INDUS MOTOR COMPANY LTD.
S.KAMAL HAYDER KAZMI,
Research Analyst, PAGE
Nov 21 - 27, 2011
Indus Motor Company (IMC) is the sole distributor of Toyota and Daihatsu vehicles in Pakistan. The company's plant is the only manufacturing site in the world where both Toyota and Daihatsu brands are manufactured.
Heavy investment has been made to build its production facilities based on the state of art technologies.
IMC is a joint venture between the House of Habib, Toyota Motor Corporation Japan (TMC), and Toyota Tsusho Corporation Japan (TTC) for assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan since 1990.
Toyota Motor Corporation and Toyota Tsusho Corporation have 25 per cent stake in the company equity. The majority shareholder is the House of Habib.
IMC's product line includes six variants of the newly introduced Toyota corolla, Toyota Hilux single cabin 4x2 and 4 versions of Daihatsu Cuore. IMC's production facilities are located at Port Bin Qasim industrial zone near Karachi in an area measuring over 105 acres.
During the quarter Sep 30, 2011, the combined sales of Toyota and Daihatsu brands were increased by seven per cent to 12,974 units compared to 12,114 units sold for the same period last year.
The company was able to step up production to match demand with an increase of four per cent to 12,632 units compared to 12,186 units produced for the same period last year.
IMC's combined market share of passenger cars and light commercial vehicles declined by five per cent to 29 per cent during the quarter and is attributable to distortions caused in the market place by deferred sales on account of tax break offers by the government to the consumers effective in 2011.
The company sales revenue from complete knock-down (CKD), completely build unit (CBU) and spare parts grew nearly 20 per cent to Rs17.1 billion compared to Rs14.3 billion for the same period last year. The profit after tax at Rs937 million for the first quarter was an all time high, up 62 per cent compared to Rs577 million for the corresponding period last year.
Pakistan's auto industry operations were impacted by heavy flooding in southern Sindh, great Japan earthquake, poor law and order situation and frequent power outages that affected production at original equipment manufacturers (OEMs) and the part suppliers alike. In spite of that, the auto industry posted sales of 44,174 units compared to 34,576 units sold during the same period last year.
Most of this growth of 28 per cent is attributable to deferred buying by the customers who took advantage of reduction in general sales tax and excise duty announced by the government in early June 2011. Used CBUs imports continued to impede full growth potential of the local auto industry.
During the quarter, 4,488 units were sold compared to 705 units. High regulatory duty on new CBUs restricted demand to 482 units, reflecting a decline of 15 per cent compared to 569 units sold for the same year last year.
HUMAN RESOURCE DEVELOPMENT
With the assistance of Toyota Motor Corporation, the company has set up two Toyota technical education programs at the Government College of Technology, Lahore and St. Patrick's technical institute Karachi, where automobile diploma holders are provided training in the latest automobile technology.
To further professionalism in the field of journalism, the company held Pakistan's first National auto journalists workshop, which was conducted by an international expert on auto journalism and announced an annual auto journalists award.
The ongoing global crisis especially in the euro zone countries coupled with the weakening of the domestic economy caused severe depreciation of Pak rupee against US dollar and Japanese yen forcing all the OEMs to increase their retail prices to partially offset their deteriorating gross margins.
Indus motor actively promotes both individually and with partners philanthropic activities that help strengthen communities and contribute to the enrichment of society.
The company has always believed in healthcare provision for the citizens and has over the years provided support to various health care institutions. The company has also been at the forefront and actively involved in providing assistance whenever the country has been faced with a natural calamity such as earthquake, floods etc.
IMC has also redefined its corporate social responsibility (CSR) strategy and selected projects that have a strong business connect such as road safety. IMC is at the forefront of several road safety initiatives aimed at increasing road safety across the country. The main purpose of road safety initiatives is to create awareness in society and help Pakistani citizens create a culture of safer road environment for all users resulting in minimizing traffic accidents and traffic congestions.
As a concern beyond cars, the company is not only making social contributions for the present, it is also making continuous investment for the future of Pakistan. Management not only provides assistance to over 20 schools and educational institutions, but also partner with NGOs to construct schools.
The company provides 50 scholarships to university students. Many students come to Indus for internships. IMC's apprenticeship training program continues to develop high quality human resources. Indus motor encourages professionalism in the technical arena.
IMC has always been in the forefront of activities that preserve and improve environment. It aims for growth is in harmony with the environment throughout all areas of business activities. The team at Indus is committed to continuously improve the company's environment management system to identify and avoid those activities that have a negative environmental impact, comply with all applicable legal, regulatory and other requirements, and assist society by making the environment friendlier.