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.