Karachi, October 28, 2024 – Indus Motor Company Limited, Pakistan’s official assembler of Toyota vehicles, announced a three-day production suspension due to critical shortages in raw materials and essential components.
The temporary halt, set for October 29 to October 31, reflects the company’s ongoing struggle with supply chain disruptions affecting automotive manufacturers globally.
In a formal communication to the Pakistan Stock Exchange (PSX), Indus Motor cited diminishing inventory levels of key materials, which are essential for maintaining production schedules. “The company is currently experiencing low levels of raw material and component inventory and is facing ongoing supply chain challenges,” the statement read. “This has resulted in a shortage of parts and components necessary for vehicle production. As a result, the company is unable to meet its production requirements.”
The production halt comes on the same day that Indus Motor reported remarkable financial results for the quarter ending September 2024. The company’s after-tax profit surged by an impressive 58% year-over-year, reaching Rs 5.09 billion, compared to Rs 3.22 billion during the same period last year. Revenue growth, primarily driven by strong customer demand and favorable contract terms, fueled this robust financial performance.
In addition to strong quarterly profits, Indus Motor’s earnings per share (EPS) rose significantly to Rs 64.77, marking a notable increase from last year’s Rs 40.81 in the corresponding quarter. To reward its shareholders, the board declared an interim cash dividend of Rs 39 per share, following the meeting held on October 26, 2024.
The company’s challenges underscore a broader issue affecting the automotive industry as a whole, where disruptions in global supply chains have led to persistent material shortages and production delays. The shortages of semiconductors and other critical components have pressured automakers worldwide, leaving manufacturers like Indus Motor with little option but to adjust production timelines.
Industry experts note that, while Indus Motor’s financial performance showcases resilience amid demand pressures, sustained disruptions could impact future production capacity if supply chain constraints persist. Market analysts also suggest that, despite the temporary suspension, Indus Motor’s financial standing is bolstered by high demand, giving it room to navigate these disruptions without significant impact on long-term profitability.
As supply chain uncertainties continue to ripple through the automotive industry, Indus Motor’s decision highlights the delicate balance between meeting production goals and managing unpredictable resource availability. Stakeholders will be closely watching how the company navigates these ongoing challenges, as well as the wider implications for the automotive sector in Pakistan.