Research Analyst
Jan 25 - 31, 2010

Honda Atlas Cars (Pakistan) Ltd is engaged in the assembling, manufacturing, and sale of Honda vehicles and spare parts. Honda Atlas Cars Pakistan Ltd is a joint venture between Honda Motor Company Ltd. Japan, and the Atlas Group of Companies, Pakistan.

Since the commencement of production in 1994, the company has produced and sold more than 150,000 cars till October 2008. Honda Atlas is committed to meet customer expectations, and to provide good value for money.

Currently, the company is offering eight different models of Honda CIVIC and CITY cars in wide range of colors with unique technological and other features.


The company produced 5,320 units for the half year ended September 2009 and the sale was 5,776 units. During the company's half year, it continued to absorb depreciating rupee against US$ and Japanese yen, coupled with inflationary impacts, and decline in unit sales.




2009 2008
Sales 7,326,145 7,327,321
Cost of sales (7,489,950) (7,036,742)
Gross profit (163,805) 290,579
Distribution costs (60,347) (89,924)
Admn expenses (69,998) (71,501)
Loss before tax (585,573) (81,508)
Loss after taxation (536,419) (52,163)
Loss in EPS (Rs) (3.76) (0.37)

The loss after tax for the first half of the year was Rs 536.4 million. The net sale was Rs 7,326.1 million. The cost of sales was Rs 7,489.9 million, which resulted in gross loss of Rs 163.8 million. Administrative and selling expenses were reduced from 2.2% of sales of last year to 1.8% of sales in the period. However, financial charges were increased to Rs 277.4 million from 46.5 million in the same period last year due to markup on short- and long-term loans obtained for expansion of capacity for long-term growth.


Honda Jet is an advanced light business jet that breaks new ground by offering a larger cabin and luggage space, far better fuel efficiency, and higher cruise speed compared to conventional aircraft in its class. Honda Jet fulfills one of Honda's longstanding dreams to advance mobility through personal aviation. Honda Jet is transcending the standards in light jet travel.


The world economy and particularly of America and Japan are on revival path. The Pakistan's economy, which was not affected by the world meltdown, is showing further signs of improvement. Accordingly, Pakistan's economy, among others, witnessed improvement in the last quarter. There was sufficient liquidity in the system due to unprecedented remittances of US$7 billion and agriculture growth at 4.7%. It led to purchasing power to the rural economy in addition to the urban customer.

(AS ON JAN 2010)

4 19.12 19 16,223
5 19 18.96 48,009
6 18.96 18.93 20,000
7 18.93 19.29 39,628
8 19.29 20.29 147,970
11 20.29 20.43 116,919
12 20.43 19.74 20,576
13 19.74 19.95 36,111
14 19.95 19.51 7,571
15 19.51 19.94 23,281
18 19.94 19.59 29,729
19 19.59 19.71 16,050
20 19.71 19.65 19,753

The cumulative effect led the GDP growth rate to 2%. The inflation declined from ever-highest rate 25.3% in August 2008 to 10.5% in later part of 2009. With the assistance of IMF, the economy was back on safe route. The exchange rate is stabilizing. SBP reserves strengthened to about US$15 billion. The overall fiscal deficit was reduced to 4.3%.

The Honda Atlas has revised its rates and increased prices by almost Rs 30,000. Honda City manual after witnessing an increase of Rs 30,000 in price gained a prices tag of Rs 1,239,000 as compared with Rs 1,209,000 earlier. Price of City automatic has gone to Rs 1,359,000 as compared with Rs 1,329,000.

Civic hard top manual has witnessed an increase of Rs 28,500 as it stood at Rs 1,629,000 as compared to Rs 1,600,500. Civic hard top automatic has been revised to Rs 1,711,500 against Rs 1,686,000.

Similarly, Civic sunroof manual has gone to Rs 1,743,500 as compared to previously Rs 1,716,500 and Civic sunroof automatic price stood at Rs 1,849,000 against Rs 1,810,000.

The company had to increase the prices of different makes due to appreciation of Japanese currency against Pakistani Rupee. Besides, international steel prices inched up very high, thus increasing the cost of production.

A few years ago, the scenario of the local car market was completely different, as the car manufacturers enjoyed monopoly and used to charge premium for immediate delivery of vehicles. Leasing companies and banks indirectly supported them, which offered easy loans to people to buy automobile at very low interest rates.


Honda has always targeted mass-market models in order to have the greatest impact on clean air and fuel economy. Honda has introduced a new generation of gasoline engines around the world that provide extremely low emission levels and increased fuel efficiency while still improving driving performance.

The next quarter though is a challenging one, the economy, overall, is getting better. The macroeconomic stabilisation programme of the government and the improving economic indicators indicate better GDP growth rate.