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Karachi, The Korangi Association of Trade and Industry (KATI) has officially congratulated Prime Minister Shehbaz Sharif and Chief Minister Murad Ali Shah on their recent appointments, expressing hope and anticipation for the new government’s tenure. KATI’s leadership, including its President, Deputy Patron-in-Chief, Senior Vice President, Vice President, and Executive Council members, has highlighted the urgent need for the government to tackle the prevailing economic issues facing Pakistan.
According to Korangi Association of Trade and Industry, KATI leaders have pointed out critical economic challenges that require immediate attention from the newly elected government. Among the primary concerns are the rising costs of production, exacerbated by recent increases in electricity, gas, and energy prices. These factors pose significant hurdles for the industry and demand prompt action from the government to alleviate the burdens faced by industrialists.
Moreover, KATI has voiced concerns over the escalating port charges levied by shipping companies, which represent a considerable obstacle for the country’s exporters. The association has urged the government to engage directly with industrialists and stakeholders in a timely manner to discuss these issues. The goal is to develop and implement a strategy that effectively addresses and resolves the economic challenges, with a particular focus on reducing production costs and port charges.
The message from KATI to the new government is clear: there is a pressing need for decisive and swift measures to navigate the economic crisis. The business community’s expectations are high, and there is optimism that the government will take the necessary steps to ensure economic stability and growth.
Karachi, Indus Motor Company Limited (INDU) recently shared insights into its financial performance and strategic direction during its 1HFY24 analyst briefing. The company reported a notable increase in profit after tax (PAT), rising to PKR 5.0 billion from PKR 2.6 billion in the same period last year, thanks to improved gross margins. However, sales volumes saw a 61% annual decline, attributed to a combination of factors including increased prices, higher taxes, elevated interest rates, and the growing import of used cars.
According to AKD Securities Limited, management pinpointed several challenges affecting demand, such as the significant rise in used car imports following the lapse of regulatory duties in March 2023. Despite these hurdles, the company has not faced issues with letter of credit clearances recently, and the brief plant closure was linked to a one-off supply chain disruption due to shipment delays.
The briefing highlighted the successful launch of the Corolla Cross in December 2023, with order intake surpassing expectations and projected monthly sales volumes of 600-1,000 units. Management also disclosed localization rates for their vehicles, noting investments of PKR 3 billion approved by the Board of Directors to enhance localization further.
INDU is exploring export opportunities, including leather products, completely built units (CBU) to African countries, and service parts, as part of its long-term strategy. The company is also assessing the impact of a recent government order increasing the goods and services tax on cars valued over PKR 4 million, which affects certain Yaris variants.
Despite the variance in gross margins compared to new market entrants due to duty protection incentives, management anticipates a level playing field once these incentives expire. However, the near-term outlook remains cautious, with expectations of continued challenges in 2024 and 2025 due to high-interest rates and declining purchasing power, suggesting a gradual recovery in volumes.
The post KATI Calls on New Government to Prioritize Economic ChallengesIndus Motor Sees Profit Surge Amid Challenges, Plans for Localization and Exports appeared first on Pakistan Business News.