Team Work

MR. UMAR SHAHID

063932056

MR SHAKIR MUSTAFA

063932061

MR. USAMA MEHMOOD

063932026

MR. SOHAIL AHMED

0639320 0

!REFA"E
We want to know the economical transport wheeler for the general public,so we choose the best company in field of transport .we also want to know the share of the 2 wheeler industry in the growth of economy. How it will knows the need of the people and how it satisfy the customer demand and how it is differ from others. This project includes the complete detail and full knowledge about the Pakistan largest transportation company Altas Honda. t includes economic, marketing, management and finance procedure prospecti!e. charge the prices of any good" And how to promote it" n future it will pro!e !ery benefit for us. t will not only help us but also helps others in making their projects. t also include how we should Where we should place it"

TA#LE OF "O$TE$TS

# ...........................................................Automobile ndustry $. ......................................................Atlas Honda %otorbike &. ...............................................................'ompany History ( ......................................................................%anagement #). .................................................................*wot Analysis #2. ......................................................................+', %atri#$. .....................................................rgani/ation Hierarchy #(.......................................................... Production *trength 2#. ........................................................0emand And *upply 21. ............................................................................*hifters 2&. ...............................'ircular 2low .f ncome And Product 23. .............................'ondition .f Honda n Product %arket $). ..................................................................2actor %arket $#..................................................................................4and $2.................................................................................4abor $$...............................................................................'apital $5.....................................................................6ntrepreneur $&......................................................................... %arketing $3....................................................................%arketing %i17. ............................................................................2inance 52. .......................................................................'onclusion

A"K$OWLED%ME$TS

We would like to thank "&. M'&amma( )o'*a+ and "&. M'&amma( )a,oo-. O/0er* Sa1eem Ra2a %oo(* Tra0*3or4 "o. 8official Atlas Honda9s Transportation: for their continued support in completing the project and cooperation in maintaining the high standard of e-cellence. We would also like to gi!e special thanks to Mr. Saa('11a& E5a2. A**6*4a04 Ma0a7er A(m60 8 I0('*4r6a1 Re1a46o0* A41a* Ho0(a L4(. helped us in getting data and complete information about company. At the end we would also like to acknowledge M*. S&e&1a S&oa6-, Re*o'r9e !er*o0. Who con!inced our abilities, enthusiasm and energy will secure a successful future. This learning e-perience from this project will further help us in throughout in educational career. .

22

AUTOMO#ILE I$DUSTR)

The auto market is one of the largest segments in world trade. The annual si/e of automoti!e e-port trade in the world has grown to a massi!e le!el of o!er ;*< &)) billion, which accounts for about #) per cent of the world e-port. 'hanging models, impro!ing fuel efficiency, cutting costs and enhancing user comfort without compromising =uality are the most important challenges of the auto industry in a fast globali/ing world. Hence there is a need for e-ploring the industrial complementarities in the region for better =uality, fa!ourable costs, fuel efficiency and attracti!e designs. Therefore, the re=uirement of information e-change in the region is much more pronounced now than e!er before for keeping the auto industry afloat and competiti!e. !ak6*4a0 O:er:6e/

22

*ince its independence in #713, Pakistan has been able to transform itself to a large e-tent, from a completely agrarian economy to a fairly de!eloped techno>industrial base. +esides te-tiles, items Pakistan9s as e-ports are largely and manufactured such consumer durables

engineering products. Howe!er, it is also a fact that Pakistan has not been able to reali/e its potential due to internal and e-ternal compulsions and thus it lags behind many

de!eloping countries of the world. The following economic indicators constitute the tell>tale of Pakistan9s de!elopment performance?

A'4omo-61e I0('*4r; o+ !ak6*4a0

$$

The e-isting population of automoti!e !ehicles in Pakistan is $.7 million. The annual demand is estimated at $)),))), two thirds of which is being met from local sources and imports and the remaining one third is left unmet. The market !alue of automoti!e !ehicles in dollar terms is estimated at more than # billion, out of which import constitutes around ;*< 2)) million. The after market of auto parts is estimated at ;*< 5)) million, tables? imports and local production taken together. Production figures of automobiles are gi!en in the following

Pakistan9s strength of production elements lies in its !ast reser!oir of land, labour and e!en capital. +ut technology and purchasing power of the consumers are its major weaknesses. Technology re=uirements are being met by joint !entures and technology tie>ups with foreign players in automoti!e sector. @apanese, Aorean and 6uropean entrepreneurs ha!e in!ested almost ;*< #.5 billion in Pakistan9s automoti!e sector. The 11

local in!estment in the automoti!e sector is appro-imately ;*< # billion.

T&e %ro'3 Atlas Honda 4imited is a joint !enture between the Atlas ,roup and Honda %otor 'o., @apan. The foundation of the Atlas ,roup was laid in #7&2 with the establishment of *hira/i n!estments 8P!t: 4imited with a capital of half a million rupees and three men doing business in trading shares and real estate. The growth of the Atlas ,roup is the result of its focus on good corporate go!ernance. Today Atlas is a di!ersified group dealing in engineering, financial ser!ices and trading. t consists of se!en public limited companies out of which si- are =uoted on the *tock 6-changes in Pakistan, and fi!e pri!ate limited companies. Atlas shareholders e=uity now stands o!er 25 billion rupeesB assets ha!e increased to o!er &) billion rupeesB personnel strength is o!er 3))) and annual sales ha!e crossed &) billion rupees. The ,roup paid ta-es of Cs. #5 billion o!er 2D of the total go!ernment re!enues. All this progress is due to the ,roupEs reliance on the intellectual capital, dedicated efforts and team spirit of all the

55

stakeholders. 6!ery member is stri!ing for e-cellence and taking pride in the ,roupEs motto? Or7a062a46o0 De:e1o3me04 T&ro'7& Se1+ De:e1o3me04

T&e "om3a0; The company was created by the merge of Panjdarya 4imited and Atlas Autos 4td. in #7((. +oth these motorcycle manufacturing concerns were established by the Atlas ,roup. Atlas Honda 'ompany. components collaboration manufacturers Honda and motorcycles The 'ompany !arious with like in>house leading *howa, 4imited markets in also in parts SHIEKHU!ORA manufactures

collaboration with Honda %otor manufactures hi>tech

Atsumitech, Fippon 0enso and Toyo 0enso. Honda motorcycles are by far the largest selling &&

motorcycles in the country with an unmatched reputation for high =uality, reliability and after>sales>ser!ice. Atlas has undertaken to de!elop local manufacturing

capabilities to the highest, economically feasible le!el. While a major role in locali/ation has been assigned to !endor industries, Atlas has the country9s largest in>house manufacturing capability at its Aarachi and *heikhupura plants. To support the production facilities, the company has KARA"HI !LA$T

established an CG0 wing and tool making facilities through '0A G 'A%, which are growing rapidly in si/e and function as the company e-pands. Atlas has managed to e-ecute #1 @oint HentureITechnical Assistance Agreements between local !endors and foreign manufacturers for transfer of technology. Atlas Honda is playing a pioneering role in creating conditions for easy and confident use of motorcycles all o!er the country. A !ast and growing network of o!er #&)) motorcycles sales ser!ice and spare parts dealers has been established. n order to back up this system, Atlas has set up Technical Training 'enters in Aarachi and 4ahore, which pro!ide se!eral courses of !arying duration and comple-ity for motorcycle mechanics and users each year. %obile training facilities take the latest know>how, technology and maintenance of motorcycles to major rural and urban centers around the country.

<6*6o0
33

%arket leader in the motorcycle industry, emerging as a globally competiti!e centre of production and e-ports.

M6**6o0
A dynamic, profitable and growth oriented company through market leadership, ma-imi/ing e-port and e-cellence in =uality and ser!iceB to ensure attracti!e returns to e=uity holdersB reward employees according to their ability and performanceB to foster a network of researchers and engineers ensuing uni=ue contributions to the de!elopment of the industryB customer satisfaction and protection of the en!ironment by producing emission friendly green products and to remain a good corporate citi/en fulfilling its social responsibilities in all respects.

O'r *1o7a0
2or Honda to remain Honda, and for e!eryone to reali/e their aspirations, we must belie!e in

=T&e !o/er o+

Dream*=

"om3a0; H6*4or; *ince its inception the company has e-perienced an unprecedented growth in its operations from a to (( small the manufacturing company

leading motorbike manufacturer of Pakistan. 2ollowing is the chronological order of the major e!ents in the companyEs history. 200 'ontribution to national e-che=uer reached Cs. $.#( billion > 32D of wealth generated, out of ,roup 3.5& billion 8#.1(D of the ,o!ernment total re!enues:. 4P0' project completed 8Few ,eneration implementation .f of Technology:. ,0' G 'ase *tared 0amper

Production Projects through *howa 'orporation, 2003 @apan. 4aunch 5)) A 'apacity 6-pansion Project. %ajor re>adjustment of prices to pass on the benefits to customers. +est 'orporate Ceport award by joint committee of Achie!ement of landmark 'AP G of '%AP. #)),))) sales

motorcycles. Technical agreement with Aeihin 8@apan: for %gf. .f 2uel 'ock Assembly. *witch 2002 Assembly 4ight G Winker J gnition 'oil. 0eletion le!el reached to (3D and ()D for '03) G ',#25 respecti!ely. ntroduction of ,ratuity *cheme for staff. +est 'orporate Ceport award by 2001 joint committee of 'AP G '%AP. 'oncept of 5* dealership > *ales, *er!ice, *pare Parts, *econd hand e-change and *pecial 8'redit: sales launched. Few +lock for hi>tech 2000 1999 engine plant. n!estment in 'rankshaft Project. T' Agreement with Toyo 0enso. *. 7))2 certification for both factories. 77

199> 199? 1995 199 1992 1991 1990 19>9 19>>

Few models 8%%': of '03) G ',#25 launched. n!estment in ,ear Project. 6-ports to +angladesh. 6-port Agreement signed with Honda %otor 'ompany 4imited. %r. Aawamoto President, Honda %otor 'ompany 4imited, !isited AH4. 'hange of name to Atlas Honda 4imited 8AH4:. nauguration of ',#25 6ngine Project at *heikhupura 2actory. %erger of Panjdarya 4imited into Atlas Autos 4imited. 6-port of built up motorcycles to Fepal. Production capacity e-pansion . @oint Henture agreement signed with Honda %otor 'ompany 4imited. nauguration of '03) 6ngine Project at Aarachi 2actory. Technical Assistance Agreement with *howa 'orporation. 0eletion Project financed by P ' '. 'ommercial Production started at

19>? 19>6 19>2 19>1 19?9 19?6 1965 196 1962

Panjdarya @oint

4imited. Production capacity e-pansion . ncorporation of Panjdarya 4imited as

Henture with Honda %otor 'ompany limited. Production capacity e-pansion . Public offering of *hares. 'ommercial Production started. Technical Assistance Agreement signed with Honda %otor 'ompany 4imited. ncorporation of Atlas Autos 4imited.

#) #)

MA$A%EME$T %aintaining a global !iewpoint we are dedicate to supplying product of the Khighest =uality yet a reasonable point for worldwide customer satisfaction. Honda remains its rich culture of customer satisfaction, it being ser!ing nation. 2or management we ha!e following our management strategy. Proceed always with ambition and youthfulness. Cespect sound theory, de!elop fresh ideas, and make the most effecti!e use of time. 6njoy your work and encourage open communications. *tri!e constantly for a harmonious flow of work. +e e!er mindful of the !alue of research and endea!or. Cespect for all L man has priority o!er others.

MA$%EME$T LIFE ")"LE !LA$$I$%

"O$TROLLI$% OR%A$I@I$%

LEADI$%

## ##

!LA$$I$%

Tra0*3or4a46o0* T/o W&ee1er Roa( Tra0*3or4a46o0

#e44er ,'a164; a4 e9o0om69a1 ra4e* !ro('9e (6++ere04 mo(e1* +or (6++ere04 9'*4omer*

!'r3o*e S4ra4e7;
O-5e946:e

!ro7ram*

"D ?0."D 100. "% 125

"D 100 E9o0om69a1 /64& *3ee( *3e96a11; +or m6((1e-a7e(. "% 125 S3ee( *3e96a11; +or )o'07*4er*. "D ?0 e9o0om69a1 *3e96a11; +or o1(6e* A1/a;* o0 46me #2 #2 RULES

!o1696e*

(e16:er; a0( re4'r0 o+ (e+e94e( 3ro('94* e04er4a60e(

SWOT
STRE$%HTS THREAD WEAK$ESSES O!!ORTU$ITIES

S4re074&*A
Mualified and well trained staff +iggest sale network +est production plant in the world 2inancial *trong +iggest market share People Trusted Products High Muality Products *. 'ertified

#$ #$

 Cesale !alue 'ustomer 'are 'ustomi/ed products +rand mage A!ailability of *pare parts +est deli!ery system 8Transportations:

Weak0e**e*
High Price of Products Political instability 4ow per capita income of public 4ess o!erhead rates of competitors ncreasing Prices of .il

Cising inflation

O33or4'0646e*
ndustry e-pansion Technology upgrading *trong Position %arket ntegration opening up
.pportunity growing in other countries

Fewly de!eloped AreasI%arkets 8e.g. ,awader:

#1 #1

 2a!orable go!t. policies +ig %arket 6conomy is e-panding T&rea4* 'hinese cheaper products challenges 2ree Trade G WT. *trong competition from competitors in near future nstability of ,o!ernment

High rate of Ta-ation +ad infrastructure

#"% MATRIB

H ,H "HI$ESE #IKES

4.W H ,H #5 #5 4.W

+( *( &( '( #( "( $( %( (

)& ,) *

&(

&#

*( &" &"

*( &"
Chinese Flow

'&

'*

&(

"%

$*

$# '*

$" )

$% ' #
(% ,( $

$( & #

%' %' *
(" ,( #

$# %# &
(# ,( '

$# %# '
(' ,( &E.

' "
)* ,) +

' #
)) )+ ,

'
(( ,( %

$% %" &

)) ,( (

CH/0ESE

1AMAHA

($ ,( "

S2324/

H50!A

OR%A$I@ATIO$ HIERAR"HE)

Chairman Board o !irectors Group Executive Committee Group Human Resource Committee Group System & Technology Committee Audit Committee Management Committee

The abo!e chart shows the centrali/ation in the industry. The main decision comes from the 'hairman of the company while +oard of 0irectors appro!es his decisions and this implement #& #&

in organi/ation by respecti!e committees. The +oard of directors is committed to good corporate go!ernance. The company is managed and super!ised responsibly and proper internal controls and risk management policy. ts procedures are in place for efficient and effecti!e operations of the company, safeguarding of assets of the company. This is compliance with laws and regulations and proper financial reporting in accordance with nternational 2inancial Ceporting standards. As a part of group corporate strategy it has fi!e committees at group le!el to guide the management in !arious key areas of the company9s operations ranging from Human Cesource, nformation Technology, Audit , 6n!ironment *afety and health. 2ollowing is summary of role and responsibilities of each committeeB

MA$A%EME$T !ROFILE
#OARD OF DIRE"TORS 'hairman 'hief 6-ecuti!e .fficer 0irectors Nusuf H. *hira/i *a=uib H. *hira/i Aoji Faka/ono Furul Hoda *anaullah Mureshi *herali %undrawala Toshitsugu Aaneko Noshitaka Aitamura #3 #3

'ompany *ecretary PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP %ROU! EBE"UTI<E "OMMITTEE

Oaryab Tari=ue

This is responsible for setting o!erall corporate objecti!es and strategies, business identifying strategies opportunities, monitoring group G plans and de!eloping its group

members as leaders of their respecti!e fields. %ROU! EBE"UTI<E "OMMITTEE 'hairman %embers Aamir H. *hira/i 2rahim Ali Ahan ftikhar H. *hira/i @awaid =bal Ahmed *a=uib H. *hira/i *ecretary Theresa 0ias PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP

%ROU! HUMA$ RESOUR"E "OMMITTEE t determines the compensation package for the management staff. The committee has also responsibility to create and maintain conduci!e work en!ironment that instills trust and ensures respect fair treatment, de!elopment opportunities G grooming and make succession plan for all employees.

#( #(

%ROU! HUMA$ RESOUR"E "OMMITTEE 'hairman %embers Nusuf H. *hira/i Aamir H. *hira/i +ashir %akki PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP

%ROU! S)STEMS A$D TE"H$OLO%) "OMMITTEE The ,roup system and Technology committee is responsible to pro!ide an insight towards the !arious technological aspects of information systems. The objecti!e of the committee is to introduce leading edge technology and T initiati!e to automate information deli!ery and accessibility of data for enhancement of time and cost efficiency. %ROU! S)STEMS 8 TE"H$OLO%) "OMMITTEE 'hairman %embers *ecretary ftikhar H. *hira/i %ushta= Alam Oia ;llah +egg *arfra/ Hassan ________________________________________________

AUDIT "OMMITTEE This is most prime committee of board, which re!iews financial, and internal reporting process, the system of internal controls, management of risk and the internal and #7 #7

e-ternal audit processes. t also proposes the appointment of e-ternal auditors to the shareholders and is directly responsible for their appro!al and o!ersights of their work. An independent nternal Audit function reports to the committee regarding risks and internal controls across organi/ation. The audit committee re!iews reports from e-ternal auditors on any accounting matters than might be regarded as critical. The committee consists of three members including chairman of committee are non>e-ecuti!e directors. The audit committee meets three times a year and re!iew =uarterly, half year and annual financial statements besides internal audit plan, material audit findings and recommendations of internal auditor. AUDIT "OMMITTEE 'hairman %embers Head of nternal Audit *ecretary MA$A%EME$T "OMMITTEE t acts at the operating le!el in an ad!isory capacity to '6.. t pro!ides recommendations relating to the business and other corporate affairs. The committee has responsibility for re!iewing and forwarding long>terms plans, capital and e-pense budget de!elopment and stewardship of business plans. t is also responsible 2) 2) for maintaining healthy *anaullah Mureshi *herali %undrawala Furul Hoda Aamir *hakoor Ahan Ashfa= Ahmad

en!ironment within and outside the company through its en!ironment friendly products. MA$A%EME$T "OMMITTEE 'hief 6-ecuti!e .fficer Hice President %arketing Hice President Technical 'hief 2inancial .fficer ,eneral %anager Plants ,eneral %anager 'A%A ,eneral %anager 0e!elopment ,eneral %anager Human Cesource ,eneral %anager T ,eneral %anager 4ogistic PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP *a=uib H. *hira/i Furul Hoda Toshitsugu Aaneko *uhail Ahmed Amir Awan %a=sood A. +asraa Noshitaka Aitamura Caffat =bal %ushta= Alam Talha *aad

,eneral %anager Muality Assurance 4t. 'ol. 8C: *ultan Ahmed

2# 2#

!RODU"TIO$ STRE$%TH Atlas has undertaken to

de!elop local manufacturing capabilities to the highest, economically feasible le!el. While a major has to Atlas has role in locali/ation assigned industries, been !endor the country9s largest in>house

manufacturing capability at its Aarachi and *heikhupura plants. To support the production facilities, the company has established an CG0 wing and tool making facilities through '0A G 'A%, which are growing rapidly in si/e and function as the company e-pands. Atlas has managed to e-ecute #1 @oint HentureITechnical Assistance Agreements between local !endors and foreign manufacturers for transfer of technology. +esides, Atlas has directly e-ecuted 5 @oint HentureITechnical Assistance Agreements other than Honda. n #771, the plant was constructed with installed capacity of 5,))) units on single shift basis. This moderate capacity continued to cater to the business re=uirements for some years. 2or the last couple of years, due to rising demand, the 22 22

immediate e-pansion was ine!itable. Thus the paint shop, being bottleneck of the process, was e-panded with installation of another paint booth at a capital cost of Cs #(5.) million in order to enhance the production capacity. 0ue to this e-pansion, coupled with the double shift operation and e-tended process efficiency, now the plant has annual capacity of $),))) units on double shift basis against #2,))) units last year.

The e-pansion of the capacity was inaugurated on 0ecember 2), 2))1. After running on trial basis for a couple of weeks, the plant started operation on double shift basis from *eptember 2))1 and gradually monthly production was increased to 2,1)$ units in 0ecember 2))1. Fow onward, on an a!erage, the company plans to produce 2,5)) units monthly. The paint shop e-pansion yielded di!idend, as the =uarterly production showed $$.(D and 2$.)D increase in the third and fourth =uarters respecti!ely. !ro('946o0 "a3a964; 60 !ak6*4a0 The Atlas Honda has largest production capacity in Pakistan about 1)),))) annually. 2ollowing is Honda9s production with ratio to other manufacturers in Pakistan.
'ompany Atlas Honda 4td. 0awood Namaha 4td. *u/uki %otorcycles Pakistan 4td. Production 'apacity 1)),))) 2)),))) &5,)))

2$ 2$

*aigols Ming=i %otors 4td. *ohrab

#)),))) 12,)))

Source: Pakistan Automotive Manufacturers Association

This is graphical representation of Production capacity of Honda with respect to other manufacturers.

Production Capacity in Pakistan

%$6 +6 '6 '(6
Atlas Honda 7td8 !a9ood 1amaha 7td8 Su:u;i Motorcycles <a;istan 7td8 Saigols =ing>i Motors 7td8 Sohra?

$'6

!ro('946o0 S4re074& o+ Ho0(a 2ollowing is table showing its ten years production and sale.

21 21

Near #77&> 73 #773> 7( #77(> 77 #777> )) 2)))> )# 2))#> )2 2))2> )$ 2))$> )1 2))1> )5 2))5> )& 2))&> )3

Productio n &(,&$3 &$,1&$ 57,&$7 57,$53 3(,$73 7),### ##5,721 #7),&37 2(3,23# $&),5&# #$&,)5)

*ale Q Q &#,5$& 5(,537 3(,)&2 7),)23 ##3,2) # #7),12 1 2(3,#3 2 $&),## ) #$5,5) 5

Source: Pakistan Automotive Manufacturers Association

25 25

Here is chart of its past years performance of sales G productionB

+((@((( *((@((( &((@((( '((@((( #((@((( "((@((( $((@((( %((@((( ( %) )&A )* %) )*A )+ %) )+A )) %) ))A (( $( ((A (% $( (%A ($ $( ($A (" $( ("A (# $( (#A (' $( ('A (& $( (&A (* Sales <roduction

Dema0( a0( S'331; S4ra4e7;

The two wheeler industry has continues to enjoy a period of growth since 2)))>)#. The strength of the demand can be judged from the fact that growth of 25 D on year to year basis was recorded despite the poor agriculture cop. .n an annual basis, ndustry sales now ha!e crossed &5),))) marks. A$$UAL) SU!!L) "HART
#((@((( "((@((( $((@((( %((@((( (
A) ) A) * A( % A( " A( ' %) )& %) )+ $( (( $( ($ $( (# $( (& A( *

Supply

2& 2&

Traditionally, the motorcycle sale has been directly linked to the performance of the agriculture sector. Howe!er, during the past few years the product has established itself as a necessity for a large segment of the urban population too. t is now well recogni/ed its sale as an indicator of the economy9s performance. The growth in sales has attracted all sorts of entrepreneurs to the arena. n addition to the manufacturers with long standing, and who are members of PA%A, new entrance from backgrounds and business interests ha!e started importing and assembling motorcycles. The difference in business practices has also effected the en!ironment of Rdoing businessS. Those who go strictly by the law are at distinct ad!antages as the slack and selecti!e applications laws lea!e them competing with !irtually an unorgani/ed that a!oid duties and ta-es with impunity. The difference in cost structures that ensue lea!es and une!en playing field for the organi/ed sector. A$$UAL) DEMA$D "HART
#((@((( "((@((( $((@((( %((@((( (
A) ) A( " A( % %) )+ $( (( $( ($ $( (# A( ' $( (& A( *

!emand B B

23 23

The company accepts the realities of a growing market and e-pects no more then a le!el playing field. .ne is glad to see that the go!ernment is finally pursuing this normally with !igour. A recent raid of ten units in the unorgani/ed sector, so far, has inearthed a huge ta- e!asion scam o!er # +illion penalties ha!e been assessed. Nour company continues insistence of ta- e!asion as the main cause of price differences has been pro!ed accurate. .ne hopes that will not only to reco!er from the e-isting ones the past e!asion but also from the close down fraudulent assemblers. Atlas Honda has in!ested and is continuation to in!est hea!ily in locali/ation. t has the strongest !endor base as well as the state of the art in house manufacturing capabilities. This is a result of decades of strong commitment to the locali/ation cause, %otorcycle industry has now reached a point where it has achie!ed production surpluses. Nour company has already established e-port markets but had production constraints that kept is from ser!ing these markets to their satisfaction. The company has now recei!ed global e-port rights for Honda '0 #)). This is recognition of o!er 1) years of consistent performance. t is indeed a huge leap forward for atlas Honda and is a larger commendation for the potential of Pakistan9s auto industry .in ne-t three years. Atlas Honda is targeting at least#)D of its sales to 2( 2(

come from e-ports. 2or this an enabling e-port policy is being pursued at the highest le!els of the go!ernment. FA"TORS EFFE"TI$% DEMA$D 8 SU!!L) Dema0( Fa94or*A !o3'1a46o0

As the population of the country is increasing the demand of the bikes are also increasing. I09ome

As income increasing, his purchase power will also increase. t will effect demand to increase. The purchase of the newly launched ', #25 model is decreased due to less per capita income. Fa*&6o0

Honda motorbikes are in fashion of Pakistan society. They are symboling of pride and good willing so its demand increasing day by day. %o:4 !o1696e*

*ince motorbike industry is emerging industry and 2.2 D of total economy depends upon Honda ndustry. *o ,o!t always makes fa!orable policies for the company. *o its demand is upwards. n short?

27 27

A11 +a94or* o+ (ema0( are +a:ora-1e +or 9om3a0;

S'331; Fa94or*A "o*4 o+ !ro('946o0

The company has best plant of the worldB it enables it to produce more products which co!er the people needs by adopting concept of R'ost 6ffecti!enessS. Te9&0o1o7;

As technology upgrade the =uality of goods increases. That9s inno!ate products which creates more demands thus resulting more supply. EC4er0a1 E0:6ro0me04 Fa94or*

Fatural ha/ards and disasters badly damage product deli!ery and production process which results in less supply. We ha!e seen recently the earth =uack which damaged the market. %o:4 !o1696e*

,o!t policies are always fa!orable for the %arket leader in Pakistan. Which take its supply to peak. F'4're eC3e94a46o0*

'ompany is e-cepting strong competition with its competitors especially cheap bikes of china. n future $) $)

they want to o!ercome the market so they will increase their supply.

TaCa46o0

,o!t has imposed huge ta- on Atlas Honda 'ompany. t is estimated that company pays $5 D annual as Ta- to go!ernment. This huge ta- increases the production cost which reduces its *upply.

Source: Honda Annual Report 2006

$# $#

"IR"ULAR FLOW OF I$"OM A$D !RODU"T

F60a1 *er:69e*

!ro('94 Marke4 A41a* Ho0(a

S'331; o+ F606*&e( *er:69e*

"'*4om er Se94or D!ro:6(e Mo4or-6 ke*E

I04erme(6a4e *er:69e* !ro('946:e *er:69e*

!ro('946 o0 Se94or DE0760e 8 "&a*6*E Fa94or Marke4 DL.1.K.E E

Mo0e ;

Mo0e;

$2 $2

"o0(646o0 o+ Ho0(a 60 !ro('94 Marke4

Atlas Honda is the leader in motorcycle industry. t is selling three products named as '0 3), ', #25 and '0#)) respecti!ely. '0 3) and ', #25 are old brands while '0#)) was launched on ## .ctober 2))1 in 4ahore on #$ .ctober 2))1 in Aarachi. MOTOR")"LE MARKET <FS HO$DA MARKET SHARE

$$ $$

t has market share of 5& D currently. t is the biggest manufacturer of motorcycles in the country. 4ast year it produced #,7),$75 bikes. t means company achie!ed &2 D growth in production. Fow according to the increasing demand and market it has doubled its production capacity. The market si/e for two wheeler segment was around $1),))), while demand for Atlas Honda touched 2$),))). Parts of bikes are being manufactured (5 D locally. 4ast year an in!estment of 1 billion has come in the motorcycle industry, form that Atlas Honda in!ested 2.5 billion alone. Honda is a popular brand in the market and people want to buy it because of its =uality, durability, after sale ser!ices and good resale !alue. n the motorcycle industry Honda has become an aspiration group for those who ha!e some other brand. "om3e464or #ra0(*

n Pakistani motorcycle industry Honda is a leader. Although

$1 $1

there are 5) brands of bike are a!ailable yet many of them ha!e not got recognition among the people. All these e-ist in different segments of markets. )ama&a t is a basically two stroke #)) '' motorcycle. t is !ery popular in

!illages because people consider it more durable and a smooth dri!ing bike on rough roads. t is second second largest selling brand of Pakistan. So&rat is first Pakistani brand that was introduced. 2irst time it introduced hea!y bike look in a four stroke and 3) '' motorcycle. ts price is low as compare to Honda but. t is not direct threat for Honda. +ut to some e-tent people like it because it is rapidly increasing its =uality, after sales ser!ices and resale !alue. t is getting popularity in !illages. S'2'k6 t is third selling brand in Pakistan and it also targets the !illagers.

$5 $5

ts image is also appro-imately same as Namaha in the mind of people and it also targets the !illage areas

FA"TOR MARKET

$& $&

LA$D D1E

"A!ITAL DKE

FA"TOR MARKET

LA#OUR DLE

E$TER!E $EUR

La0(A

$3 $3

Atlas Honda has two plants in Pakistan at *hiekhupora and Aarachi. The area of *hiekhupora Plant is 23 Acres and the area of Aarachi plant is 5 acres. *heikupura plant is newly constructed. La-o'rA The company created a good en!ironment, new trees, green belts and grassy lawn ha!e been planted and de!eloped which ha!e been appreciated by those who ha!e attended the factory Honda 'ompany belie!es that when the organi/ation grows, the employ should also grow. 0uring the year 2))& the company put up a new factory and as a result #$# management associates were recruited. To train them the company arranged e-tensi!e in>house and e-ternal trainings. Atlas 2undamental 'ourse 8A2'>#: and junior management course for non>management and middle management associates respecti!ely. *uch acti!ities enable the new associates to mash into Atlas culture as well as learn sharp floor management skills. n all 1$& employees A2'># G @ course during year 2))&. 0uring the same year #2 employees were also sent abroad for training. The Traditional 2amily 0ay functions are being held at both plants which are well

$( $(

attended by families of associates. 'ompany also gi!e good performance awards to well performed employees. The labour of company are fully trained and 7$.1 D are literate. 2ollowing is the table showing data about education profile of company labour.

EDU"ATIO$ !ROFILES
S r. 1 2 3 5 6 ? > G'a16+69a46o0 "AFF"MAFA"MA Ma*4er* #a9&e1or* I04erme(6a4e "er46+69a4e* Ho1(erDT.T."E Ma4r69 M6((1e I1164era4e M7m4 2& #1$ 2($ (5 (# &3 >> > 6>5 $o0M7m4 > > 1 5 >> 2#7 (( &5 3>1 93.91 H 6.09 H To4a1 2& #1$ 2(3 7) (# 2(& (( &5 1.066

To4a1 L64era9; !er9e04a7e I1164era9; !er9e04a7e

P OFILE! !re*e04a46o0 60EDUCATIONAL "&ar4

CA,CCMA,ACMA Masters Bachelors

+6 $*6

&6 $6

%"6
$7 $7 $+6

/ntermediate Certi icates Holder-T8T8C. Matric Middle /lliterate

+6

+6

"A!ITAL
TE"H$OLO%) MO$E)

Mo0e;A The Atlas Honda company is part of Atlas strong ,roup group which is is financially The Pakistan.

company was established with a small amount of money.

2rom first day to now Honda stri!e hard time. n the begging company was established with a loan of 5&),))) and only three men working. Fow Honda9s annual share is Cupee &) +illion. Honda is sharing 2.2D of Pakistan9s ,0P. This indicates it has enough capabilities to face challenges and

1) 1)

hardships of Pakistan %arket. Honda power lies truly in his financial power and mass production which are from his group. Te9&0o1o7;A Atlas has the country9s largest in>house manufacturing capability at its Aarachi and *heikhupura plants.

To support the production facilities, the company has established an CG0 wing and tool making facilities through '0A G 'A%, which are growing rapidly in si/e and function as the company e-pands. Atlas has managed to e-ecute #1 Assistance Agreements between local !endors and foreign manufacturers for transfer of technology. Honda has world9s upgraded @apanese technology production plant. This enables them to enhance their production. +y adopting technology Honda is producing their best =uality products. Which helping them to increase their production and this makes them Pakistan9s %arket 4eader.

1# 1#

E$TER!E$UER

12 12

1$ 1$

MARKETI$%

MARKETI$% STRA%ET) The marketing team rightly takes pride in achie!ing an all time high sales. The real achie!ement of the company has been in shouldering its responsibility as the market leader in the growth of the total motorcycle industry. Atlas Honda has taken some tough decisions in enhancing the total customer base as well as dealing with the menace of the unorgani/ed sector. .n the achie!ement of the landmark, Atlas Honda with the support of its large supplier network readjusted its prices to pass on the benefit to its customers. .ther players followed suit and the unprecedented adjustment of prices changed the two wheeler market in the country in a way that has ne!er been seen before. The !olumes that ha!e now become possible will pro!ide the all>important base for more in!estment and e!en better =uality. n the process, Atlas Honda is now leading the two wheeler industry towards a path that will enable it to become globally 'ompetiti!e. The 'ompany will adopt the middle way of push and pull strategy because due to increasing demand

11 11

pull strategy is not suitable. *imilarly push strategy does not gi!e a good impression to the customer.

MAKETI$% MIB

15 15

!RODU" T

!RI"E

MARKET !OSITIO$I$%

!ROMOTIO$

!LA"E

!RODU"TS

1& 1&

%aintaining a global !iewpoint, we are dedicated to supplying products of the highest =uality yet at a reasonable price for worldwide customer satisfaction. 0uring the year 2))&, the company launched new models. n the #25cc segment Honda ',>#25 0elu-e was launched. %odern styling, added power and a disk brake function has made it the choice purchase for a selected segment that was looking for added !alue in the e-isting popular ',>#25. n addition to this, the regular ', #25 also underwent a %inor %odel 'hange 8%%': which pro!ed to be huge success. A 5$ growth in sales on year to year basis in the #25 cc category is a testament to the success of the new model and the ',>#25 %%'. The %%' has been a major success and Honda '0>3) is the best selling motorcycle in the market =with sales of o!er $)),)) annually. A 25 D increase to last year is a measure of popularity of this model. 'urrently we ha!e following products to fulfill the needs of market. Honda '0 3) Honda '0 #)) Honda ', #25

13 13

HO$DA "D ?0 Honda '0 3) is the Fo. # choice in motorcycles. n addition to its established superiority in terms of great speed and fuel economy, the Honda '0 3) is presented with special featuresB

The new attracti!ely designed '0 3) Aerodynamic shape *uper econo>power *moke>free 1>*troke engine *pecial Honda #2>!olt '0

technology. Few eye>catching graphics, 2ront and rear mud>flaps 'omfortable seat and the new utility boHigh resale !alue 6-cellent petrol a!erage makes 6asily a!ailable spare parts

1( 1(

Ho0(a "% 125 Honda ', #25 is the ideal combination of elegance and power. ts speed and performance symboli/es the true essence of modern life. t has following featuresB #25 cc 1>stroke engine ##>Horse Power 4ow fuel consumption. '0 gnition *ystem #2>!olt battery 8instead of &>!olt:. +righter indicators 6asy starting>up of the engine. deal for o High speed o 4ong runs o Cough pathways. Headlight and

17 17

HO$DA "D 100 Honda %otorcycles are defined by Muality, Performance, *peed, 6conomy Petrol and Ce>sale Halue. All these ha!e managed to successfully bag your trust on the Few Honda '0#)). t is a stunning result of ad!anced technology there the as performer Honda special. +igger Headlight and an @apanese right up all so outstanding that make

representing motorcycles

=ualities

5) 5)

'atching stylish look 4ow oil consumption 6asy go

!RI"E
Atlas Honda products are well known due to its =uality and reliability. 'ompany commitment is not to just sale products for profits but =uality which enables us to win the confidents of people and customer satisfaction.

2ollowing are our prices of our products. %.064 Honda '0 3) 5# 5# PC '6 Cs. 51)))

Honda '0 #)) Honda ', #25

Cs. &1))) Cs. 3#)))

!LA"E

Atlas Honda has de!eloped Pakistan9s largest a+4er *a1e *er:69e* 0e4/ork. The company has made its # to 5 * dealers through out the country. 52 52

These 5* stands for *ales *er!ices *pare Parts *econd Hand 6-change *pecial *ales 8credit:

According to the company these are not the simple selling points but these are the complete H.F0A 'ompany. The company has made 0ealer 0e!elopment 0epartment, which is responsible for the co>ordination with dealers and training of mechanics. The year 2))& saw impro!ement in almost all the major marketing areas. The 5T*9 dealer network was further e-panded dealers ha!e upgraded their dealerships to a modern, global standard. The resultant image enhancement in the eyes of the public has generated more customers for the company. The effecti!e media promotion has made your company and its products household names. The recall !alue of the promotion has been rated as one of the highest e!er. This policy has further cemented the !alue of the product and a greater number of first time users are now Atlas Honda customers. "O<ERS ALL !AKISTA$

5$ 5$

Atlas biggest

Honda sales

has

Pakistan9s The their

network. sale

company focused all o!er the Pakistan, products dealers. they by their authori/ed

De16:er; S;*4em *ince Honda 'ompany established, company has gi!en the contract to *aleem Ca/a ,oods Transports 'o. for deli!ering their products to their sales points. They ha!e !ery good relation with the company and they are contributing their best in growth of company.

!ROMOTIO$

51 51

The company focuses on its promotion campaign !ery seriously. There are se!eral internal and e-ternal programs to increase its sale. I$TER$AL !RO%RAMS Ser:69e De:e1o3me04 De3ar4me04 The company has made *er!ice 0e!elopment 0epartment, which is responsible for the co>ordination with dealers and training of mechanics. 0epartment conducts massi!e campaigns to familiari/e and train the ser!ice and sales dealers about the technical features of new models. n 2))&, there were different training programs. These attended by 7$# *er!ice dealers, () Antenna dealers and $&5) Honda 1 stroke mechanics. %oreo!er, 27& sales dealer9s staff and (5 %arketing staff of AH were familiari/ed with the features of new models. The company is mostly using push strategy to promote its motorcycles. As '0>#)) is their new product to promote it they force the dealers to keep a '0>#)) bike with them so that when customers come they offer him to try the new bike. The company is offering package to dealers that for e!ery 9-9 bikes of '0 3) or ', #25 you ha!e to take RyS

55 55

bikes of '0 #)). This also forces the dealers to try to sell this new product. Dea1er !romo46o0 2or the promotion of its dealers the company arranges meetings and buffet dinners. .ne promotion acti!ity was held on 23th of April 2))& in %ughal>e>A/am near uni!ersity campus. Te9&0696a0* Tra60607 2or the promotion of its products the company has trained 3))) mechanics. These mechanics are not only pro!iding repairing ser!ices to the people but also publici/e the products of company by word of mouth. EBTER$AL !RO%RAMS Honda 'ompany organi/es different types of promotion acti!ities, some of them are followingB

For 4&e 3romo46o0 arra07e* ra116e*.

o+

64*

3ro('94*

4&e

9om3a0;

5& 5&

!r604 me(6a
The company is gi!ing different types of commercials on different print periodicals. *ome are followingB

53 53

5( 5(

57 57

FI$A$"E
The 'ompany has strong financial position. The year 2))5>)& was a good yearB The 'ompany undertook se!eral major projects which were e-ecuted in a timely and cost efficient manner. The sales re!enue grew to Cs. #3.12 billion. This represents an increase of 2$.$3 D as against the pre!ious year9s Cs. #1.#2 billion. n the financial year 2))5>)&, your company continued to build on the successes of the pre!ious year by selling $&),#)( units as compared to 2(3,#(1 units in the corresponding period of 2))5 which shows 25 D growth.

The gross profit margin for the period slightly decreases to 7.$5 D from 7.52 D of the corresponding period. This was largely due to unprecedented rise in raw material prices and &) &)

utility costs. Howe!er, the net impact has been more or less offset by an increase in sales, !olume, benefits of locali/ation and efficient fund management.

O3era4607 EC3e0*e* The operating e-penses increased to Cs. 52(.$2 million as against Cs. 115.23 million for the same period last year. This escalation was in line with the increase in sales and the launching of new ',>#25 delu-e, a premium model. The increase in interest rates and additional borrowing for capacity e-pansion and new projects led to an increase in financial e-penses to Cs. #5#.&# million. The company had budgeted this rise feels comfortable with the current capital structure ot finance its growth. The company earned e!er highest profit before ta- of Cs. #,)13.)& million as against Cs. 7)5.&$ million for pre!ious year a bottom line growth of #5 D. %o:4. EC3e0(64're* The company paid ta-es to national e-che=uer amounting to Cs. 5.)$1 billion which are higher e!er. .n account of sales ta-, income ta- and custom duties as against Cs. 1.5 billion contributed last year. Payment of these ta-es was more than 3.5 times the net after ta- earning. The company9s contribution to the national economy by way of !alue &# &#

addition this year amounts to 3.)1 billion 3#.1& D of net receipts from operations #$.& D higher as compared to last year.

"a*& F1o/A The cash flow generated through the operating acti!ities was Cs. 51$.(& million in 2))& as compared with Cs. #1(7.## million during 2))5. Fet income after ta- increased to Cs. &3&.($ million in 2))& from Cs. 573.#2 million in 2))5, reflecting higher !olume and growth on impact of 4ocali/ation.

&2 &2

The positi!e cash flow during the year was mainly deployed for capital e-penditure 8Cs. 2,#25.(&:, debt repayment 8Cs. 2$#.7( million:.

"o091'*6o0A The reduction in tariff rates liberali/ation and global image of Pakistan has resulted in substantial growth in foreign &$ &$

in!estment and e-ports. At the same time, there are significant challenges that can be a threat if not addressed timely. The company is faced with a great cost increase problem due to the continuous rise in input raw material especially steel prices, rubber and petroleum products. The year 2))5>)& turned out much as planned, although the task was made harder by the burden of global raw material price hike. Fe-t year will be a difficult year for the country economy. The business en!ironment and the economy are becoming more open and the business en!ironment more difficult. The automobile industry policy of deletion and RforcedS fitnessS. locali/ation ha!e been abandoned by the go!ernment. The implications are se!ere i.e. Rsur!i!al of n this en!ironment, competiti!eness is the key success factor. Howe!er, your company is well positioned in terms of capacity G efficiency. +arring any unforeseen economics adjustment, Atlas Honda should maintain its growth momentum. There is e-cepted strong competition from 'hinese and its @apanese competitors. *o Honda should reco!er from its internal and e-ternal e-penditures hence it would reduce cost of production. 'ustomers will buy more Atlas Honda in case if price still low. t is strongly belie!ed that under WT. agreements the de!eloping countries economies will be seriously affected. The auto industry, and especially the motorcycle industry, is poised for growth. The results speak for themsel!es. This is the time to further nurture the industry otherwise a great &1 &1

opportunity to di!ersify the industry will be lost to the country.

&5 &5

+ +4 .,CAPHN

Pakistan Automoti!e %anufacturer Association Atlas Honda Annual Ceports 82))2 to 2))&: %inistry of ndustry and Trade, ,o!t. of Pakistan Honda Web *ite www.atlashonda.com.pk Administration G ndustrial Celations 0epartment Atlas Honda 4imited

Aarachi *tock 6-change Trade 0e!elopment Authority

&& &&

&3 &3

&( &(