Karachi, Pakistan – Indus Motor Company Ltd (IMC) has announced a temporary halt in production from October 29 to 31, citing a shortage of parts and ongoing supply chain issues. This decision follows several previous production suspensions earlier this year, highlighting persistent challenges in securing raw materials and components.
Production Challenges and Financial Performance
IMC’s recent stock filing revealed that the company is struggling with low inventory levels, impacting its ability to meet production demands. Earlier this year, IMC had to shut down operations for several periods, including July 15-22, August 6-8, and September 26-30, all due to similar parts shortages.
Despite these setbacks, IMC reported a significant increase in net sales turnover. For the quarter ending September 30, sales rose by 27% to Rs41.6 billion, up from Rs32.6 billion in the same period last year. This growth was primarily driven by higher sales volumes of Completely Knocked Down (CKD) units and the successful launch of a minor model change for the Toyota Yaris.
Strong Profit Growth
The company also reported a remarkable 58% increase in profit-after-tax, reaching Rs5.091 billion compared to Rs3.216 billion last year. This growth can be attributed to several factors, including reduced input costs due to favorable exchange rate movements, cost-cutting measures, and increased localization of parts. Additionally, higher returns on investments contributed positively to the overall results.
CEO’s Call for Government Reforms
Ali Asghar Jamali, IMC’s CEO, highlighted that while the first quarter of FY25 showed some economic progress—such as improvements in trade balance and a reduction in the current account deficit—there are still significant challenges. He pointed out that high taxes and duties continue to raise vehicle prices, making it essential for the government to consider reforms.
Jamali urged the government to:
- Lift restrictions on auto financing
- Lower financing rates
- Rationalize vehicle duties and taxes
He believes these measures will not only improve government revenue but also generate employment and facilitate greater localization of parts, ultimately saving foreign exchange.
Financial Highlights
- Earnings per share surged to Rs64.77 from Rs40.9 in the previous year.
- The board of directors declared a preliminary interim cash dividend of Rs39 per share.
