UML hopeful of consistent state policy
United Motors PLC (UML), a company which faced the brunt of frequent government policy changes during last five years, has started on new developments on the back of top line growth of Rs. 6 billion for the first half of this financial year.
UML Group recorded Rs. 9 billion turnover for the last FY year, which makes the next half interesting, analysts say. “The topline grew due to the vehicle sales growth as well as from after sales. We recognised that there would be a pent up demand for vehicles and made use of the opportunity by making our products available through our island-wide branch network,” Chanaka Yatawara, Group CEO UML told the Business Times.
It was interesting to see the increased movement from the outstation markets, he said noting that certain customers had postponed purchases after the Easter Sunday terrorist attack through the initial part of the corona pandemic. “However, after the government’s decision to ban the import of vehicles, it created an increased demand.”
UML’s Motor vehicle assembly plant has done really well during the challenging period.
They assembled DFSK SUV motor vehicle with analysts saying that approximately more than 180 SUVs have sold during this period in the country. They said that another couple of shipments with parts to assemble over 300 DFSK SUVs will be in the country before March next year and for most are pre booked ones.
Once stocks are depleted, UML will face challenges, Mr. Yatawara said noting that, “however we will focus more on our assembly operation which will continue to produce a few models of vehicles. The demand for the small car and SUV we produce has been very encouraging.”
UML has two main workshops situated on a 7-acre property in Orugodawatte and on a 10-acre property in Ratmalana, with a capacity to service and repair over 120,000 vehicles each year.
“Now there is more ‘clarity’ on the future of the construction sector which has fetched more enquiries for our JCB and Liugong construction equipment. Hopefully we will see better results for these products soon,” he said.
Getting into the construction sector is the one of new initiatives that the company has implemented in 2019 and with the expected construction boom in the country this sector will provide a great support to the company bottom line, analysts predicted.
“We also believe that after the election a more stable Government will promote construction and infrastructure development and we are well placed to cater to this segment with a range of products we have in concrete mixing and earth moving equipment,” Mr. Yatawara said,
He said the company aims to make available repairs for brands that they do not import in some of their selected workshops going forward. “We believe that there is a lot of potential for growth in this area.”
Going forward, UML hopes the government will relax the import ban soon. “With our current increased market shares, the imports will help fulfil the demand we have created,” Mr. Yatawara said.