No Layoffs Despite the Slowdown, Says Indus Motors

Indus Motor Company (IMC) has announced that there will be no layoff of employees despite the slowdown in production.

Despite previous reports, IMC confirms that they have resumed production to 50% capacity from October 1 after closure over the last 15 days of September.

A spokesman of IMC said:

The country is going through an economic slowdown and the overall market has remained volatile. This has indeed been a great struggle. The factors largely contributing to this include Rupee depreciation, reduction in car financing, increase in Federal excise duties (FED) and higher input costs.

“Over a 12-month period, the rupee depreciated over 31.6%. Additionally, the Government of Pakistan has imposed 7% ACD, 3% additional sales tax on all imports and 7.5% FED for vehicles of 2000cc and above. There is also a fresh Federal Excise Duty of 2.5% and 5% FED on locally manufactured vehicles. All this is having an adverse impact on the auto sector and has resulted in a major decline in sales. Of the total cost of a vehicle, 40% comprises the taxes and levies imposed by the government. It is a misconception that the rising rate of tax collection will not affect vehicle sales and total tax collection; in fact, the decline in sales will result in a decline in tax collection from the auto sector,” he added.

“Yet, we have decided not to go for layoffs despite the hard times. We are absorbing this financial crunch,” he said.

A general perception exists in Pakistan that cars assembled locally have gradually become expensive without any value addition. The prices of cars have not increased but have been adjusted according to the depreciation of the Pakistani rupee against the dollar. Prices have, in fact, been reduced by the manufacturers but it seems as if they have increased since the PKR is depreciating in relation to the US dollar and the customer is paying more in rupee terms.

The spokesperson pointed out that with every model change, IMC has successfully incorporated more localization, increased specifications and reduced the dollarized cost by procuring local parts worth over PKR 200+ million every working day.

The spokesman added that in 1993, the price of Corolla was $19,630 with 15% GST and the PKR value was Rs. 27 against the dollar. Now, in 2019, the same Corolla is available for $15,618 despite 17% sales tax and 5% FED while the PKR value against the dollar is Rs.160. This means better specifications at a low price.

He said this clearly showed that over the years, IMC had localized more and sustained the burden of heavy taxation and PKR devaluation to keep providing quality vehicles at low prices to its valued customers.


  • yeh sara topi drama hah… fake demand increase kar k yeh prices aur increase karna chahtay hain… Chawal log…

  • The local cars assemblers always critical of ‘reconditioned cars’ liberal imports,under different schemes. The stake holders in second hand cars imports, are big Show Rooms Owners, Big Black Money Holders,and ofcourse the Customs which got big chunks of grants from super rich importers. Such short sighted policies at the outcome greatly depress the local manufacturers cars sale. And this is the prime reason for halt in production. It’s upto FBR & Ministry of Commerce, to assess the National interests in marketing new cars, or selling used cars. Some of these used cars have very bad defects, to the surprise of buyer. It’s far better to buy locally assembled cars, with warranty.


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