Karachi, August 27, 2022: The already expected reduction in auto demand in the Financial Year 2023 is likely to be aggravated by the impact of recent flooding.
A drop of 25% YoY in sales volume is already expected during FY23 owing to a host of factors including steep cost led price hikes, rising interest rates and measures taken by the regulators.
Indus Motor Company has a strong customer base in the rural areas (50% of total sales), therefore, the demand for IMC’s vehicles is to be negatively impacted due to erosion of farmer income.
Looking back, floods of FY10/11 took a toll on demand for the company’s vehicles where volumes dropped 3% YoY, vis-à-vis volumes for its peers increasing by 8%-10% YoY during the same time. Crop damage and delay would keep farmer activity to the lowest for the next couple of quarters. This, coupled with lower demand of new tractors and some dent to auto sales, would partially impact HSD and MS sales for some months.