Indus Motors to invest $40 million to increase output by 10,000 units

Indus Motors, makers of Toyota Cars, have decided to expand their existing plant with a capital investment of USD 40 million. The said investment is to help increase the production of vehicles by around 10,000 units per annum.

Indus Motors held a meeting yesterday with a group of analysts from local brokerage houses. The briefing revealed that company’s de-bottlenecking activity which is currently in process has been progressing smoothly. According to management, the company expects the project to be complete in the fourth quarter of current fiscal year.

Following the completion of de-bottlenecking project, it is expected that the company will add roughly 10,000 units to its current stated capacity of 54,800 units.

The company’s senior management expects that the recent drive to weed out buyers who purchase Toyota vehicles to sell them at a profit (own money) should not have any negative impact on demand given the number of genuine buyers for the Auto manufacturer.

Commenting to individual models, the management said that the Fortuner sales are likely to sustain the current momentum forward into near future; considering the fact that the new model has received such an overwhelming response from the customers. Senior Management believes that the growth in Fortuner sales reflects (1) Prado customers opting for Fortuner model due to better perceived feature, and (2) customers typically in the market for Rs. 3.5 million – 4.0 million cars are forking out additional cash for Fortuner.

Meanwhile, the company admits that talks are currently being held to possible replace lower-end Corolla variants, however, the management still awaits confirmation on that front. Moreover, the company said that the sales in Revo double-cabin model are expected to increase as election season nears.

The company has once quashed any claims of introducing a Diahatsu brand vehicle in Pakistan, claiming that the brand has pulled out of most international markets barring Japan, Indonesia and Malaysia.

The company intends to pass on the cost increases emanating from Pak Rupee devaluation against the US$ to the end consumers beyond a certain level, however the management does not believe that volumes will suffer significantly. The reason being the relatively inelastic demand among their chosen market segments.