PACRA Assigns Initial Entity Ratings to Toyota Jinnah Motors (Pvt.) Limited

Car dealership (authorized) rides on the strength of the principal (auto manufacturer/assembler). The stronger the principal in the respective market, higher the standing of the car dealer is. There is a pre-defined set of criteria – qualitative & quantitative – that the principal imposes on the dealer’s network. The rating takes comfort from Toyota Jinnah’s alliance to Indus Motor Company – owned by Habib Group, Toyota Motor Corporation and Toyota Tsusho Corporation. Toyota Jinnah Motors (TJM) operates as 3S car dealership. Toyota Jinnah has built a sustainable position in the competitive industry of Pakistan. The volumes are rising. Toyota Jinnah Motors has captured adequate market share in early year of operations. It is important to sustain the growth while managing the rising competition, which is more of the principal’s domain. Foreign players are also taking interest in the local market. The financial risk profile of Toyota Jinnah Motors is adequate. The company intends not to raise any long term debt borrowing in future.
Going forward, strong growth in auto sector amidst improving macro-economic conditions is expected to result in robust consumer demand. Toyota Jinnah Motors is poised to take full advantage.

The ratings are dependent on the management's ability to sustain its business profile while benefiting from positive demand fundamentals; financial discipline/transparency is crucial. Moreover, strengthening of governance framework is pivotal for any growing business concern.

About the Entity
Toyota Jinnah Motors, incorporated on Jan 17, 2014 as a private limited company and inaugurated its operations on 2nd June 2016. The Company was incorporated to set up 3S authorized dealership (Sales, Service and Parts) of Indus Motor Company Ltd, the partners of Toyota Motor Corporation Japan. The Company is owned by sponsoring family. Mr. Khursheed Ahmad is Chairman and his nephew Mr. Asad Munir is the CEO of the company.