Amid the economic uncertainty, Honda Atlas concedes plan to release new auto for the local Market
The management of Honda Atlas Cars Pakistan (HACP) has deferred the introduction of a new locally-assembled car owing to the country’s uncertain economic condition.
The company had already given the drawings of dies, tools and moulds to local vendors some six months back.
“HACP has now asked local vendors to cancel their activities for parts development,” a number of vendors for Honda cars said on the condition of anonymity.
The company has also asked the vendors to give back the drawings, they added.
Parts markers said work on a new model between local assemblers and vendors usually kicks off around 1.5 to 2 years before the launch of a new model. They said the car assembler became skeptical when the rupee lost the value by five per cent few months back. Now the currency situation is highly volatile, making the cost of vehicle unfeasible, they added.
“Economic conditions, uncertain rupee-dollar rates, reports of imposing additional regulatory duties on raw materials, etc have compelled the company to defer the plan to roll out new model,” vendors said. The market was abuzz with reports that HACP was considering introducing locally assembled 1,200cc Brio by 2019 which could add more than 3,000 units in company’s total production.
However, an official of HACP – seeking anonymity – said dropping Brio is not related to economic reasons. “Its launch is neither final nor dropped. It is yet to be finalized for entry into the Pakistani market,” he said, adding: “It is in planning phase.”
HACP sold 42,810 units of Honda Civic and Honda City in FY18 as compared to 37,004 units in FY17.
Honda BR-V sales swelled to 8,684 units in FY18. It was launched in April 2017. From April to June 2017, BR-V sales stood at 2,159 units.
HACP reported its 1QMY19 earnings, with EPS clocking in at Rs7.4 compared to Rs14.6 per share in 1QMY18, down 50 per cent year-on-year (YoY), as GP margins dropped significantly.
Company’s net sales rose by 13pc YoY due to three price hikes since Dec 2017 as well as 13pc YoY growth in volumes.