Automotive industry is facing a dreadful downfall in sales due to factors including fluctuating exchange rates, imposition of new tax & duties resulting in constantly rising car prices that have pushed the prices of cars beyond the reach of masses.
Related: Car Sales Decline: Segment-Wise Data
Honda Atlas, the smallest player among the Big 3 seems to be at the receiving end of the stick and is suffering the most in these crucial times. As of the first two months of this fiscal year 2019-20 Honda has managed to sell just 3,008 units of Civic, City and BR-V combined, compared to 8,942 units sold in the same period in previous year. This is a massive -66.3 % reduction in sales for the Japanese automaker operating in Pakistan since 1994.
Keeping BR-V aside which too saw a worrisome -48% decline in sales from 864 units in July & August 2018-19 to 450 units in the first two months of FY2019-20, the combined figures of Civic and City sedan however saw a whooping -68% decline from 8,078 units in the first two months of previous fiscal year versus just 2,558 units sold in July & August 2019 combined.
In August 2019, Honda managed to sell only 1,106 units of Civic & City combined which is -24% less that what it sold a month earlier in July 2019. It is imperative to mention that Honda Atlas had stopped disclosing individual sales figures of Civic and City since 2015 so one cannot get an idea of how each of these cars is performing in terms of sales.
Nevertheless sales were improving ever since the 10th generation Civic was introduced in 2016. This helped Honda to sell 37,004 units of Civic & City combined in 2016-17 which was a 44% increase from 25,726 units in 2015-16. Then Honda recorded its peak sales in recent years with 42,810 units sold in FY2017-18 which declined -8% to 39,189 units in FY2018-19.
Honda’s poor sales performance is mainly attributed to rising prices due to imposition of FED and lack of small cars in their lineup. The company has also been dragging the 5th generation City model since 2009 which is now a 12 year old car in international markets. This City got replaced with the 6th generation model back in 2013 and is about to be replaced with 7th generation model towards the end of this year. Honda City remains among a few cars sold in Pakistan that doesn’t even offer a single airbag in its entire range.
The current range of local assembled Honda cars in Pakistan retails at:
|Honda Civic 1.5 Turbo RS||PKR 4,399,000|
|Honda Civic 1.8 i-VTEC||PKR 3,499,000|
|Honda Civic Oriel 1.8 i-VTEC||PKR 3,749,000|
|Honda City 1.3||PKR 2,309,000|
|Honda City 1.3 Prosmatec||PKR 2,489,000|
|Honda City 1.5||PKR 2,369,000|
|Honda City 1.5 Prosmatec||PKR 2,539,000|
|Honda City Aspire 1.5||PKR 2,539,000|
|Honda City Aspire 1.5 Prosmatec||PKR 2,699,000|
|Honda BR-V MT||PKR 2,749,000|
|Honda BR-V CVT||PKR 2,949,000|
|Honda BR-V CVT-S||PKR 3,099,000|
Honda has reduced its production operations by shutting down its plant for certain days; moreover the company is suffering from massive piled up inventories creating a huge backlog. Although the government has imposed restrictions on import of used cars but that’s not going to benefit Honda Atlas since bulk of these imports comprised of small cars which is actually considered Pak Suzuki’s domain in our market.
Analysts believe coming months are going to be even tough for local auto industry as sales generally become slower towards the end of the year. However with recent declining trend, it looks a daunting task for the local auto industry and Honda Atlas in particular to get back on track. Government needs to make serious measures to revive the auto industry before its too late.