Karachi, October 30, 2024 – Indus Motor Company Limited, the manufacturer of Toyota vehicles in Pakistan, has called on the government to implement fair and consistent taxation policies to foster growth within the auto industry.
In its financial report for the quarter ending September 30, 2024, the company stressed that the fiscal year 2024-25 will play a pivotal role in shaping Pakistan’s economic trajectory.
Highlighting the importance of political stability for economic resilience, Indus Motor noted that ongoing turbulence could hamper industry performance. The auto sector, in particular, anticipates a dip in local production volumes in the coming quarter due to the influx of imported used cars, a trend that could negatively impact Completely Knocked Down (CKD) operations and disrupt market dynamics.
Indus Motor emphasized the need for fair competition, pointing to the current disparity in taxes between new and imported used vehicles, which tilts the playing field. The company raised concerns over the taxation model based on engine cubic capacity (CC), arguing it imposes inconsistencies on vehicles with similar price tags but varying tax rates, hindering a level playing field for all market players.
Indus Motor outlined several recommendations aimed at supporting the auto sector’s growth and enhancing affordability. The company urged the government to remove restrictions on auto financing, lower interest rates, and introduce incentives for overseas Pakistanis to purchase locally manufactured vehicles instead of opting for imported ones. Rationalizing vehicle duties and taxes would not only enhance affordability for consumers but also drive increased sales volumes, ultimately benefiting government revenue and generating employment.
For the recent quarter, Indus Motor reported a strong sales performance, with sales of CKD and Completely Built-Up (CBU) units increasing by 37%, reaching 6,292 units, up from 4,583 units in the corresponding period last year. Based on Pakistan Automotive Manufacturers Association (PAMA) data, the company held a market share of approximately 23%, fueled by the successful launch of the Toyota Yaris with a minor model upgrade that caters to evolving consumer preferences.
The company’s financial metrics reflected robust growth. Net sales turnover for the quarter surged to Rs. 41,603 million, compared to Rs. 32,671 million last year, while profit after tax rose to Rs. 5,091 million from Rs. 3,216 million. This improvement in profitability stemmed from lower import costs, favorable exchange rates, strategic cost-cutting initiatives, and increased localization of auto parts. Additionally, a higher return on investments contributed positively to the company’s earnings.
Earnings per share (EPS) for the quarter reached Rs. 64.77, compared to Rs. 40.91 in the same period last year. The Board of Directors announced a first interim cash dividend of Rs. 39 per share, up from Rs. 24.5 per share in the previous year, reflecting Indus Motor’s strong financial health and commitment to rewarding shareholders. Transactions with related parties, as per financial disclosures, were conducted within the normal course of business.