atlas honda report

Sir Adamjee Institute of Management Science Page 1

ATLAS HONDA – COMPANY PROFILE

Atlas Honda Limited (AHL) is a joint venture between the Atlas Group and Honda Motor Co.

Ltd., Japan. The company was created by the merger of Panjdarya Limited and Atlas Autos

Ltd. in 1988. Both these motorcycle manufacturing concerns were established by the Atlas

Group. In addition, a third concern, Atlas Epak Ltd. was taken over by the Government of

Bangladesh in 1971 after the fall of Dhaka. AHL manufactures and markets Honda

motorcycles in collaboration with Honda Motor Company. The Company also manufactures

various hi-tech components in-house in collaboration with leading parts manufacturers like

Showa Atsumitech, Nippon Denso and Toyo Denso. Honda motorcycles are by far the largest

selling motorcycles in the country with an unmatched reputation for high quality, reliability

and after-sales-service.

AHL has undertaken to develop local manufacturing capabilities to the highest, economically

feasible level. While a major role in localization has been assigned to vendor industries, Atlas

has the country‟s largest in-house manufacturing capability at its Karachi and Sheikhupura

plants. To support the production facilities, the company has established an R&D wing and

tool making facilities through CAD/CAM which are growing rapidly in size and function as

the company expands. Atlas has managed to execute 12 Joint Venture/Technical Assistance

Agreements between local vendors and foreign manufacturers for transfer of technology.

Besides, Atlas has directly executed 9 Joint Venture/Technical Assistance Agreements other

than Honda.

AHL management is striving to modernize company operations by adapting applicable

aspects of research and theory and more specifically, Honda‟s unique philosophy of hard/soft

technologies to the realities of Pakistani conditions. Company management structure, systems

and processes are changed according to the demands of the customer, growth and new

technology. Efforts are being made to develop participation at all levels of personnel in

decision-making and a substantial and effective delegation has been established at levels

where applicable. Various participation programs such as „Ala Mayar‟ Quality Circles

movement, launched in 1985, are strongly encouraged to allow constructive self-expression

and teamwork. The Company training and development programs encourage all members to

develop themselves and contribute to their full potential.


AHL is playing a pioneering role in creating conditions for easy and confident use of

motorcycles all over the country. A vast and growing network of over 1600 sales service and

spare parts dealers has been established. In order to back up this system, Atlas has set up

Warranty & Training Centers (WTC) in Karachi and Lahore which provide several courses of

varying duration and complexity for motorcycle mechanics and users each year. Mobile

training facilities take the latest know-how, technology and maintenance of motorcycles to

major rural and urban centers around the country.

Annual Production Capacity

750,000

Authorized Capital

1.5 Billion (rupees)

Paid Up Capital

Rs. 1,034.066 Million

Karachi Plant

Company mother plant is based in the city of lights and provincial capital of Sindh, The

Karachi city. It is located at F-36, Estate Avenue, S.I.T.E. Karachi. Atlas Group signed

technical agreement with Honda in 1963 and plant started commercial production

subsequently. Plant spread over an area of 5 acres. In 1964, production began with 7

motorcycles per day. Now plant production has reached to 300 units in a day. Plant

manufactures CD 70 only.

Sheikhupura Plant

Another plant is situated in Sheikhupura city, Punjab. It is located at 26-27 KM Lahore-

Sheikhupura Road Sheikhupura. The plant was built in 1981 and spread over an area of 27

acres with the establishment of modern and synchronized 500K plant in 2006. The plant

manufactures all four models i.e. CD 70, Pridor, CG 125 and CG 125 Deluxe.


Export

Bangladesh

Regional Offices

Lahore: 1 Mecloed Road Lahore-54000 [ (042) 111-111-245, 37225015-17,

37233515-17 ]

Rawalpindi: 60-Bank Road, Saddar [ (051) 5120494-6, 5120497 ]

Multan: Azmat Wasti Road Multan-60000 [ (061) 4540054, 4540028, 4571989 ]

Rahim Yar Khan: Atlas Honda Limited, 4-B Zamindara Colony [(068) 5888809 ]

National Tax Number (NTN)

0801063-3

Company Registration Number

CUIN 0001569

Symbol of the Company

AHL

Stock Exchange Enlistments

Karachi Stock Exchange

Lahore Stock Exchange

Auditor of the company

Hameed Chaudhri & CO Chartered Accountants.

Legal Advisors of the company

http://www.kse.com.pk/

http://www.lse.com.pk/

http://www.hcc.com.pk/


Mohsin Tayebaly & Co.

Agha Faisal – Barrister at Law

Name and Address of Share Registrar

Hameed Majeed Associates (Pvt) Limited.

H.M. House 7-Bank Square, Shahrah-e-Quaid-e-Azam, Lahore


VISION OF AHL

Atlas Honda limited, being Japanese, always believe in quality leadership customer

satisfaction and satisfaction of shareholders. The executives and managers at AHL are keen

about the staff cooperation and dedication. That‟s why promoting teamwork culture is the

core activity of the company. The vision of AHL as follows:

“To remain a market leader in the motorcycle industry and emerge as a globally

competitive center of production and exports.”

The above statement clearly predicts the overall scenario of the management at AHL.

MISSION STATEMENT

Mission Statement, the statement that further reveals the practicalities of any organization,

comparable to its vision statement. The Mission Statement at AHL is highlighted below:

“To be a dynamic profitable growth oriented company through market leadership

excellence in quality and service optimizing value for the shareholders and maximizing

exports

To give attractive return to business associates and shareholders as per their expectations.

Be a responsible employer and reward employees according to their abilities and

performance.

To be a good corporate citizen in order to fulfill its social responsibilities.

To create and foster a network of researchers, engineers, who will make unique

contribution to the development of motorcycle industry ensuring satisfaction of our


valuable customers and protection of the environment by producing emission friendly

green products. ”.

The Honda Company‟s purpose is indispensable to all Honda associates, when it comes to

understanding the reason for the existence of the company. Top management at AHL try to

ensure that mission statement:

a) Is appropriate to the purpose of organization.

b) Includes commitment to comply with requirements and to continually improve the

effectiveness of quality management system.

c) Provides a framework for establishing and reviewing the specified objectives.

d) Is communicated and understood within the organization.

e) Is reviewed for continual suitability.


STRATEGIC GOALS

Customers

Our customer are the reason and the source of our business. It is our joint aim with our

dealers to ensure that our customers enjoy the highest level of satisfaction from use of Honda

Motorcycles.

Quality

To ensure that our products and services meet the set standards of excellence.

Local Manufacturing

To be the industry leader in indigenization of motorcycles parts.

Technology

To develop and maintain distinct business advantages through continuous induction of

improved hard and soft technologies.

Shareholders

To ensure health and viability of business and thus safeguarding shareholders interest by

maximizing profit. Payments of regular satisfactory dividends and adding value to the shares.

Employees

To enhance and continuously up-date each member‟s capabilities and education and to

provide an environment which encourages practical expression of the individuals potential in

goal directed team efforts and compensate them attractively according to their abilities and

performance.

Corporate Citizens

To comply with all government laws and regulation, to maintain high standard of ethics in all

operations and to act as a responsible members of the community.


QUALITY POLICY

Commitment to provide high quality motorcycles and parts.

Right work in first attempt and on time.

Maintain and continuously improve quality.

Training of manpower and acquisition of latest technology.

Safe, clean and a healthy environment.

Market leadership and prosperity for all.


MAIN PRODUCTS ATLAS HONDA

CD 70

Honda CD 70 is the first choice in motorcycles. The New CD 70 gives a perfect blend of

Japanese technology along with charismatic design, in addition to its established superiority

in terms of durability and fuel economy.

Further, 3 years engine warranty not only provides peace of mind to its valuable customers

but also the best value for their money.

New CD 70 is an ideal

combination of attractive

design with super econo-

power and smoke-free 4-

Stroke engine, which

promises you the most

economical ride of your life.

The new eye-catching

graphics, comfortable new

seat design and aerodynamic

shape have made Honda CD

70 best choice and a perfect

partner. Further, high resale

value of Honda CD 70

proves to be a life time asset for its customers. Atlas Honda‟s extensive dealership network

makes the motorcycle and its parts, available at your doorstep and its countrywide warranty

facilitate provide you trouble free companionship.


CD 70 DREAM

A new motorcycle regime has arrived… The Honda CD Dream

making every dream of the youth come true Sleek, sporty, stylish design all with an amazing

feeling of individuality

Powered by a superior and

durable Econopower engine

that‟s engineered with

technology, delivering

exceptional fuel efficiency

and is environment friendly.

Strong rear wheels and a

comfortable seat ensure a

thrilling driving experience.

This is why we say… Chalao Apni Dream!


CG 125

Honda Motorcycles are defined by Quality, Performance, Speed, Economy Petrol and Re-sale

Value. All these have managed to successfully bag your trust on the New Honda CG125. It is

a stunning result of

advanced Japanese

technology and right up

there as an outstanding

performer representing

all the qualities that make

Honda motorcycles so

special.

The 125 cc 4-stroke

engine generates 11-

Horse Power with low fuel consumption. It is ideal for high speed, long runs and rough

pathways.

Honda CG125 has a CDI Ignition System and a 12-volt battery (instead of 6-volt). The

headlight and indicators are brighter, with an easy starting-up of the engine.


DELUXE 125

The Deluxe is the unique

combination of power &

style, a new addition in the

company as 125 cc. The

new power up 4 stroke

engine gives same fuel

economy as CG 125. An

ideal model for youth and

high income segment.

Honda Deluxe has heavy

duty front absorbers and

130 mm brake drum with environment friendly non-asbestos brake shoes, Elegant contoured

seat for better riding posture.


MARKETING MIX

There are four elements of marketing

1) Product

2) Price

3) Place

4) Promotion

1. PRODUCT

Atlas Honda has two basic products

Honda CD 70

Honda CG 125

Both of them are the four stroke motorcycles. Both the products have a good repute in the

market and that is the reason that Honda has approximately 63% market share now a days.

The basic reason of the success is the quality maintained by the company throughout its

career.

These two models of HONDA are being manufactured in Sheikhupura and Karachi. Each

plant has a capacity to produce 250 motorcycles per day, but still the market demand is not

being fulfilled.

In order to increase market share marketing department perform following activities

New model

Changes in design

In-house production


NEW MODEL

In order to get more market share atlas Honda has been introducing new models over the

time. The latest model was launched by company in 1992-93. Previously there was a small

fuel tank but in the new model company introduced a large fuel tank as compared to the

previous one. But the company always maintained the quality of its motorcycle.

CHANGES IN DESIGN

There was a great demand from the customers to launch a new model but it is a difficult job

to launch a new model so in order to fulfill the customer wants the company has a policy to

change the stickers of fuel tank and side covers and some other nominal changes in indicators

headlights etc. time by time, in order to satisfy customers needs. But the engine and other

main accessories are the same.

INHOUSE PRODUCTION

At the outset of company 90-95% parts were imported from Japan and were assembled in

Pakistan. With the passage of time company introduced the concept of localization.

Company encouraged the local vendors and suppliers to produce the parts of motorcycle

according to the level of Honda international. So in order to maintain the quality, the parts

made by local vendors were approved by the Honda international and then they were used in

local production. So now Atlas Honda has managed to localize almost 89% of the parts. Still

11% parts are being imported from Japan. Atlas Honda also provides assistance to their

vendors to maintain high quality. They send their engineers to check the quality and to train

the vendors in order to produce the required qualitative product. This all is done under the

head of marketing department.


COMPETITORS BRANDS & MODELS

Yamaha

Yb-100

Excellence

Yama-4

Suzuki

SD-110

SD-Flash

Sohrab

JS-70

JC-125 (china)

Saigol Qingqi

PH-70

Hero

RF-70

RF-125

Star

DS-70

C-70 (CBU)

Lifan

LF-70

LF-150

Jailing

JH-70 (Remote-Self)

JH-70 (Without)


2. PRICE

Atlas Honda has four products and their prices are as under

Honda CD70 Rs. 63500

Honda CG 125 Rs. 103400

Honda Deluxe 125 Rs.124000

Honda CD 70 Dream Rs.67500

The company uses the single price strategy. It means the product has the same price all over

the Pakistan.

Initially Atlas Honda was the only producer of qualitative four-stroke motorcycle in Pakistan.

So they were taking the advantage of this monopolistic situation and using the price

skimming strategy and were charging higher prices.

Till 17th may 2003 company had the high prices for its motorcycles. Due to these high prices

the competitors found a gap and entered into the market with low prices and start capturing

market share. After the intense research work Atlas Honda was in a position to reduce prices.

The major objective to reduce the prices was to increase the market share and to utilize full

production capacity. So company has reduced Rs. 10,000 in HONDA CD70 and almost Rs.

5000 in CG 125.


COMPETITORS’ BRAND PRICES

Yamaha Rupees

Yb-100 61800

Excellence 62500

Yama-4 63300

Suzuki

SD-110 64000

SD-Flash 76500

Sohrab

JS-70 43500

JC-125 (china) 62000

Pak hero

PH-70 42500

Hero

RF-70 46000

RF-125 70000

Star

DS-70 40400

C-70 (CBU) 52000

Lifan

LF-70 40000

LF-150 85000

Jailing

JH-70 (Remot-Self) 46000

JH-70 (Without) 42000


3. PROMOTION

Promotion mix is

Advertisement

Sales promotion

Personal selling

ADVERTISEMENT

Atlas Honda uses the print media as well as electronic media for advertisement. In print

media the company gives advertisements in newspapers and it also uses billboards on the

road side for the promotion of the product.

On electronic media, company gives their advertisement on GEO channel during hourly

news. Company has a contract with AdCom (advertising agency) for all of its advertising

activities.

SALES PROMOTION

Atlas Honda also promotes its product through different sales promotional activities.

Company sponsors different functions and activities in main cities.

Company provides rewards and incentives to their dealers on achieving targets. Company

sends their successful dealers to different trips all over the world.

PERSONAL SELLING

The company does personal selling as well, not to individuals but to institutional customers.


4. DISTRIBUTION

Atlas Honda gained good market share due to its strong distribution network. For distribution

atlas Honda has divided the whole country into two regions.

1. South region

2. North region

SOUTH REGION

It includes following territories

Karachi

(Karachi region covers whole Sindh province)

Quetta

(This covers whole Baluchistan province)

NORTH REGION

It includes following three territories

Multan

(Its includes all lower Punjab cities)

Lahore

(It covers cities from upper Punjab)

Rawalpindi

(It covers Islamabad and NWFP.)


“5S” DEALERS

This is a new emerging trend set by atlas Honda. Now days the company is emphasizing on

“5S” facilities to their customers through “5S dealers”.

5s stands for the following five facilities

1. Sale

2. Service

3. Spare parts

4. Special sale

5. Second hand sales

SALE

It includes only the sale of new motorcycles.

SERVICE

It includes after sale service to the customers like Warranty claims, Tuning of motorcycles,

Repair of motorcycles etc.

SPAREPARTS

Company provides spare parts facility to their customer.

SPECIAL SALE

It deals with the credit facility. In special sale, the dealer provides the customer with credit

facility at his own behalf. Atlas Honda does not provide any support for credit sale.


SECOND HAND SALE

Dealer also deals in second hand Honda motorcycles. The company wants that the customer

might not switch to other brand even in second hand motorcycles.


PRODUCTION CAPACITY IN PAKISTAN OF 2 WHEELS

Company Capacity

Atlas Honda Ltd. 750,000 units

Dawood Yamaha Ltd 200,000 units

Suzuki Motorcycles Pakistan

Ltd. 65,000 units

Saigols Qingqi Motors Ltd. 100,000 units

Sohrab 42,000 units

others 400,000 units

48%

13% 4%

6%

3%

26%

PAKISTAN PRODUCTION CAPACITY

Atlas Honda Ltd.

Dawood Yamaha Ltd

Suzuki Motorcycles PakistanLtd.

Saigols Qingqi Motors Ltd.

Sohrab

others


SWOT ANALYSIS

STRENGTHS

A cordial, friendly and frank environment free of any communication gaps.

MBO (Management by Objectives) – Targets for the future are set well in advance by the

management at Atlas Honda, which provides the employees with goals to work upon and

improve any shortcomings.

Punch Card system, which creates a sense of accuracy and responsibility in the employees

to reach on time and helps to maintain discipline.

A standardized uniform for all, which removes any possibility of discrimination and

promotes cordiality.

Job Rotation is practiced on a regular basis aiding the employee to add to his skills.

Kaizen (Japanese principle of continuous improvement) and Ala Mayar (quality

standards) strictly followed. This makes sure that the organization and the team at Atlas

Honda, keep improving themselves and their surroundings.

Well-established brand name in the market.

Maximum employee satisfaction – Turnover less than 1%

Adequate exposure to the surroundings to newly recruited employees before assignment

of work responsibilities.

Continuously growing demand for Honda motorcycles all over Pakistan.

Expanding network of dealers and service facilities.

Committed management and a dedicated workforce.

Transparent and merit-based selection program for new employees.

WEAKNESSES

Inadequate backup strategies and planning for unforeseen and unpredicted competition.

Lack of an established Marketing Research department, therefore lacking in proper

forecasting of future activities.

No major changes to existing models or introduction of a new model since past few years.

Lack of advertising campaigns for promotion of the product and entering newer markets.

Lack of extracurricular activities and sponsorship for sports etc.


OPPORTUNITIES

Huge market size covering all of Pakistan, with lots of un-ventured markets needing focus

and attention, for development into future profitable territories.

Population growing and youth need to be focused on, as future prospects of motorcycle

customers.

Poor quality and performance of Chinese motorcycles can be enchased by Atlas Honda,

to project their ever improving quality and sustainability to the customers.

Various successful ERP implementations in organizations, supporting need for

implementation at Atlas Honda, aiding smooth and efficient flow of business processes.

Low prices by competitors induced Honda to decrease its prices resulting in excess

demand for the market leader, expected to grow at a larger scale.

Ever increasing media for advertising provides Honda with opportunities to project itself

in the best-suited way to its prospect customers.

Growing second hand exchange of Honda motorcycles due to the cost factor. Honda

dealers now practice this process, which gives Honda great deal of control over its

circulation of motorcycles in the market.

THREATS

New Entrants such as the growing brands of Chinese motorcycles in the market pose a

serious threat for Honda but due to the fact, that Honda has reduced its prices, they have

increased their market share.

Political Instability and Unhealthy Law & Order Situation are also a major threat for

Honda. Honda customers are reported to have said that they were robbed of their

motorcycles after just having taken the motorcycle out of the factory. Honda is reported

to have lost quite a great deal of market, especially in Karachi, due to these snatchings.


BIBLIOGRAPHY

As the data for Pakistan automobile market and especially the motorcycle market is skater on

the cyber space so here are some links from which data about the particular market obtained.

https://en.wikipedia.org/wiki/Atlas_Honda

http://atlashonda.com.pk

https://www.facebook.com/Atlas.Honda.pk/

https://en.wikipedia.org/wiki/Atlas_Honda

http://atlashonda.com.pk/

https://www.facebook.com/Atlas.Honda.pk/

atlas honda report

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