Atlas Honda (manufacturer of Honda motorcycles) in Pakistan, has shut down its assembly plants since last two days both in Karachi and Sheikhupura due to low sales of motorcycles in the market. The decision has been taken to control the expenses and the production volume as demand has fallen down by a great margin. Consequently, the overstock is reported in the plant which forced the company to slow down the production. According to reports, the dealers have been failed to maintain an optimum level of sales in the market. The manufacturing plants have been closed for the last two days and employees are on leave.
Just a week before elections, there were certain reports that motorcycle sale rate is going down in Pakistan because the people were investing more in property and gold etc which hindered the motorcycle sales. Those who want to keep themselves away from all forms of equities invested in banks’ savings account or saving certificates. Moreover, now when the new government is elected, the stock exchange is getting stable and investors are investing there. Not only, Japanse manufacturer – Atlas Honda – has decided to shut down its plants owing to low sale rate, while talking to Automark different Chinese auto manufacturer also reported the same issue and reportedly they already stop production of motorcycles twice a week since last few months. According to market sources, Atlas Honda has also decided to increase the rates of their motorcycles from August 1st from PKR 600-1000 on different models.
From last 3 month, Honda Production or sales rate has been consecutively dropped from 115972 in April, 104800 in May, and 91000 in June.
The Atlas Group was established with the incorporation of an investment company called Shirazi investments back in 1962 with an initial capital of Rs 500,000. Later that year, a technical collaboration agreement was signed with Honda Motors Company Limited (HMC) for the production and sales of motorcycles in Pakistan and as a result, Atlas Autos Limited was formed with manufacturing facilities located in Karachi. In 1979, another motorcycle manufacturing plant at Sheikhupura was established by the name Panjdarya Limited.
Atlas Honda is a market leader in the two-wheeler industry, today catering to about 60 per cent of all local motorcycle sales. Atlas Honda produces various value-added auto parts for in-house consumption and catering to the after-sale market. The company also exports motorcycles to Sri Lanka, Afghanistan and Bangladesh, currently, exporting between 4,000 and 5,000 motorcycles a year. It also has an established wide network of over 1,600 sales services and spare parts dealers.
However, the industry cannot sustain this shutdown for long and would have to lay off thousands of workers before Eid if the situation does not improve. Ultimately, it will put a burden on Pakistan’s economy. The auto dealers and govt should come forward to improve the sale and current situation of the industry.
by Aqsa Mirza