Karachi, July 24, 2023 – Honda Atlas Cars (HCAR) in Pakistan has revealed plans to introduce new models and variants in the near future.
The announcement was made during the company’s annual corporate briefing session, where they discussed their financial performance for FY23 and provided insights into their future outlook.
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Despite facing challenges in the automotive market, Honda Atlas Cars remains optimistic about their upcoming releases. The management highlighted that the new models and variants are already in the pipeline and will soon be available for commercial purchase.
In the financial performance report for FY23, HCAR reported a profit of PkR 1.82 per share. This figure represents a significant decrease of 90 percent Year-on-Year compared to the same period last year when the profit per share was PkR 17.58. The company’s top-line also experienced a decline of 12 percent Year-on-Year, primarily due to a 31 percent drop in volumetric sales, which was attributed to restrictions on letter of credits (LCs).
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However, the company managed to improve its gross margin, which rose to 8 percent in FY23, up from 5 percent in the previous year. This improvement was supported by several price hikes and efficient inventory management strategies.
Despite the positive prospects for new models and variants, there are some concerns regarding the overall outlook for HCAR’s stock. Issues related to vehicle affordability and supply-driven concerns have resulted in a Neutral stance on the stock from KTrade Research.
Regulatory factors have also impacted HCAR’s operations, including the imposition of a super tax, higher sales tax rates (18 percent on City and 25 percent on others), and an increase in advance tax. These factors, coupled with LC restrictions, contributed to a significant decline in sales, with the company selling 25,726 units in FY23, a decrease of 31 percent Year-on-Year.
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HCAR’s recently launched model, H-RV, received a positive response from customers, providing a glimmer of hope amid the challenging market conditions.
To address concerns and improve their standing, HCAR aims to enhance localization efforts. At present, the localization levels stand at 71 percent for City, 61 percent for Civic, 55 percent for BRV, and 52 percent for HRV.
Despite the easing of LC restrictions compared to the previous year, the automobile industry is expected to continue facing weak demand due to high car-financing rates, decreased purchasing power, and multiple increases in car prices. Additionally, currency devaluation and rising raw material costs will pose challenges for the industry’s supply side.
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In conclusion, Honda Atlas Cars’ decision to introduce new models and variants comes amid a challenging economic and regulatory environment. Despite the hurdles, the company remains committed to improving its financial performance and meeting the evolving demands of the Pakistani automotive market. The industry’s recovery will depend on various factors, including changes in regulatory policies and stabilization of economic conditions.
