Indus Motor Company (IMC) has revealed its profit margins after paying a total amount of Rs.13.71 billion in taxes for the financial year 2018-19.
According to a press release, a meeting was held by the Indus Motor Company (IMC) on 27th August 2019 in which its Board of Directors looked into the auto manufacturers’ operational and financial performance during the fiscal year that ended on 30th June 2019. The company paid a hefty amount of taxes during this period. According to the details, the company’s overall net sales revenue went up by 13% to Rs.157.9 billion as compared to Rs.139.7 billion in the corresponding period last year. After the payment of Rs.13.71 billion as taxes, the company’s profits declined by 13% to Rs.13.7 billion from Rs.15.8 billion last year. Even before paying the taxes, the company’s profits were down by 17% to Rs.18.9 billion as compared to Rs.22.9 billion in the previous year.
The automobile industry is in deep crisis nowadays as the sales of locally assembled cars are plunging considerably. Even the top-selling cars of the auto manufacturers are struggling to keep up their sales numbers in the current economic slowdown situation in the country. In the last year, Toyota Indus has used its manufacturing plant efficiently to produce a record number of 65,346 units, up by 3.91% as compared to 62,886 units last year. The company achieved the feat by working extra hours beyond the capacity of the production plant. The CEO of Indus Motor Company, Ali Asghar Jamali released a statement in which he said that the company is committed to the local auto sector and will keep on delivering for its loyal customers who have shown great trust in Toyota’s products over the years.
Auto sector facing a crisis:
The economic contraction situation in the country has resulted in a decline in car sales in the country. It’s mainly due to the imposition of additional taxes and duties which has raised the car prices massively. The other major contributing factors include the sharp depreciation of the local currency against the US dollar over the past year, increased interest rates and uncertainty in the local market. The government has taken several steps to curb the import of vehicles to restrict the outflow of foreign exchange from the country. However, the commercial importers are still misusing the import policy formulated by the Ministry of Commerce.
Moreover, the imposition of 10% FED on 1700 cc and above cars back in October 2018 negatively affected car sales. In its first budget, the government expanded the circle of FED as it imposed the duty on all categories of cars under three slabs ranging from 2.5% to 7.5%. With an increase in the advanced customs duty on raw materials imported for the manufacturing of vehicles, the auto industry almost fell to the ground. The purchasing power of the consumers dropped tremendously, and the production capacity of auto industries is exceeding the demand in the market. Due to which the cars are readily available in the market without any extra charges.
On the other hand, the cost of production has increased massively in the current circumstances forcing the auto manufacturers to raise the prices of their products. The overall sales of Toyota’s CKD and CBU units went up by 3.5% to 66,211 units as compared to 64,000 units in the previous year. The company, however, holds a 22% market share of locally manufactured passenger cars and light commercial vehicles. The lineup of the company’s hot-selling model Corolla was further strengthened by the introduction of an automatic version of its entry-level XLi variant. The company also introduced the first of its kind application, Toyota Connect for its customers. In its recent move, the automaker has offered a limited-time free registration on the purchase of its 1.3L variants of Toyota Corolla to enhance the declining sales.
Sales stats of Toyota products:
Nonetheless, the sales of Toyota Corolla went up by 10.3% to 56,720 units as compared to 51,412 units last year. The company sold 6070 units of Hilux LCV’s, down by 18.7% as compared to 7470 units in the previous year. The sales of Toyota Fortuner declined by 37.6% to 2609 units as compared to 4186 units last year. Toyota Indus contributed a total of Rs.56 billion to the national exchequer, amounting nearly 1% of the total revenue generation by the government of Pakistan.
The government should introduce consistent and favorable policies for the local auto manufacturers to revive the auto sector once again. The auto industry is filled with huge potential for growth but needs an agreeable working atmosphere. For sustained growth, there is an urge to revive the consumer’s confidence yet again in the local market. The government should take necessary steps to accelerate the economic activities in the country to boost up the sales of the automobiles. That’s it from our side. Mention your suggestions in the comments section below and stay connected with PakWheels for the latest updates on the automobile industry.
Ahmad Shehryar writes too many pro-Japanese mafia articles. Same can be checked in past few days on PW blogs since the Japanese mafia started “lutt gai, barbaad ho gai!” campaign.