Honda Atlas Cars Pakistan Struggles to Compete in Export Markets Amidst High Input Costs

Strategic Insights -

Honda Atlas Cars Pakistan Ltd has made a symbolic entry into international markets by exporting 38 units of its 1.2L Honda City to Japan, but the company faces significant challenges in competing in the global automotive market. Despite achieving a 42% year-on-year increase in topline revenue, reaching Rs78 billion in MY25, Honda Atlas is at a disadvantage compared to regional competitors like Thailand and Indonesia. The company is seeking clear and supportive government policies to unlock its export potential, but high input costs and lack of effective export-supportive policies hinder its progress.

Key Takeaways:

  • Honda Atlas Cars Pakistan exported 38 units of its 1.2L Honda City to Japan during MY25, marking a symbolic entry into international markets.
  • The company aims to expand beyond local markets, laying the groundwork for sustained export momentum, despite facing challenges in competing with regional competitors.
  • Honda Atlas reported a 42% year-on-year increase in topline revenue, reaching Rs78 billion in MY25.
  • The company has achieved localisation levels of 74% for City, 64% for Civic, and 61% for the HR-V hybrid.
  • Industry expert Mashhood Ali Khan highlighted the pressing need for consistent and clear government policies to unlock the full export potential of Pakistan's automotive sector.
  • Chairman of the All Pakistan Motor Dealers Association (APMDA), HM Shahzad, criticised recent automotive export claims, arguing that without meaningful localisation, Pakistan lacks the foundation to become a competitive automotive exporter.

Statistics:

  • Honda Atlas exported 38 units of the 1.2L City model to Japan during MY25.
  • The company achieved a 42% year-on-year increase in topline revenue, reaching Rs78 billion in MY25.
  • Honda Atlas reported a profit after tax of Rs2.7 billion (EPS: Rs18.97) in MY25, up 16% year-on-year, supported by tax incentives.
  • The effective tax rate for the company was 17.27% in MY25.
  • 20 to 25 parts manufacturers export to Europe, the United States, and the Middle East currently.

Sources:

  • AKD Securities
  • Arif Habib Limited (AHL)
  • Mashood Ali Khan, industry expert
  • HM Shahzad, Chairman of the All Pakistan Motor Dealers Association (APMDA)
  • Honda Atlas Cars Pakistan Ltd's annual report for MY25.