Company Limited (IMC) remains committed to ‘Customer First’ philosophy that demands high level of contribution, dedication and efficiency from all levels in the company to delight all its valued customers in the entire supply chain. During the half-year ended December 31, 2017, the financial statements of the company revealed that the combined sales of IMC CKD and CBU for the half year ended December 31, 2017 reached at 30,651, up 6 percent over 28,833 units for the corresponding period last year. However, IMC’s market share fell from 29 percent to 25 percent for six months period, chiefly on account of higher growth of the market. To complete the rising demand and shorten the delivery time, the company operated its manufacturing facilities beyond capacity working daily in overtime hours and off Saturdays to produce 30,502 units, up 5 percent over 28,996 units produced during the corresponding period last year.

The financial experts of the company also mentioned that the company’s net sales revenues for the half year closed December 31, 2017, grew to Rs63.3 billion as against to Rs51.4 billion for the corresponding period last year, while profit after tax grew to Rs7.36 billion as against Rs6.07 billion attained for the same period last year. The rise in revenues and profits is chiefly because of enhanced turnover of both CKD and CBU vehicles against last same period along with improvement in operational efficiencies and sales mix. In the month of August 2017, the Company introduced Toyota Corolla Big Minor Model Change with best in-class safety and luxury features. In the month of December 2017, the company showcased its Camry Hybrid Vehicle, a luxury sedan with a powerful shape and captivating style, to key customers. During the period, the management also celebrated the milestone of the production of 750,000 vehicles since inception. The Spirit of “Kaizen” or Continuous improvement is part of the company’s basic values.

The management of the company also mentioned that various actions were taken to eradicate bottlenecks and improve production capacity. A multi-billion rupee investment is being made in the paint shop to raise production capacity which is predicted to yield results from the last quarter.

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