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18<br />
Automobile <strong>Indus</strong>try<br />
In 2006-07, the local automotive industry for the fifth year running made an impressive<br />
contribution towards the economic growth of the country. The market for locally assembled<br />
passenger cars and light commercial vehicles grew by 9% to 204,212 units compared to<br />
187,436 units sold in 2005-06. Continued import of used cars and rise in interest rates<br />
restricted the growth rate compared to earlier years.<br />
Positive impact of production increase by auto industry *<br />
● Investment in the auto sector has risen to Rs 98 billion<br />
● Direct employment is now 192,000 people<br />
● Indigenization of auto parts has reached high levels, as the local engineering industry<br />
develops with more and more technology transfer<br />
● Auto industry contributed Rs 63 billion to the government exchequer<br />
● Saved the country Rs 22 billion in foreign exchange<br />
* Daily Times, February 2, 2007<br />
ECC (Economic Co-ordination Committee), Govt. Of Pakistan
Used Vehicles<br />
Increase in local production to meet market demand and restriction on import of used vehicles that are more<br />
than 5 years old led to a decline in used vehicle imports to 28,493 units compared to 46,278 units in 2005-06.<br />
These imports are still 14% of the domestic passenger car and LCV production and continue to impede growth<br />
of the local auto industry.<br />
Vehicle Imports<br />
In the 2007-08 budget, the government had<br />
announced a restriction on the age of imported used<br />
vehicles, disallowing imports of vehicles older than 3<br />
years. This is a welcome step. However, this restriction<br />
has been waived till August 31, 2007 and vehicles<br />
older than 3 years continue to find their way into the<br />
Pakistani market.<br />
In addition, the depreciation rate of 2% per month<br />
amounting to 50% in two years, creates a further<br />
anomaly as locally produced cars are allowed a<br />
depreciation of only 15% per year. Compared to India,<br />
Thailand and other countries in the region, our policies<br />
for used car imports through Personal Baggage Rules<br />
are quite liberal besides being prone to misuse.<br />
The Engineering Development Board, in consultation with the industry, has finalized a long term policy<br />
framework for the auto industry. This policy set out tariffs for CBUs, CKDs, and components looking forward six<br />
years. This is a very welcome development and we commend the GOP for putting in place an environment that<br />
is forward looking and provides the much needed framework in which the industry can confidently invest for the<br />
future.<br />
Company Review<br />
The Company is pleased to report that 2006-07 was another record year. Significant milestones were achieved.<br />
Your company crossed production of 250,000 units since its inception. We achieved over 50,000 units of sales<br />
during the year. Our dealership network expanded from 25 to 29 dealers. In Product Quality and Safety, we<br />
improved upon previous benchmarks.<br />
Sales<br />
Sales of locally manufactured vehicles and CBU variants for the year ended June 30, 2007 were 50,557 units,<br />
compared to 42,406 units last year, up by 19%.<br />
<strong>Toyota</strong> Corolla out-performed its competition and established a market segment leadership position in Pakistan<br />
with 59% market share in the year 2006-07.<br />
CKD Passenger Car Small-High Segment<br />
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20<br />
Daihatsu Cuore increased its share to 26% in 2006-07 from 18% last year in the economy car segment that<br />
continues to show impressive growth.<br />
CKD Passenger Car Economy Segment<br />
The New Generation Camry introduced in the beginning of 2006-07 fiscal year showed impressive<br />
performance. It increased its share from 16% last year, to 54% by June 2007, in its segment.<br />
New CBU Passenger Car - Luxury Segment<br />
In the new SUV category, we increased our market share from 62% to 88% this year, with increased focus on<br />
fleet customers who are secure in the reliable performance, durability and after sales service and product<br />
support capability of <strong>Indus</strong>.<br />
New SUV (Land Cruiser/Prado)
Our Hiace and Hilux increased market share from an already impressive 63% last year to a market dominant<br />
position of 84% this year.<br />
Preparations are underway to commence manufacture of the New Generation Hilux in Pakistan in late 2007.<br />
This new generation model, which is featured in our Annual Report, has performed exceptionally well<br />
throughout the world and is both powerful and stylish. It is a quantum upgrade over the previous model.<br />
Sales Revenue, Profit<br />
Sales revenues for the year 2006-07 increased by 11% to a record Rs 39 billion, compared to Rs 35 billion<br />
achieved last year. Achievement of higher sales volumes, efficient operations and favorable foreign exchange<br />
rates contributed to the overall earnings and enabled the Company to absorb cost push inflationary pressures<br />
emanating from high fuel prices in order to provide maximum value and relief to our customers. The Company<br />
posted a record profit before tax of Rs 4.2 billion, up 3.8% compared to Rs 4.1 billion achieved last year.<br />
Dividend<br />
New CBU 1 Ton CV (Van and Pickup) Segment<br />
The Company's Return on Equity for the year was 34.1% (2005-06 of 42.3%) while Earnings per Share rose<br />
3.7% to Rs 34.9 and Shareholders Equity was up 28.5% to Rs 8 billion. A final payment of Rs 8 per share has<br />
been proposed to shareholders, making the total payment for the year of Rs 13 per share, a 8.3% increase<br />
compared to the Dividend payment in 2006. An amount of Rs 1,723.9 million is recommended for appropriation<br />
to the General Reserves which will be utilized for continuing growth and capacity expansion.<br />
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Visits by <strong>Toyota</strong> Senior Management<br />
Mr Akio Toyoda, EVP, <strong>Toyota</strong> Motor Corporation<br />
It was a matter of great honor and pride for us that Mr Akio Toyoda, the grandson of "<strong>Toyota</strong>'s founder" and the<br />
Executive Vice President, <strong>Toyota</strong> Motor Corporation, Japan visited <strong>Indus</strong> Motor Company on November 10,<br />
2006. He was given a rousing welcome by our senior management followed by a tour of the plant and facilities,<br />
where he was briefed on the manufacturing processes.The performance and milestones achieved by IMC were<br />
highlighted during a presentation.<br />
Mr Akio Toyoda, EVP, <strong>Toyota</strong> Motor Corporation visits IMC<br />
Toyoda San praised IMC's performance and<br />
congratulated the Company on increasing its<br />
production capacity nearly four times in the last four<br />
years to meet the tremendous demand of its vehicles.<br />
He also commented on the growth of the automobile<br />
market, "I am optimistic about Pakistan's Automobile<br />
<strong>Indus</strong>try which has developed substantially in recent<br />
years and I anticipate that it will continue to grow in the<br />
future."<br />
Mr Akio Toyoda also inaugurated the modern, state of<br />
the art <strong>Toyota</strong> Gymnasium at Habib Public School, Mr Akio Toyoda being briefed in Obeya Room<br />
Karachi. At the ceremony he stated, "I am delighted to<br />
visit Pakistan again and feel honored to launch this sports facility. <strong>Toyota</strong> Motor Corporation is proud to be<br />
associated with the House of<br />
Habib in not only making a<br />
contribution to Pakistan's<br />
automobile sector but also<br />
being part of community<br />
service as a good corporate<br />
citizen". Mr Akio Toyoda is a<br />
former national field hockey<br />
player of Japan and has<br />
played international hockey<br />
matches in Pakistan in his<br />
youth!<br />
Mr Akio Toyoda inaugurating the <strong>Toyota</strong> Gymnasium
<strong>Toyota</strong> Gymnasium Inauguration Ceremony<br />
Mr Junzo Shimizu, President, <strong>Toyota</strong> Tsusho Corporation<br />
We were also honored to welcome Mr Junzo Shimizu, President, <strong>Toyota</strong> Tsusho Corporation to <strong>Indus</strong> Motor<br />
Company on May 3, 2007. Following a detailed plant visit and presentation, Shimizu San praised <strong>Indus</strong>'s record<br />
breaking sales and presented the Vehicle Sales Record Award to <strong>Indus</strong> and congratulated the <strong>Indus</strong> Team in<br />
Mr Junzo Shimizu, President, <strong>Toyota</strong> Tsusho Corporation, presenting the Vehicle Sales Record Award<br />
to Mr Parvez Ghias, CEO, <strong>Indus</strong> Motor Company<br />
increasing production capacity to over 50,000 units per year. Expressing optimism on Pakistan's auto market,<br />
Shimizu San mentioned that the Company will continue to expand capacity by enhancing investment in the<br />
current plant as well as consider setting up an additional plant. He noted that the automobile industry has a key<br />
role to play in increasing employment and transfer of technology and is the major contributor in the growth of<br />
the engineering sector in Pakistan.<br />
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Mr Junzo Shimizu, President, <strong>Toyota</strong> Tsusho Corporation during plant visit<br />
<strong>Toyota</strong> Awards for <strong>Indus</strong> Motor Company<br />
During the year, <strong>Toyota</strong> Motor Corporation conferred recognition<br />
awards to <strong>Indus</strong> Motor for our outstanding achievements.<br />
These awards were presented by Mr Katsuaki Watanabe,<br />
President, <strong>Toyota</strong> Motor Corporation to Chairman IMC.<br />
<strong>Toyota</strong> Marketing Award 2006 (Overall)<br />
Customer Service Prize<br />
for Achievement 2006<br />
<strong>Toyota</strong> Marketing Award for Excellence<br />
2006 (Vehicles)
Marketing<br />
This year marked another milestone for <strong>Indus</strong><br />
Motor Company with record sales of 50,557 units in<br />
a fiscal year.<br />
The 50,000th invoice<br />
was generated by<br />
IMC dealers and<br />
Chairman pressing a<br />
button. This invoice was signed by one of the pioneers<br />
of our Company, Mr Ayaz A Siddiqui who was retiring<br />
the same day.<br />
Corolla continues to dominate as the market leader in its segment, and overall, it is the second largest volume<br />
seller in the country amongst all passenger cars. Corolla's popular 1.3 XLi, the powerful, fuel efficient 2.0<br />
Diesel, and the high performance ALTIS have made Corolla the highest selling brand in the 1300-2000 cc car<br />
segment.<br />
Corolla Diesel, the only diesel sedan in Pakistan, is an extremely popular car liked by rural as well as urban<br />
customers. Responding to customer feedback, a new variant, the Corolla 2.0D SE was launched in early 2007.<br />
This variant is a mid-level entry in the Diesel Corolla lineup and comes with a wooden trim, CD Player, rear<br />
headrests, power windows and power locks as standard options. Concurrent with this introduction, we also<br />
increased our production, so that Corolla Diesel delivery times reduce further. Compared to the inconvenience<br />
of frequent CNG refueling, Corolla Diesel is preferred by customers who are looking for both luxury with<br />
economy and fueling convenience.<br />
With its powerful, yet efficient 1.8 VVTI engine, <strong>Toyota</strong> ALTIS has established itself as the car of choice for<br />
customers who desire top features and specs with solid drive and superior performance.<br />
Cuore, giving the promise of quality, durability and reliability to its customers, has grown from strength to<br />
strength, capturing a sizable share of the economy car segment. It is recognized as the small car with an<br />
excellent drive, comfort, performance and resale. To add greater luxury to this popular car, known for its<br />
comfortable ride and acceleration, an MP3 audio player has been offered in its Automatic variant, providing<br />
more pleasure in driving. Cuore is the only automatic car amongst small cars.<br />
Our <strong>Toyota</strong> Camry has scripted its own success story. Launched in mid-2006, this luxury car has overtaken<br />
people's imagination and has become the dominant brand in its segment.<br />
IMC participated in the AUTO ASIA<br />
2007 held at the Expo Centre by a<br />
display of our product range including a<br />
concept car, CS&S (Compact Sports &<br />
Specialty) car which was especially<br />
brought to Pakistan for showcasing the<br />
technological advancement and<br />
commitment of <strong>Toyota</strong> to Pakistan's car<br />
enthusiasts<br />
Group photograph at the<br />
50,000 units sales ceremony<br />
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26<br />
Parts<br />
Another milestone achieved during the year 2006-07 was our Spare Parts business, where sales for the first<br />
time crossed the One-Billion Rupee mark.<br />
IMC is the only automobile company in Pakistan to achieve this milestone. We achieved 27% growth in the after<br />
sales parts business compared to 2005-06, through aggressive marketing and increasing customer awareness<br />
to use genuine parts for reliability and performance.<br />
Annual After Sales Kaizen<br />
Marathon was held jointly by<br />
IMC’s Service and Parts<br />
departments
Dealerships<br />
Mr Yasuhiko Yokoi, Managing Officer, <strong>Toyota</strong> Motor Corporation and Mr Ali S. Habib, Chairman<br />
<strong>Indus</strong> Motor Company present the overall Nationwide Best Dealership Performance Award to<br />
<strong>Toyota</strong> Faisalabad Motors during the 16th Annual Dealer Conference<br />
Kenya Trip - Our Dealer principals visited Kenya on their annual trip, mixing business with pleasure!<br />
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Turkey Trip - Dealership and IMC staff on another trip to Istanbul which they enjoyed very much<br />
Dealership Network Expansion<br />
With increasing motorization, our auto market is expanding and <strong>Indus</strong> wants to continue to play a lead role.<br />
Apart from introducing new products and auto solutions, we are enhancing the spatial presence of our<br />
dealership network. During the year, four new 3S dealerships were added to our network in the cities of Sialkot,<br />
Hyderabad, Rahim Yar Khan and Gujranwala. Besides these, all our existing dealerships are undergoing major<br />
renovations and upgrade to offer customers and their families a friendly environment to conduct sales and<br />
service business. We want our customers to have the best possible auto buying and ownership experience.<br />
New Dealerships Signing Ceremony - (seated from left to right) Mr Zahid Jamil, CEO, <strong>Toyota</strong> Rahim<br />
Yar Khan Motors, Mr Mohammad Ashraf, Chairman, <strong>Toyota</strong> Sialkot City Motors, and Mr Mohammad<br />
Shoaib, CEO, <strong>Toyota</strong> Hyderabad Motors with IMC’s top management and Marketing Team
New Dealerships’ inauguration<br />
<strong>Toyota</strong> Gujranwala Motors (Gujranwala)<br />
Mr Abdullah Yousuf, Chairman CBR inaugurating <strong>Toyota</strong> Gujranwala Motors<br />
<strong>Toyota</strong> Royal Motors (Rahim Yar Khan)<br />
<strong>Toyota</strong> Hyderabad Motors (Hyderabad)<br />
<strong>Toyota</strong> Sialkot City Motors (Sialkot)<br />
Mr Ali S. Habib, Chairman IMC inaugurating <strong>Toyota</strong> Royal Motors<br />
Mr Yutaka Arae, Vice Chairman IMC inaugurating <strong>Toyota</strong> Hyderabad Motors<br />
Mr Ali S. Habib, Chairman IMC inaugurating <strong>Toyota</strong> Sialkot City Motors<br />
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30<br />
Service<br />
IMC has embarked on the development of an Express Maintenance Program with the assistance of <strong>Toyota</strong><br />
Motor Corporation, for both increased service capacity at our dealerships as well as enhanced convenience for<br />
our customers. This program, based on <strong>Toyota</strong> Production System provides for prompt maintenance of vehicles<br />
and has strong customer appeal for speedy delivery of service vehicles with attention to quality detail.<br />
There is a strong emphasis on After Sales Service at <strong>Indus</strong> and its dealerships. Our Service and Parts<br />
Departments jointly organized the After Sales Kaizen Marathon on 20-21 February, 2007. This event was an<br />
opportunity for dealers to share the best Kaizen practices implemented during the year at their dealerships<br />
leading to improved performance.<br />
After Sales Kaizen Award being presented to <strong>Toyota</strong> Islamabad Motors
To enhance the skill level of Service staff, our Service Department conducted a National Skill Contest for<br />
Service Advisors, General Technicians and Paint Technicians of our dealership network. This contest was held<br />
at the dealership level and regional level.<br />
Every year, our Service Department conducts T-TEP (<strong>Toyota</strong> Technical Education Program) Career Days at<br />
the Govt. College of Technology, Lahore and St. Patrick's Technical Institute, Karachi.T-TEP, which is sponsored<br />
by <strong>Indus</strong> Motor Company with the assistance of <strong>Toyota</strong> Motor Corporation, is a comprehensive three years<br />
automobile diploma training program where students receive practical advanced training in the latest<br />
automobile technology that enables them to find career opportunities upon graduation.<br />
Jishuken is a self learning process<br />
based on the Japanese concept of<br />
'Genchi Genbutsu', and is conducted<br />
regularly by our Service Department. It<br />
engages the service staff of our<br />
different dealerships to physically visit<br />
the model dealership as one team to<br />
verify and authenticate the Kaizen<br />
activity.<br />
The award winners and IMC team at the National Skill Contest<br />
A memento being presented to the Chief<br />
Guest, Capt. M Khurram Agha, Additional<br />
Secretary, Government of Punjab<br />
T-TEP students being trained on various<br />
automotive components<br />
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Customer Relations<br />
During the year, the CR team focused on putting in place customer-friendly policies<br />
and procedures at <strong>Indus</strong> and its 3S dealerships to achieve quick turnaround on<br />
customer inquiries and complaints to maximize Customer Satisfaction.<br />
Our vision in CR, as per <strong>Toyota</strong>'s CR Activity Ideals, is to create corporate<br />
trust based on integrity and fair handling of Inquiries and Complaints by:<br />
● Opening a larger window for customers<br />
● Handling Inquiries and Complaints swiftly and surely<br />
● Making the "Voice of the Customer" the basis for corporate renewal, and<br />
● Improving our corporate image and educating customers to support Sales and<br />
Service activities<br />
In living up to this vision, we hope to achieve our long-term goal of becoming # 1 in Customer Satisfaction in<br />
Pakistan by implementing CR strategies and policies that will motivate CR staff to perform at increasingly higher<br />
standards.<br />
Our Complaint Handling Procedure provides clear guidelines on how to achieve swift resolution of customer<br />
complaints. Co-ordination with key departments at the plant and dealerships helps improve teamwork and instill<br />
a customer focus that is quickly cascading throughout the Company and our Dealer network.<br />
Dealerships’ CR Managers and <strong>Indus</strong> CR Team at the Quarterly CR Workshop held at Swat
<strong>Toyota</strong>. Since then, VOC has been implemented successfully at <strong>Indus</strong> and all 29 dealerships. It is used to<br />
record, classify and analyse inquiries and complaints. Customer feedback is regularly studied by senior<br />
management at <strong>Indus</strong> and our dealerships for continuous improvement.<br />
The CR Performance Criteria and individual dealer Action Plans identify minimum operating standards for<br />
CR. Relevant, transparent and measurable, this performance management tool allows us to evaluate progress,<br />
identify performance gaps and provide feedback to management regularly.<br />
This year, for the first time ever, the top-performing Dealership CR Managers, who achieved their CR<br />
performance target of 80%, earned themselves an opportunity to visit <strong>Toyota</strong> Lanka, Colombo to undertake<br />
Genchi Genbutsu and see first-hand the CR practices, processes and systems adopted by a leading<br />
distributor and dealership in the region.<br />
To reinforce our commitment to developing our people, CR regularly undertakes Training in Customer<br />
Handling Skills and conducts Quarterly Workshops to keep a continuous dialogue with our dealership CR<br />
teams. By doing so, we wish to bring about positive change in their knowledge, skills and behaviours and<br />
improve the customer experience in their every interaction with us.<br />
To promote visible demonstration of Customer First policies among our customers, CR staff at our Dealerships<br />
conduct Free First Service and Regular Maintenance follow-ups and solicit Post-Service feedback to not<br />
only highlight CR in a positive way, but also to build long-term relationships with customers while promoting<br />
customer retention and loyalty.<br />
At <strong>Indus</strong>, we introduce CR to our customers each time a car leaves our plant. A CR introduction letter with<br />
contact details of our CR team is placed in every vehicle to encourage customers to call or write to us with any<br />
complaints, inquiries or suggestions they may have.<br />
Another way we engage customers is through the quarterly Customer Satisfaction Index and Product<br />
Quality Surveys that is conducted through an independent research agency. More than 2500 customers are<br />
randomly selected to provide feedback on the quality of our products as well as the quality of the Sales and<br />
Service that they experience at our dealerships.<br />
With the above initiatives already in place, CR has progressed in leaps and bounds in the last one year. This<br />
is clearly evident from the numerous acknowledgements and appreciation letters that we receive from satisfied<br />
customers.<br />
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Operations<br />
While your Company has continuously increased production to meet the growing demand for the products, our<br />
capacity now is at an all time high of 200 cars/day or 53,000 cars/year. We have undertaken several measures<br />
to further enhance our engineering capability, production quality, standardization of work processes, safety, skill<br />
development of team members, etc.<br />
For the first time in the history of IMC, M-Type Jig has been installed for Hilux production which is used in the<br />
weld shop for assembly of the main body. This advanced jig has the flexibility of handling the main body of all<br />
future IMV models.<br />
As in other <strong>Toyota</strong> companies, KI-J activity has been initiated at IMC to further enhance the quality of product<br />
while maintaining a safe working environment. KI-J stands for Kaizen Initiatives through Jiritsuka. Jiritsuka is a<br />
Japanese concept that means self-reliance. KI-J involves hazards identification, visualization and fixing<br />
problems on a priority basis. The basic concept of KI-J is to visualize and share weaknesses globally, by setting<br />
common targets voluntarily, considering capability and built-in-quality and achieving these targets through team<br />
work and cross functional support.<br />
In order to achieve the desired targets results, training and awareness sessions were conducted to enhance<br />
the capabilities of our members in the areas of Quality, Safety and Standardized Work, as these areas ensure<br />
Built-in-Quality. A total of 550 man hours training was provided to staff. Furthermore, to enhance Safety at plantsite,<br />
several display and message boards were installed at prominent locations to create greater awareness<br />
Quality Audit by <strong>Toyota</strong> experts
through visualization. The activity has also enabled team members to identify hazard points and take<br />
appropriate countermeasures to create a safer working environment in the plant.<br />
A group photograph of Asia Pacific Skill Contest at APGPC. IMC secured the Gold Medal in Paint<br />
(Team Leader) category and the Bronze Medal in Inspection (Team Member) category.<br />
The quality of our products is<br />
directly related to the skill level of<br />
our Team Members and<br />
supervisory staff. Therefore, there<br />
are on-going and continuous multi<br />
skill development programs. The<br />
skill level of our workforce is quite<br />
high. We took part for the first time<br />
and excelled in the Asia Pacific<br />
Skill Contest at APGPC (Asia<br />
Pacific Global Production<br />
Centre), Thailand.<br />
During the year, the Company<br />
started the environment friendly<br />
Co-generation Power Plant. This<br />
facility will help in reduction of<br />
carbon dioxide emissions through<br />
the use of natural gas to operate<br />
engines and turbines.<br />
Co-generation Power Plant<br />
Abdul Riaz (Team Leader of Paint shop) receives Gold Medal and<br />
Award from Mr R Sasaki, President TMAP-EM. Abdul Riaz will<br />
also honor IMC by representing Asia in the Global Skill Contest to<br />
be held in TMC, Japan later this year.<br />
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As part of our on-going plant expansion, several<br />
other projects are also being implemented.<br />
These include a new Jig Shop for making jigs for<br />
future models, extensions to our CKD<br />
Warehouse and CBU yard, a new Skill Training<br />
Centre to develop world-class, quality-conscious<br />
team members as well as expansion and<br />
upgrading of our Canteen Block to cater to the<br />
increasing members of our workforce.<br />
Continuous improvement is a process that is<br />
New Jig Shop<br />
pursued, both at <strong>Indus</strong> and at its business<br />
partners. We work very closely with our vendors<br />
and hold Vendor Workshops regionally in Karachi and Lahore. These workshops discuss in detail the<br />
Production Plan and Quality and Delivery performance against predetermined targets. This open and useful<br />
interaction with our vendors has played a major role in enhancing the performance of our Product Development<br />
Department.<br />
Mr Shinichi Yasui, Chief Engineer, <strong>Toyota</strong> Motor Corporation, Japan, Chief<br />
Guest at the Annual Vendor Convention receiving a memento from<br />
Chairman, IMC<br />
The Annual Vendor<br />
Convention, with the<br />
theme "Go See the<br />
World", was held in<br />
December, 2006 at<br />
Karachi, with the purpose of<br />
highlighting the annual<br />
achievements and activities<br />
carried out during the year<br />
in parts localization and skill<br />
improvement. Automobile<br />
vendors from all over the<br />
country, representatives of<br />
<strong>Toyota</strong> and Daihatsu from<br />
Japan, and the <strong>Indus</strong> team<br />
were present.<br />
In order to enhance our<br />
learning from global<br />
practices, our Product<br />
Development department<br />
organized study visits to<br />
vendors in Thailand and<br />
Indonesia during 2006 and 2007. The purpose of these visits was to support our local vendors in improving<br />
their production, quality systems, tool/checking fixtures designing and development. The visits also helped in<br />
learning the best practices of foreign parts manufacturers by understanding the implementation of 5S, Genchi<br />
Genbutsu, and Visual Management Systems.<br />
IMC vendors in Indonesia during study tour
Human Resource Development<br />
<strong>Indus</strong> continued its thrust for fast paced employee and organization development programs consistent with its<br />
present business needs and future growth plans. Meaningful upgrades were implemented in all key areas of<br />
Human Resource Management and Organization Development to keep the processes current and aligned to<br />
the best in the industry. Several initiatives materialized with full participation and support of line management.<br />
Human Resource Department<br />
During 2006-07, training at 112,000 man-hours was up 13% compared to the same period last year. On a<br />
cumulative basis, <strong>Indus</strong> has completed around one million man-hours training since inception.<br />
The trainings targeted technical skills as well as soft side competencies. On the infrastructure side, in addition<br />
to the existing facilities, construction of an impressive Technical Training Building was undertaken. It is designed<br />
to boost core and multi-skills trainings and refreshers for the production staff. The project is planned for<br />
completion in September 2007.<br />
The Apprenticeship Training Program continued to be pursued aggressively. Around 400 apprentices were<br />
inducted during the year and given quality class room and on-the-job training.<br />
IMC participated in the TMC Global Employee<br />
Morale survey which covered all regional affiliates.<br />
The survey results were encouraging in terms of<br />
employee satisfaction, commitment and pride in the<br />
brand. Interactive sessions with diverse employee<br />
groups were held after the survey to work towards<br />
continuous improvements. The <strong>Indus</strong> top team<br />
participated in these sessions.<br />
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<strong>Indus</strong> has excellent labor-management relations. The Collective Labor Agreement due for negotiations in<br />
April 2007 was successfully concluded. Negotiations were held in a very cordial and professional environment.<br />
The new agreement covers twenty four months period up to March 30, 2009.<br />
Zulfiqar Ahmed, General Secretary of <strong>Indus</strong> People<br />
Workers Union and Tariq Quddusi Sr. GM Technical<br />
sign the Collective Labor Agreement<br />
The Company instituted its Hajj Policy for the team<br />
members. Two lucky team members, Salman<br />
Ansari from PPMC and Noman-ul-Haq from<br />
Assembly Shop were selected through balloting.<br />
The traditional IMC Family Day was organized with its usual enthusiasm and excitement at the PAF<br />
Museum lawns. Over 3600 employees and their family members attended this event. The occasion was<br />
also used to recognize employees with the Best Attendance Award.
Corporate Social Responsibility<br />
Our slogan, "Concern Beyond Cars", reflects what we really are. We are not just a Company that makes cars.<br />
We go beyond. While doing our utmost to satisfy customers, as a good corporate citizen, we also serve in many<br />
areas of Pakistani society. The Company sets aside 1% of profit before tax for social projects and contributions.<br />
People from several villages get relief goods and medical treatment<br />
We are amongst the first to respond when natural calamities affect our beloved country. In the recent floods<br />
that hit Balochistan and Sindh after cyclone "Yemyin", we immediately responded by not only donating dry<br />
food rations for airlift to Balochistan, but as after the earthquake of Oct 8, 2005, we also conducted relief<br />
operations working with an NGO, HOPE, in interior Sindh and set up a medical camp treating over 1000<br />
patients and providing food and temporary shelter to 100 families.<br />
Your Company provides 50 Scholarships each year<br />
to deserving, under privileged students and assists<br />
over two dozen schools and educational institutions.<br />
This year, construction of the TCF - <strong>Indus</strong> Motor<br />
Company Campus II School Complex at Deh<br />
Mehrani near Hyderabad was completed. In the first<br />
phase, the project has started a Primary School that is<br />
currently providing education to over 360 students<br />
from rural villages in the vicinity. The project is planned<br />
to expand to Secondary Level in the near future.<br />
In November 2006, a state-of-the-art gymnasiumcum-auditorium<br />
was inaugurated at the Habib Public<br />
School. This facility, which was constructed with the<br />
assistance of IMC and <strong>Toyota</strong> Motor Corporation, is<br />
used by Habib Public School for its own events as well<br />
as for inter-school tournaments and extra curricular<br />
Activities.<br />
School at Deh Mehrani, near Hyderabad<br />
At <strong>Indus</strong>, we run a very successful Apprenticeship Program that has done over 400,000 man-hours of training<br />
since inception. We provide internships in different departments of the Company to engineering, business,<br />
accounts and IT students of various universities from within and outside Pakistan.<br />
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In continuation of our commitment<br />
towards spreading technology, we<br />
have started an All Pakistan<br />
Engineering Students Design<br />
Competition in which engineering<br />
students from different universities<br />
will work on real engineering<br />
problems and design technical<br />
solutions, particularly in the area of<br />
robotics.<br />
As a leading Company in the auto<br />
sector, we have taken several Engineering students participate in the Design Competition at IMC<br />
initiatives to try to improve Road<br />
Safety. Our Road Traffic Injury Research Project with JPMC and NED for evaluating the nature, location and<br />
magnitude of traffic injuries in Karachi has generated invaluable data that is very useful for traffic police, road<br />
designers, hospitals, road users, etc.<br />
The Road Traffic Injury Research Project Team collecting data from road accident victims and<br />
entering into the database<br />
In order to promote road safety amongst school children, your Company, in partnership with WWF and Family<br />
Educational Services Foundation (FESF) conducted an extensive <strong>Toyota</strong> Road Safety Campaign targeting<br />
around 25,000 children in nearly 100 schools.<br />
<strong>Toyota</strong> Road Safety Walk in which about 1500 school children, their parents, NGOs, the <strong>Indus</strong><br />
Team and other safety conscious citizens participated
During the UN Global Road Safety Week (April 23~29, 2007) as a member of United Nations Global<br />
Compact, we also undertook a number of other activities. These included the 1st National Road Safety<br />
Conference which was organized with the help of Sindh Education Foundation on April 24, 2007. With<br />
participation of about 500 people, the conference aimed at initiating a dialogue with different stakeholders on<br />
road safety issues and developing<br />
recommendations through five working<br />
sessions on Corporate Sector,<br />
Engineering Sector, Health Sector,<br />
Education Sector and Road Traffic<br />
System.<br />
Chief Guest, Mr Salahuddin Haider, Advisor Information,<br />
Government of Sindh addressing the final session of the<br />
National Auto Journalists Workshop<br />
To encourage auto journalism in<br />
Pakistan and to develop<br />
professionalism and capacity building<br />
in the field of Auto Journalism, we held<br />
Pakistan's First National Auto<br />
Journalists Workshop on May 29,<br />
2007. The workshop was conducted by<br />
an international expert on Auto<br />
Journalism. We announced the launch<br />
of the National Auto Journalists Annual<br />
Award at the event.<br />
IMC is a major promoter of sports and during the year sponsored a number of sporting events across Pakistan.<br />
The Prime Minister presenting the key of a <strong>Toyota</strong> Corolla to the winner of Hole-in-One at the<br />
Pakistan Open Golf Championship<br />
Mr Jahangir Khan Tareen, Minister of <strong>Indus</strong>tries, Production and Special Initiatives with the winning team<br />
at <strong>Toyota</strong> Polo Cup, Lahore<br />
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During the year, altogether, we welcomed over a thousand visitors including senior management from TMC,<br />
TTC and DMC, shareholders, customers, delegations from government organizations, educational institutions,<br />
engineering companies, defense organizations, shareholders, financial analysts, press and media, regulatory<br />
departments, banks, associations and trade bodies, companies from the private sector, etc.<br />
Mr Choudhry Amir Hussain (Speaker National Assembly) does a plant tour<br />
Dr Ashfaq Hassan Khan (Economic Advisor to Prime Minister) observes our manufacturing processes<br />
Mr Arif Nizami, Editor of The Nation during<br />
the plant visit<br />
In recognition of the efforts to protect the<br />
environment, IMC received the Environment<br />
Excellence Award for the fourth consecutive<br />
year. Mr M. Mohiyuddin, Sr GM, QA & SHE<br />
receiving the award.
Mr Parvez Ghias, CEO, <strong>Indus</strong> Motor Company receiving the PCP Award for the 3rd Largest<br />
Corporate Donor in Pakistan, from Mr Shaukat Aziz, Prime Minister of Pakistan<br />
In appreciation of its CSR initiatives, <strong>Indus</strong> Motor received the Pakistan Centre for Philanthropy (PCP)<br />
Award for the third largest donor in Pakistan. The Award was presented by the Prime Minister.<br />
Mr Saeed Jung, Director LAC receiving the<br />
CSR Award from Mr Mian Muhammad<br />
Soomro, Chairman Senate<br />
Corporate Excellence Award in Engineering<br />
& Allied Sector from MAP<br />
<strong>Indus</strong> Motor received the First Helpline Trust CSR Award for its "commitment to customers as well as the<br />
community within which it operates". The Management Association of Pakistan presented us a Corporate<br />
Excellence Award in the Engineering and Allied Sector.<br />
In consonance with our Company's vision of being the most respected and successful enterprise, we reaffirm<br />
our commitment to demonstrate responsible corporate conduct in all our activities and operations, and to do<br />
our best to meet societal expectations.<br />
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Future Outlook<br />
The success of any sector is largely dependent upon the economy as well as the policies that govern the sector.<br />
Our country has witnessed economic growth in recent years and we are pleased that this year the Auto <strong>Indus</strong>try<br />
Development Plan has been finalized. This is a positive step which will enhance the confidence of local auto<br />
manufacturers and auto parts assemblers and will encourage further investment, employment and<br />
sustainability of the domestic auto industry.<br />
We are grateful to the government for its efforts to reduce the inflow of used cars into the country by restricting<br />
imports of vehicles older than three years. However, this decision, announced in June 2007 has been<br />
postponed for implementation till September 2007.<br />
There are challenges ahead for us from the perspective of rising interest rates also. For the auto industry and,<br />
indeed for the country to grow, we pray that the political and business environment continues to remain stable.<br />
On our part, we continue to increase capacity to meet the requirements of our customers and will make full<br />
efforts in being competitive in both cost and quality, in delivering maximum value to our customers, and in<br />
working very closely with the industry, our business partners and other stakeholders.<br />
As a member of the UN Global Compact and a Concern Beyond Cars, we will strive to be the most respected<br />
Corporate Citizen and will continue to enhance our social initiatives. Our CSR projects, particularly in the areas<br />
of Road Safety, Education and Health, are making a significant impact.<br />
I thank our Board of Directors and the management team for steering the Company towards another successful<br />
year.<br />
We are grateful to our customers for buying and driving our vehicles. We continue to do our best in providing<br />
them the best designed, most durable and high quality products as well as efficient after sales service.<br />
I would also like to thank our <strong>Indus</strong> Team, our shareholders, our dealers and vendors and business partners.<br />
We bow to Allah and pray for His blessings and guidance.<br />
Ali S. Habib<br />
Chairman