ISLAMABAD: At a time when nationwide lockdown has disrupted the entire auto chain of Pakistan, Indus Motor Company (IMC) has announced a support package for its dealers and vendors.
Although the details of the package have not been shared by the company, sources in the auto sector claim that the package was aimed at supporting the company’s associated businesses, which have also been badly affected by the virus outbreak.
Sources informed that despite stagnation in revenue generation activities, vendors and dealers were bearing most of the overhead costs and expenses (debt servicing and staff salaries) and were refraining from laying off their employees.
Apart from IMC, Honda Atlas Cars and Pak Suzuki Motor have also not laid off employees or reduced salaries during the past two months. However, vendors of automobile assemblers were in a quandary as they were mainly dependent on sale of local vehicles.
Dealers said it was encouraging that one of the biggest auto manufacturers of the country has come forward to support those striving hard to survive amid lockdown.
“IMC has announced different support packages for us so we could cope with the prevalent crisis,” said Salim Godil, Chief Executive Officer (CEO) of Toyota Central Motors & Toyota Society Motors. “Under one of the schemes, ‘short term interest-free loans’ will be offered to vendors and dealers during this month.”
Feroz Khan, IMC vendor and CEO of Omar Jibran Engineering Industries Ltd said, “IMC has played a pivotal role in the development of local engineering base for the last three decades. This support package in such crucial times further depicts its commitment to the cause of facilitating the local industry.”
It may be noted that at least 46 vendors and 46 dealers were currently working with IMC, the makers of Toyota vehicles in Pakistan. It also has around 30 technical agreements (highest in the sector) for technology transfer in the country.
“As other vendors and dealers are likely to lay off at least 20pc of the workers, leading Japanese assemblers are yet to show the exit gate to their workers and staffers despite production closures since the second week of March,” said an industry insider.
Although the government has announced to relax countrywide lockdown after May 9, it was unclear as to what extent would the ‘ease’ be provided to large-scale industries.
It is pertinent to mention that the sale of passenger cars had plunged by 71.8pc to 5,796 units in March 2020, as compared to the same period last year.
According to data released by the Pakistan Automotive Manufacturers Association (PAMA), passenger car sales in the cumulative period (July-March, FY20) dropped by 46.8pc to 85,330 units, compared to 160,359 units sold during the corresponding period last year.
With an exception to Suzuki Alto, which was not available in March last year, all variants of four-wheelers and above recorded a decline in sales.