No Layoffs Despite Slowdown: Says IMC

Indus Motor Company (IMC) has announced that there will be no layoff of employees despite slowdown in production

KARACHI, (UrduPoint / Pakistan Point News - 15th Oct, 2019 ) :Indus Motor Company (IMC) has announced that there will be no layoff of employees despite slowdown in production.

IMC has resumed production to 50% capacity from October 1 after a closure over the last 15 days of September, the company spokesperson said here on Tuesday.

"Over a 12-month period, the rupee depreciated over 31.6%. Additionally, imposition of 7% ACD, 3% additional sales tax on all imports and 7.5% FED for vehicles of 2000cc and above. There is also a fresh Federal Excise Duty of 2.5% and 5% FED on locally manufactured vehicles. All this is having an adverse impact on the auto sector and has resulted in a major decline in sales. Of the total cost of a vehicle, 40% comprises the taxes and levies imposed by the government. It is a misconception that the rising rate of tax collection will not affect vehicle sales and total tax collection; in fact, the decline in sales will result in decline in tax collection from the auto sector," he added.

"Yet, we have decided not to go for layoffs despite the hard times. We are absorbing this financial crunch," he said.

A general perception exists in Pakistan that cars assembled locally havegradually become expensive without any value addition. The prices of cars have not increased but have been adjusted according to the depreciation of the Pakistani rupee against the dollar. Prices have, in fact, been reduced by the manufacturers but it seems as if they have increased since the PKR is depreciating in relation to the US Dollar and the customer is paying more in rupee terms.