The Board of Directors of Indus Motor Company (IMC) Ltd. met on Tuesday to review the company’s financial and operating performance for the year ended June 30, 2019.
The company posted net sales revenue of Rs. 157.9billion, up by 13% as compared to Rs. 139.7billion last year, while profit after tax declined by 13% to 13.7 billion from Rs. 15.8 billion posted last year and profit before tax declined by 17% from Rs. 22.9 billion last year to Rs. 18.9 billion in the year ended.
The decline in the automobile industry is attributed to an overall economic slowdown, rising interest rates, and escalating vehicle prices on the back of the plunging Pakistani rupee against the US dollar and sky-rocketing inflation. The recent restriction on the import of used vehicles into the country is a positive step to promote local manufacturing in Pakistan.
Application of 10% FED in Oct 2018 on vehicles above 1700cc negatively impacted on luxury vehicle segment during last 9 months of FY 2018-2019. FED application for all types of passenger vehicles and has introduced three slabs of 2.5% – 7.5%, along with increase in rates of additional customs duty from 2% to up-to 7% on inputs to manufacture vehicles. Industry-wide production capacities surpass total market demand and the vehicles are now readily available while new products offer wider customer choices.
The company, despite an economic slowdown, operated its manufacturing facilities beyond capacity working daily in overtime hours and off Saturdays and has achieved the highest ever production record of 65,346 units, up by 3.91% compared to 62,886 units last year.
Ali Asghar Jamali, CEO Indus Motor Company said, “We are committed to the Pakistani market and to our loyal customers who have shown great trust in our products year on year. The combined impact of tax increases and PKR devaluation has increased cost of inputs and ultimately result in further price increases. For sustained growth, consumer confidence is necessary. We urge the government to introduce policies that will restore market confidence and accelerate economic activities across the board.”