KARACHI: Indus Motor Company (INDU) reported improved financial results for FY25, even as auto sales slow due to floods and market disruptions.
The company’s gross margin rose to 14.5 percent from 12.7 percent in FY24. Management attributed the increase to lower input costs, favorable exchange rates, cost optimization, and higher localization. Returns from deposits and investments also supported overall profitability.
The Yaris facelift, launched in July 2024, contributed positively to earnings. However, management noted that recent floods have slowed auto sales, and the full impact may be felt over the next three to four months. Without these disruptions, the total car market — including used imports — was projected to exceed 300,000 units, but FY25 actual sales reached 223,799 units.
Despite challenges, the overall auto market grew 40 percent, driven largely by Completely Knocked Down (CKD) units. New CKD volumes rose 49 percent year-on-year to 179,424 units. Toyota sales also increased sharply, from 20,775 units in FY24 to 33,393 units in FY25, marking a 61 percent rise.
In the used imported car segment, 42,125 units were brought in, a 9 percent increase from the previous year. Management expressed concern about the National Tariff Policy, which aims to standardize tariffs at 15 percent over five years. They warned this could widen the cost gap between CKD and completely built-up (CBU) units, possibly encouraging more imports. Discussions with the government are ongoing.
Localization remains a priority for Indus Motor. The passenger car segment, including Corolla, Yaris, and Cross, achieved over 60 percent localization. The IMV segment, including Toyota Hilux, reached 40–45 percent, reflecting volume differences.
Market trends show a shift from sedans to SUVs, especially in the C, D, and E segments. Indus Motor is also negotiating with its parent company for new model launches and expects to navigate rising competition effectively.
While auto sales slow temporarily, management expects overall volumes to increase, even if some players lose market share. Globally, Daihatsu has reduced operations to three locations, a strategy that remains unchanged, according to company officials.
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