Assignment: Project Report on Honda Atlas Cars

SUBMITTED TO:

Sir. Syed Raza Abbas

SUBMITTED BY:

Sikander Riaz (Reg. No. 4342) M.Akhter

(Reg. No. 4320) Ammar Ahmad (Reg. No. 4302) Salman Ali

(Reg. No. 4354)

Table of Contents

1) Introduction to Business

Nature of Business

Legal status

Vision

Slogan

Products

Market Segmentation

Honda Atlas Current strategy

Honda Atlas Philosophy

Honda Atlas Culture

Competitors

Market Share

2) Trend Analysis(Last Five Years)

Gross Profit Margin

Net Profit Margin

Return on Equity

Return on Assets

Debt to Equity Ratio

3) Bird Eye View of Financial Analysis

4) PEST Analysis

Political Factors

Economic Factors

Social Factors

Technological Factors

5) SWOT and TOWS Analysis of Honda Atlas

6) Consumer Research

Indus Motors

Pak Suzuki Motors

7) Porters Five Forces Model

8) BCG Matrix of Honda Atlas

9) Consumer Research

10)Honda Atlas Marketing

11)4P’s of Honda Atlas Cars

Product

Price

Promotion

Place/ Distribution

12)Recommendations

(1)

Introduction to the company:

Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company

Limited Japan, and the Atlas Group of Companies, Pakistan.

Nature of Business :

Principal activities of Honda Atlas Cars in Pakistan are assembling, manufacturing and

selling of passenger cars along with the spare parts.

Legal Status of Business:

Honda Atlas Cars Pakistan Limited is a public limited company incorporated in Pakistan

on November 4, 1992 and it is listed on Karachi, Lahore and Islamabad stock

exchange.

Vision Statement of Honda Atlas Cars:

Focusing on “satisfaction” (customers’, associates’ and shareholders’) with challenging

spirit and flexibility, we are dedicated to supplying latest generation cars with advanced

technology, greater fuel efficiency and competitive prices, along with friendly and

efficient after sales back up, maintaining “quality” as core of all activities.

Slogan of Honda Atlas Cars

“THE POWER OF DREAMS”

Products:

Honda Atlas Cars Pakistan is currently offering the following products in Pakistan.

Market Segmentation:

Honda Atlas Cars has segmented their market according to the product so that they can easily and affectively target them. They have divided it demographically and psychographicaly.

Income

Social class

Occupation

Targeting:

They target their each vehicle differently because of the different market for each of them. Like city has a different target market and accord has different target market.

Honda City

Geographic:

Region--------------------------------------------------Pakistan, mainly Punjab and Sindh

Demographics:

Gender----------------------------------------------------most female and males

Income----------------------------------------------------minimum Rs 150000

Occupation-----------------------------------------------any occupation

Honda Atlas Cars

Civic

City

CR-V

Accord

Psychographic:

Social class-----------------------------------------------Middle and upper class

Lifestyle---------------------------------------------------believers, achievers and strugglers

Honda Civic

Geographic:

Region----------------------------------------------------Pakistan, mainly Punjab and Sindh

Demographics:

Gender----------------------------------------------------majorly males, females

Income----------------------------------------------------minimum Rs 200,000

Occupation-----------------------------------------------any

Psychographic:

Social class-----------------------------------------------upper middle and upper class

Lifestyle--------------------------------------------------fulfilled, believers and achievers

Honda Accord

Geographic:

Region---------------------------------------------------Pakistan, mainly Punjab and Sindh

Demographics:

Gender---------------------------------------------------mainly males, females

Income---------------------------------------------------minimum 450,000

Occupation----------------------------------------------any

Psychographic:

Social class----------------------------------------------upper class

Lifestyle-------------------------------------------------fulfilled, believers, achievers, proud

CR-V

Geographic:

Region---------------------------------------------------Pakistan, mainly Punjab and Sindh

Demographics:

Gender---------------------------------------------------mainly males, females

Income---------------------------------------------------minimum 450,000

Occupation----------------------------------------------any

Psychographic:

Social class----------------------------------------------upper class

Lifestyle-------------------------------------------------fulfilled, believers, achievers, proud

Honda Atlas Current Strategy:

Honda Atlas is currently pursuing the differentiation strategy. Honda wants that it

should be known for highest quality and technology. It strives its best to achieve no 1

customer satisfaction. Honda wants to provide its customers worth for their money.

Honda Atlas is also planning that it should make fuel efficient cars that are

environmental friendly.

Honda Atlas Corporate Philosophy:

Honda has the following corporate philosophy

1) Dynamic manufacturing and marketing of prestigious products to the entire

satisfaction of customers.

2) Create ideal working environment for continuous development of product and

personnel.

3) Provide adequate return to share

Honda’s Organizational Culture

Hondas organizational culture is a beauty in itself. The company has a blend of

Japanese and local culture that provides excellent growth opportunities. Cultures of

both countries have blended really well to form a professional team of dedicated

specialists.

It operates under the basic principles of "Respect for the individual" and "The Three

Joys" - that are commonly expressed as The Joy of Buying, The Joy of Selling and The

Joy of Creating.

"Respect for the individual" reflects the company’s desire to respect the unique

character and ability of each individual person, trusting each other as equal partners in

order to do their best in every situation. Based on the foundation of "Respect for the

individual", "The Three Joys" expresses their beliefs and desires that each person

working in, or coming into contact with the company, directly or through our products,

should share a sense of joy through that experience.

In line with these basic principles, since its establishment AHL has remained on the

leading edge by creating new value by providing products of the highest quality at a

reasonable price for the customer's satisfaction. In addition, the Company has

conducted its activities with a commitment to protecting the environment and enhancing

safety in a mobile society.

Major Growth Area of Honda Atlas Cars:

Honda city of Honda Atlas Cars showed a 14% growth during 2011. It is currently the

most liked segment of Honda. 4175 units of Honda city were sold in 2011 as compared

to 3670 units in the same period last year. Honda Civic has showed a steady growth.

Reports have shown that sales of Honda Civic have decreased by 8%. Honda Accord

and CR-V are a source of concern for the company.

Competitors:

Pak Suzuki

Indus motor Company

Used imported cars

Market Share of Honda Atlas:

Honda Atlas Pakistan has currently a market share of 10%, while Indus Motors has a

market share of 30% and Pak Suzuki Motor Co limited has a market share of 60%.

10%

60%

30%

HondaSuzukiIndus

Trends Last 5 years:

Gross Profit Margin Ratio:Honda Indus motors Suzuki Industrial average

2005 8.1 11.96 9.9 9.982006 1.7 9.80 10.1 7.22007 4.6 11.77 11.8 9.392008 1.0 11.37 9.4 7.252009 4.3 9.29 1.5 5.03

Honda Indus Suzuki Industrail Average0

2

4

6

8

10

12

14

20052006200720082009

Operating profit margin ratio:

CompanyYear

Honda Indus motors Suzuki Industrial average

2005 6.4 10.06 8.7 8.382006 .5 8.34 9.9 6.242007 3.5 11.56 10.7 8.592008 -1.1 10.83 8.4 6.042009 2 8.5 2.5 4.33

Honda Indus Suzuki Industrail Average-2

0

2

4

6

8

10

12

14

20052006200720082009

Return on equity:

CompanyYear

Honda Indus motors Suzuki Industrial average

2005 22.5 39.1 28.96 30.182006 8.1 33.2 33.63 24.982007 30 42.3 35.27 35.862008 -10.3 34.1 22.04 15.282009 2.6 24.3 4.4 10.43

Honda Indus Suzuki Industrail Average

-20

-10

0

10

20

30

40

50

20052006200720082009

Return on Assets:

CompanyYear

Honda Indus Motors Suzuki Industrial average

2005 8.19 13.02 12.14 11.122006 1.72 12.08 13.9 9.232007 6.72 18.36 15.96 13.682008 -3.03 17.44 12.48 8.962009 .99 15.58 3.27 6.61

Honda Indus Suzuki Industrail Average

-5

0

5

10

15

20

20052006200720082009

Debt to Equity Ratio CompanyYear

Honda Indus Motors Suzuki Industrial

2005 2.62 2.06 1.45 2.042006 4.63 1.73 1.40 2.582007 2.39 1.53 1.08 1.672008 2.40 0.95 .52 1.292009 1.11 0.46 .20 .59

2005 2006 2007 2008 20090

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Honda IndusSuzukiIndustrail AverageSeries5

Bird’s eye view of Financial Analysis:

The auto industry is going through a phase of consolidation. After registering an

average growth rate of 40 percent from 2003 to 2006, the industry growth decelerated

to 9 percent in 2007 and a marginal growth of 2.8 percent in 2010. Over the last couple

of years, the auto policy has experienced many twists. The liberal policy to import re-

conditioned cars affected the growth rate. However, the terms of imports were tightened

last year.

The company sales were Rs 14,715 million during the year under review against

Rs.17,055 million achieved last year. The cost of goods sold was 14,088 million against

Rs.16,882 million in the last year. The gross profit has improved to Rs. 627.5 million

compared to a gross profit of Rs. 172.9 million last year. The gross profit margin has

improved substantially to 4.3 percent of sales against 1.0 percent of sales for last year.

Last couple of months have seen rupee under extreme pressure against major

currencies of the world.

In the above ratios we can see that company has not performed well as compare to its

competitors and industry. There was political unrest in the country along with the

national security issues. Furthermore the in the economic environment resulting from

the rising interest rate, limited credit availability for auto financing, depreciation of the

Pak Rupee against all the major currencies, unprecedented rise in the prices of oil, steel

and other inputs caused severe volatility in the market place, leading to high inflation

and loss of consumer confidence. Furthermore in the previous budget the government

had imposed higher levies and taxes which resulted in further increase in automobile

prices to the customers and dampened the demand. These all are the factors that’s

affects the company performance very badly. When we see that its competitors are not

affected badly as HACL. The basic reasons are that HACL is basically dependant on

imports that’s its 70% of raw material is imported from Malaysia so when dollar

appreciates against rupees it will hurt the company operations, while it competitor

Suzuki is getting its whole parts from local vendors. The company has limited numbers

of product where as Indus Motors (Toyota), and Pak Suzuki has greater product line.

The Honda position is not so much good so they have to take some corrective actions

by changing their strategies.

Pest Analysis:

Political Forces:

The government plays an important role in the operation and manufacturing products

and services in terms of regulations. Following are some of the factors that could cause

Honda Cars to differ materially from the expected results.

Instability and political clashes:

Now a day’s Pakistani environment is instable due to political clashes among political

parties. Inside country war and drown attacks in north frontier areas. This political

instability has led to uncertain environment in the country, which is a threat for any

business including Honda.

Liberal Policies:

According to the analysts, the current policies on used cars in Pakistan are still

extremely liberal when compared to India, Thailand and other countries and are often

misused by importers under transfer of baggage scheme.

Government allowing imported cars:

Government of Pakistan has liberal polices regarding increasing the age of old imported

cars up to 5 years from 3 years, so it would certainly impact automobile industry of

Pakistan..

Reduction in Tariffs by the Government:

Government of Pakistan has proposed to reduce the tariffs on imported cars from 50%

to 25%. There would be lower import tariffs and there would be no license for imports

under the proposed idea.

Raising Depreciation Allowances:

Depreciation allowances have been raised from 50% to 60% for imported cars. It is not

very fruitful for the growth of local industry.

Legislations Regarding CNG fitted Vehicle:

The local car industry is already facing challenges due to rising import of used cars, and

now it is more worried over future sale of factory-fitted CNG vehicles in the light of

government decision to ban import and installation of CNG kits and cylinders in the

country.

Most Favored Nation Agreement:

Trade with India has raised fears that it would have a negative impact on the auto

industry of Pakistan. Competition would become more intense as a result of these

agreements.

Tightened monetary policies:

High interest rates and reduction in car financing facility offered by banks further

depressed the demand for cars. The tightened monetary policies not only hampered the

sales of the company, but also increased the cost of debt that it had taken for the

expansion purpose

Euro 11 emission standards:

Auto Industry of Pakistan has to follow the Euro 11 emission standards from June 2012.

So, automobile has to follow this law and make environment friendly cars. So,

government actions and legislations would certainly impact Honda Atlas Pakistan and

automobile industry of Pakistan.

Economic Forces:

Overall economic conditions are not very sound. In fiscal year 2007-08 GDP was 6.81

which was reduced to 3.68 in fiscal year 2008-09. In fiscal year 2009-10 it further

reduced to 1.72, during year 2010-11 it increased to 3.76 and in ongoing year 2011-12 it

is only 2.39. Budget deficit is Rs 850 billion which is 4% of GDP of Pakistan. The

inflation rate of Pakistan is as follows: during 2007-08, it was 19.27, 2008-09 it was

14.39, 2009-10 it was 13.07, 2010-11 13.23 and in ongoing fiscal year it is 10.1.

Inflation rate and GDP comparison shows that despite of constant investment as

claimed by govt. inflation rate is on rise and GDP rate is on decrease. Pakistan

government has taken huge loans from IMF. Due to mistrust in the Pakistan

environment the foreign direct investment has been declined. 35000 civilians and 5000

troops lost their lives due to security situation in the country. Flood devastations are

further adding to the economic problems of Pakistan. Energy crisis has worsened with

the passage of time. So, on the whole economic conditions in Pakistan are not too

sound and investment friendly.

Global crisis and Pakistan:

Pakistan did not face a major setback from the global crisis. The economic hardship by

the country has mostly been the result of domestic issues - internal strife, political

instability and poor governance has slowed down an otherwise a viable economy.

Hike in Inflation:

Inflation has risen by 25% during the current fiscal year. Increase in inflation would lead

to an increase of interest rates. So, loans would become more and more expensive.

Cost of production would increase, which would lead to increase in prices.

Depreciation of Pakistani Rupee:

Pakistani rupee has depreciated against other countries in the recent years due to

which cost of doing business has also increased, due to which there is a hike in the

prices of automobiles. Japanese yen has appreciated by 22 percent and the US dollar

by six percent against the Pakistani Rupee. As automobile industry imports inputs, so, it

would result in increase cost of doing business. Consequently, Honda Atlas has

increased the prices. Honda City has been raised by Rs20, 000 while Honda Civic will

cost Rs30, 000.

Hike in the Prices of Inputs:

Between 2010 and 2011, steel prices witnessed an increase of 26 percent,

polypropylene rose by 51 percent, aluminum by 49 percent and that the price of copper

shot up by 82 percent. So, the cost of production would increase and consequently they

have to increase prices.

Increase in the prices of Petrol:

Increase in the prices of petrol and CNG have forced the automobile producers to

accommodate for the market by introducing more economical cars. Increase in the

prices of petrol is further adding to the problems of consumers and automobile

producers.

Technological Forces

As, far as technological forces is concerned in relation to the auto industry of Pakistan.

People are demanding fuel efficient vehicles which are environmental friendly.

Government of Pakistan has imposed Euro 2 Emission Standards. Automobile

Companies are trying to come up with Hybrid cars which are fuel efficient as well as

environmental friendly. As, far as technological development of Honda Atlas is

concerned it has introduced Euro 4 Emission Standard complaint cars (environmental

friendly).

Social, cultural, demographic and environmental forces:

Effects of the automobiles on societies:

Over the course of the 20th century, the automobile rapidly developed from an

expensive toy for the rich into the standard for passenger transport. The development of

the automobile built upon the transport revolution started by railways, and like the

railways, introduced sweeping changes in infrastructure, manufacturing and legislation.

The wide reaching effects of automobiles on everyday life have been a subject of much

controversy. Proponents on one end of the spectrum claim the car is a marvel of

technology that has brought about unprecedented prosperity, while opponents on the

other end claim it lead to a mode of urban and suburban planning that discourages

walking and human interaction, uses large amounts of polluting fuel.

Economic changes

City Planning: The development of the automobile has caused changes in city

planning, as well as changing the roles of horses and railroads.

Industrial infrastructure: Huge industries devoted only to the automobile were

created. Others were expanded from once trivial insignificance to eminent importance.

Before the internal-combustion engine was developed, gasoline was a waste product,

often discarded. Once the automobile became common, the production of gasoline

blossomed into a matter of such importance that the governments took action to secure

a steady flow of oil. The steel industry was already established, but the coming of the

automobile created huge amounts of business for it. The chemical, rubber, and

petroleum industries were remade to suit the needs of the automobile and industries

sprang up, such as service stations, motels, and automobile insurance, that were

completely reliant upon the automobile for their livelihood. Infrastructure: Aside from

industries, one of the most visible effects the automobile has had on the world is the

huge increase in the amount of surfaced roads.

Changes to urban society

Traffic Jam:: Another change brought about by the automobile is that modern

urban pedestrians must be more alert than their ancestors. In the past, a

pedestrian had to worry about relatively slow-moving streetcars, or getting kicked

in the face by horses, or stepping in horse dung. With the introduction of the

automobile, a pedestrian has to worry about being hit by automobiles at high

speeds, and breathing noxious exhaust fumes.

Social status

The automobile signifies much more to many than simply a mode of

transportation. Henri Lefebvre called the automobile "the epitome of

possessions". In the early years, the car served as a mark of distinction above all

others. The automobile rapidly became a symbol of social status, and in some

cases, a fashion item. Not only was the ownership of an automobile

demonstrative of a certain level of income and prestige (and still is, especially in

poorer nations), it is also highly visible.

Safety

Automobile accidents caused many deaths and injuries, especially before

automobile safety laws were implemented. To this date, automobiles remain a

major cause of accidental death and injury, not to mention emotional stress.

Vehicle Air Pollution:

Air pollution is viewed as a serious problem in many cities in South Asia. Many

city governments say that transport is mainly responsible for air pollution and

have adopted, or are considering adopting technological measures to reduce

vehicle emission. This situation demands selection of appropriate measures in

the sector.

The impact of outdoor air pollution on public health and lost productivity should

be seriously taken as toxicity and ambient concentrations are the most damaging

health impacts. The particulate matter causing serious respiratory illnesses and

premature deaths throughout South Asia, and airborne lead, which retards

intellectual development of children in Pakistan and Sri Lanka is a common

phenomenon, where leaded gasoline is still used.

Factors Affecting Honda Atlas Cars in Pakistan

Following factors are affecting Honda Atlas cars in Pakistan

Interest Rates

Financial Institutions Polices

Credit reduction or expansion

Stability of local currency

Oil prices

Government Regulations regarding imports of used cars

Legislations regarding tariffs and import duties

Social Factors

Energy Crisis

Technological developments

Natural Disasters

Security Conditions of the country

CNG environment

Most Favored Nation Agreement

Inflation

Environmental Regulations to make environmental friendly cars

SWOT Analysis of

HONDA Atlas Cars

STRENGHTS

1. Brand image2. Advance Technology3. Safety4. Environment Friendly5. Greater fuel efficiency6. TQM

WEAKNESS

1. Dealership Network2. Resale value3. Maintenance cost4. Costly Spare parts5. Limited product line6. Lack of utilization of

capacity7. Declining Market

share and profitability.

OPPURTUNITY

1. People’s awareness about Global Warming

2. Customer desire for hybrid and fuel efficient vehicles

3. Increase in demand of small vehicles

SO STRATEGY

1. Promotion of products on the bases of environmental friendliness and fuel efficiency.

2. Greater focus on the production of eco - friendly cars.

WO STRATEGY

1. Increase the dealership networks all over the country.

2. Introduction of flexible fuel vehicle and going for product diversification

3. Reduction of maintenance Cost.

4. Increase product line by introducing Small Cars.

THREATS

1. Recession in the economy

2. WTO (World trade Order) opening local markets for global competition

3. Entry of reconditions cars

4. Political instability5. Tightening monitoring

Policy6. Energy crises7. Depreciation of rupee

against dollar8. Increase in Petroleum

and steel prices. 9. Inflation 10. Declining quality of the

infrastructure in the country.

ST STRATEGY

1. Advertise campaign around the brand image.

WT STRATEGY

1. Localization of supplies and raw material.

2. Launch a smaller car up to 1000cc and target lower income group

Competitors Analysis :

Mainly Honda Atlas Cars face competition from Pakistan Suzuki Motors and industry

motors. These are the two big players in the auto industry. Pak Suzuki Motors is leading

the auto industry with 60% shares. In pursuance of the terms and conditions of the Joint

Venture Agreement executed between Suzuki Motor Corporation of Japan (SMC) and

Pakistan Automobile Corporation (PACO), Pak Suzuki Motor Company Limited

(PSMCL) was incorporated as a public limited company in August 1983.The new

company took over the assets which included production facilities of Awami Autos

Limited. PSMCL started commercial operations in January 1984 with the primary

objective of passenger cars, pickups, vans and 4x4 vehicles. Strengths and weakness

of Pak Suzuki are as presented.

Strengths Weakness

Low Price Vehicles Less Distribution Channel in sub-urban areas

Large Distribution Channel Less Focus on look and design

Easy Availability Of Spare Parts Scarcity of raw materials

High Market Share Less technical training institute

Highly maintained Supply Chain

Indus Motor captures 30% of the market share. Indus Motor Company (IMC) is a joint

venture between the House of Habib, Toyota Motor Corporation Japan (TMC) and

Toyota Tsusho Corporation Japan (TTC) for assembling, progressive manufacturing

and marketing of Toyota vehicles in Pakistan since July 01, 1990. IMC is engaged in

sole distributorship of Toyota and Daihatsu Motor Company Ltd. Vehicles in Pakistan

through its dealership network. The company was incorporated in Pakistan as a public

limited company in December 1989 and started commercial production in May 1993.

The shares of company are quoted on the stock exchanges of Pakistan. Toyota Motor

Corporation and Toyota Tsusho Corporation have 25 % stake in the company equity.

The majority shareholder is the House of Habib. Strengths and Weakness of Indus

Motors are as follows

Strengths Weakness

Ample availability of spare parts Cars Interior problems

Low price of the spare parts Non-availability of CKD kits (operating

problems)

Stronger resale value Low Inventory

Most sophisticated dealership network

5 Forces Analysis (Porter):

Possible development of substitute products:

The possibility of the development of substitute product is high because other

competitors like Toyota, Nissan or Mitsubishi can adopt the strengths of Honda

products. If they did so then there will be a great threat the company and especially if

Toyota makes these changes Honda can lose its market share because Toyota's

strengths will add in those changes. Currently it is happening Toyota has increased its

market share since the launch of its new Corolla and there is a decrease in Honda's

share. This new corolla is equipped with modern technology and accessories like civic

has but Toyota is stronger brand name then Honda so some people shifted but due to

customer loyalty Honda still managed to reduce this threat. To avoid this threat Honda

should focus on the following factors

Maintain its quality.

Rivalry among competing firms in the industry

Potential entry of new companies

Potential development of

substitute vehicles

Bargaining power of

supliers of parts

Bargaining power of

consumers

Maintain the image of always being the first one to introduce new technology and

features.

Give more focus on customer satisfaction to make loyal customers.

Increase after sale services to again make more loyal customers.

Potential entry of new competitors:

Potential entry for new companies is also very high and the Pakistani market has a lot of

opportunities and companies already present are generating a lot of revenues. There

are no barriers for any new company from government. The customers are also looking

forward for new entrants to enter in this market. In past many new companies entered in

this market but some could not sustain the Pakistani market. Every new entrant is a

threat to Honda Atlas Cars Pak ltd. The policies of government are attractive for any

company to enter this market. Legislations regarding used vehicles are a proof of that.

So in order to avoid any direct or indirect threat from any new entrant company should:

Maintain the good image of its brand name.

Make changes in strategies and increase market share.

Bargaining power of consumer:

Bargaining power of customers is high in the Pakistan's market. There is intense

competition. Especially due to the imports of used vehicles a large no of customers

have shifted. If a consumer is not satisfied from any vehicle he can easily shift to the

substitute.

Bargaining power of suppliers:

Bargaining power of suppliers is very high because a lot of companies here in Pakistan

are importing a lot of parts from Japan, Korea etc. and they cannot shift to any other

supplier because if it's Honda Atlas they have to import parts from Honda Motor Co

Japan, no one else can provide those parts. Some parts which are being provided by

the local suppliers or any company other than Honda Motor Co can be bought from its

substitute company, so in the case of those suppliers their bargaining power is low. But

in Pakistan all the manufacturers are importing most of the parts from those parent

companies so overall bargaining power of suppliers is high.

Rivalry among competing firms:

Rivalry among competing firms is very strong especially between the market leaders.

Competition between Honda Atlas, Toyota Indus, Mitsubishi, Nissan Pak Suzuki etc is

very high weather they are in direct or indirect competition. These companies are

spending a lot to remain in competition. Their strategies change time to time according

to the level of competition.

BCG Matrix (Honda Atlas Cars)

It is divided in four quadrants:

Stars: These are units with a high market share in a fast-growing industry. The hope is

that stars become the next cash cows.

Cash Cow: They are units with high market share in a slow-growing industry. These

units typically generate cash in excess of the amount of cash needed to maintain the

business.

Question Mark: This Indicates low market growth and high market share. These are

growing rapidly and thus consume large amounts of cash, but because they have low

market shares they do not generate much cash.

Dog: These are units with low market share in a mature, slow-growing industry. These

units typically "break even", generating barely enough cash to maintain the business's

market share.

High Medium Low

1.0 0.50 0.0

High +20 STARS Question Marks??

CIVIC & CITY ACCORD ?

Medium 0 CASH COWS DOGS

CRV

Low -20

The main selling products of Honda atlas are civic and city. They contribute the major

part of the market share of Honda Atlas. Their market share is more than medium and the

industry sales growth rate is also high. On the other hand Accord's market share is just

over low but its industry sales growth rate is just over medium so that is why it is in the

first quadrant. CRV has both low market share and industry growth sale rate.

Overall Honda Atlas would be in second quadrant, it would be star because accord and

CRV collectively just contribute over 2.5% sales of Honda Atlas cars. So the company's

overall sales are done by civic and city.

Consumer Research

Perception of people about Honda Products:

People think the product should have excellent fuel consumption and a good resale

value.

Easily availability of spare parts everywhere even in rural areas.

The quality of product is made according to Pakistan roads and infrastructure.

Product line extension with the very low difference of price.

3S (Sales, Service and spare Parts) at your door step.

Brand Loyalty.

People want such vehicle which doesn’t effect on their prestige and also within the

range of them.

MARKETING OF HONDA:

Honda Atlas Marketing Objective

Honda Atlas Pakistan Limited as well established automobile companies in Pakistan. It

always keeps focus on that mission and vision in the same direction HACPL does target

of goal achievement. The standard of the HACPL according to marketing is very high.

HAPL existence and central point of Honda Atlas to sell dream Car because in Honda

point of view “Power of Dreams” itself attracting the customer for that need to build

unique product.

HACPL marketing objective has been targeting in terms of provide satisfied customer

service, make possible to keep in reach the product, and strive to give outstanding

service to valued customers. In addition to providing regular service to customers, the

company also regularly conducts Service Campaigns, to facilitate customer's need for

service. This has given company customers’ absolute confidence in their cars.

Honda Atlas Marketing Mix:

Marketing mix elements or 4p’s strategy of marketing is the essence of any business

same like this strategy of marketing mix apply in top listed automobile company overall

the world Honda atlas these key elements of marketing mix make the difference

between Honda atlas and other automobile companies, Honda atlas also comes up with

a strategy to figure out which strategy is best for them given the objectives and

resources. They must also consider the strengths and weaknesses of the company as

well as opportunities and threats. To enhance the aptitude of the companies, a

marketing mix strategy is introduced. The marketing strategy will create lucrative

marketing mixes for defined target markets. Honda atlas has been enhancing their

outcomes and marketing value by implementing the right combination of the four P’s.

Product:

Honda Atlas has competitive edge to other automobile Companies in term of product

quality.

Accord:

Witness the debut of the astonishing new Honda Accord: the outcome of our all-out

pursuit of sedan excellence, successfully uniting all contradictory elements. A bold

exterior presence with a luxury air, yet a sporty youthful feeling. An expansive upper-

class cabin with comfortable travel space for five adults and panoramic visibility. A

larger body with sportier performance than ever before and powerful I-VTEC engines

designed for high fuel economy. A renowned global car with all advanced Honda

technologies for driving command, plus eco-performance for increased recyclability.

And, Honda's world-leading safety protection, which even extends to pedestrians and

those in other vehicles. Experience its overall quality, riding comfort, and details for

yourself, and you'll know why the new Accord represents a distinct "status upgrade" for

the sedan.

Civic:

What moves you? What drives you? What excites you? Honda seeks the pinnacle of

technology in pursuit of answers. Now, we present a bold way to stir the body and soul,

designed to quicken the pulse at first glimpse, and stimulate the senses with each and

every encounter. The sporty new Honda Civic possesses rare spirit, and so do you.

See, touch, feel, drive and discover.

City:

See it coming, like an arrow. Striking good looks, cutting-edge design, sharply focused

tension. See it shoot straight ahead. What is it? Discover the compact sedan

breakthrough with strength to open a new era and outlast fleeting trends. Sleek styling

and strong performance, with swift, gutsy response to the driver's pedal action. Class-

leading* spaciousness and relaxing ride for outstanding comfort. Imagine the pride of

driving and owning this distinctive new-generation standard. Get ahead in the new City.

People will be watching.

CR-V:

Dynamic styling appeal. Elevated SUV outlook. Premium driving refinement. And an

exhilarating yet stable feeling. The new Honda CR-V has all you want, and more. A

spacious cabin and utilities, due to packaging innovation. Plus superb i-VTEC response,

quietness, and safety. Discover delightful CR-V driving. Now, all roads are exciting.

Price

BRAND MODEL PRICES

CR-V 2.4 Liter Rs. 7,104,000

CIVIC I-VETIC MANUAL Rs. 1,812,000

I-VETIC AUTOMATIC Rs. 1,932,000

VTI-ORIAL MANUAL Rs. 2,004,000

VTI-ORIAL AUTOMATIC Rs. 2,082,000

ACCORD I-VTEC Rs. 6,604,000

CITY MANUAL Rs. 1,579,000

AUTOMATIC Rs. 1,438,000

Promotion:

Honda Atlas (Pakistan) always strives to give outstanding service to valued customers.

In addition to providing regular service to customers, HONDA also regularly conducts

Service Campaigns, to facilitate customer's need for service. This has given to

customers’ absolute confidence in Honda cars. Honda also participates in promotion of

that product. Honda Atlas has a rapidly and quickly promote products more than its

competitors.

Place / Physical Distribution:

Honda Atlas Network of dealership has expanded and now company has twenty one 3S

(Sales, Service and Spare Parts) and thirty 2S (Service and Spare Parts) Pit shops

network in all major cities of Pakistan.

LOCATION 3S DEALERS 2S DEALERS

KARACHI 6 4

HYDERABAD 1 -

LAHORE 4 7

ISLAMABAD 1 1

RAWALPINDI 1 2

MULTAN 1 1

FAISALABAD 2 2

SARGODHA 1 1

GUJRANWALA 1 -

SIALKOT 1 -

MIRPUR 1 -

PESHAWAR 1 -

ABBOTTABAD - 1

BAHAWALPUR - 1

BUREWALA - 1

AZAD KASHMIR - 1

GUJRAT - 1

MARDAN - 1

OKARA - 1

RAHIM YAR KHAN - 1

SAHIWAL - 1

SUKKUR - 1

VEHARI - 1

Total 21 30

Marketing Operations/ Function of Marketing Department:

Marketing operation functions is the very essential tool and it is excellent essence of

any business same as this strategy imply by Honda Atlas Company to its authorized

Dealer. It is dealing with brand loyalty of Honda products my concern exists between

dealers and customers. Honda Atlas also depends on 3S but also facilitating with

separately 2S as well (Service and Spare Parts). This offer of facilities Honda Atlas

Motor compares to the Total Quality Management style of Honda Atlas Itself. These 3S

and 2S always monitor by Honda Atlas itself that what’s going on in which Direction?

These 3S and 2s has been facilitating through Dealers. Let we discuss these three

elements simultaneously:

Sales:

The HACPL’s Sales Deals by its authorized Dealers. The dealers engaged in providing

facilities the customer to buy Honda Brand(s). Honda Atlas Company has given

dealership authority approximately sixteen Dealers (cars) all over Pakistan. All of the

sales strategies followed by Honda Atlas Itself and it are directly involve and time by

time Honda Atlas keep attached with each sector, do analysis the sales, performance of

the dealers most importantly after sales, customer satisfaction report. Sales facilities

part of Honda Atlas is to facilitate its loyal customer and overcome customer’s

ambiguity, buying conflict and provide them maximum information before purchase.

Honda Atlas is also very conscious in sales as well as Customers Satisfaction.

All the authorized dealerships in Pakistan are a source of customer satisfaction. The

after sales are supported by the immaculate service and the availability of spares at

competitive prices for every car sold. To facilitate the customers for any assistance they

require, Honda Atlas has a separate department, called Customer Relations, at the

head office. This department is supported by the subsequent Customer Relations

Officers at all dealerships. The purpose of Customer Relations Department and

Customer Relations Officers is to enable our customers in getting any sort of help

required by them.

Services

The product sold is not means that close the window for customer now, it is beyond that

further after sales customer has largely engaged to deal in service and Spare parts

aspect. HACPL is a customer service conscious company, for which it is always looking

for avenues to develop further relations with the customers who have already

purchased the Product. Honda Atlas considers purchase of any product as the

beginning of relations with customers. To prolong this relationship and encourage the

customers to keeps on coming to the dealers, providing customer service the reason for

this facility is to stress on the importance of periodic maintenance. Periodic

maintenance is essential for every existing if this is performed regularly as per the

maintenance schedule the car is trouble free and life of car increases by many years.

For these free services the labor is not charged, where as the customer has to pay for

only the consumable like engine oil, oil filter, etc.

HACPL is providing regular trainings to the dealers' technicians. The trainings cover all

aspects of the cars and related Products including the periodic maintenance,

diagnostics, trouble shooting and repairs according to HONDA standards. From this we

want to facilitate the customers in maintaining their cars in top-most condition and

enjoying the comfort and performance of the luxury vehicles they own. It is our

endeavor to have uniform service standards made available at all dealerships in

accordance with the international Honda standards. We consider the properly

maintained vehicles not only to be a source of satisfaction to our customers; they also

increase the sale value of their car.

Spare Parts:

The Spare parts element is heavily concern and involved with brand loyalty of Honda

cars because cost of spare parts also consider when customer want to buy the car,

customers are also price conscious, availability of spare parts and as well as quality of

spare parts. Honda spare parts are expensive because they have to import those form

Malaysia.

Honda Atlas always follow those strategies which they can gain customer most attention

to its brands. Honda Atlas always make possible to be genuine and look genuine.

Honda attract its customer in under the statement that “Buy Honda genuine parts from

Honda dealers and enjoy 6 month's Honda Warranty, the Honda warranty can vary

product to product and contribute to the country’s economy and enjoy the satisfaction of

using 100% genuine Honda Parts. But if customers buy the parts from open market;

most probably is that customer may be buying smuggled parts and thus committing a

moral crime and robbing your country from precious revenue, customer may unable to

claim but if customer buy from Honda authorized Dealer so the part will be 100%

genuine, customer has no need to buy from open market, the trust between customer

and Honda Dealers become long lasting etc. It is the Honda Atlas’ aim to be No.1 in

customer satisfaction in all three S, Sales, Service and Spare Parts and two S in the

same time.

Recommendations

Honda Atlas Pak Ltd has lot of SBUs and by using them it can increase its market

share. They just need to change some strategies and look their weak areas. Currently

its weak financial position and decreasing market share is due to the current position of

economy. This majorly contributed in the weaknesses. The buying power in Pakistan

has decreased a lot which resulted in decrease demand of vehicles and this resulted

weakness. We have analyzed everything very thoroughly; its internal and external

factors, competitors, the position of economy, industry's position and now we are in

position to give some recommendations which will hopefully reduce the weaknesses of

the company.

One main problem is the increasing prices of yen which resulted in dramatic

increase in the company's expenses. Because a lot of parts are being imported from

Japan, so what we suggest is that the financial background of both the partners is

very strong so they should invest and bring all the technology and machinery here in

Pakistan so that they can make all the parts here in Pakistan. Then there will be no

need to import any part and in future any fluctuation in the exchange rate won't affect

the company's expenses.

In Pakistan the buying power of people have decreased a lot so the market which

Honda Atlas is targeting has decreased. What we suggest is that they should

introduce a smaller car up to 1000cc and because of their unique strengths it will

attract many customers. They should target the lower income group with that car.

This market of lower income group has increased in last two to three years.

Currently Honda Pakistan is targeting only major cities of Punjab and some cities of

Sindh other area is still neglected there is no dealership there. So people in those

areas do not buy Honda. Honda requires trained mechanics which are only present

at the Honda's dealerships. They should increase the no of their dealerships and

expand in those areas which are neglected. It will increase the sales.

Vehicles made by Honda are not completely suitable for Pakistan's market. For

example they does not run successfully on CNG, specially City, the shields under

the engine are made of plastic so they come out more often etc. by making some

changes in these existing vehicles they can reduce these problems because they

have the modern technology perfect engineers. After resolving these problem make

some campaigns and tell the customers that these problems have been resolved

than sales increase.

They should make contracts with government departments like Toyota does, give

some attractive offers and sell them vehicles in large quantities. This will increase

sales rapidly.

HACL should have to utilize their assets properly as their half of the assets were not utilizing and they became a burden for the company so they have to utilize those assets in order to increase efficiency.

Spare part is not available in the market especially in those areas where there is no

dealer. Make some contracts with the markets of such places and provide them

spare parts so the people in those areas who have Honda vehicles could be

satisfied.

Increase the no of 2s dealers everywhere so that customers could get services of maintenance and repairs. HACL has to increase its 3S Dealership network, in order to increase its sale points.

Make good marketing strategies and increase advertising.

They can also start exporting these vehicles to countries like Bangladesh or

Srilanka. Toyota once started exporting their vehicles to Bangladesh which resulted

in a lot of revenues.