Automobiles: ‘Influx of imports adversely impacting operations’

Shareholders voice concerns over govt’s lenient import policy at Indus Motor AGM.

LAHORE:

“Non-production days (NPDs) at Indus Motor Company (IMC) plants are due to the huge influx of imported used cars which affected the demand of locally produced cars negatively,” said IMC Chairman Ali S Habib while answering shareholders’ concerns on downbeat production schedule during the company’s 23rd annual general meeting held on Saturday.

Shareholders vowed to raise their voices at the relevant forums against hostile policies to help the local automobile industry to flourish and continue being a major contributor to the national economy.

Habib, speaking on the occasion, mentioned that amid all economic and political challenges, the business environment for automakers and parts supplier remained uncertain as the industry continuously appealed for logical reasoning by decision makers, keeping in view the greater national interest. Compounded with depreciation of the rupee against major currencies and other inputs, inflation, etc impacted the operations negatively.

While answering to a query about launch of new models, he said that launching a new model is equivalent to setting up a new company as it requires not only a complete product development and marketing strategy but also new parts and equipment which was time consuming and required huge capital investment. Moreover, the current policies in the auto industry are unfavourable for investment in manufacturing.

During the meeting, automaker’s financial and operating performance for the year ended June 30, 2012 was reviewed and audited accounts were approved by the board. The sales and production of Toyota and Daihatsu brands for the year ended June 30, 2012 were 55,060 units and 54,917 units respectively compared to last year’s 50,943 units and 50,759 units respectively. The company’s sales revenue increased to Rs77 billion, up 25%; with the after tax profit of Rs4.3 billion, against Rs2.7 billion achieved during the year ended June 30, 2011. Earnings per share increased to Rs54.7 compared to Rs34.9 in the preceding year.

For the period, the total dividend of Rs32 per share was declared compared to Rs 15 per share dividend paid during the same period last year.

The shareholders appreciated the management for company’s performance and dividend payout in testing times for the industry and expressed hope that the company will continue to perform better in the coming years if the government reconsiders the policies in favour of local industry as per global norms.

Published in The Express Tribune, September 30^th, 2012.