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Presented by:

Muhammad HaiderInternee-June-July 2015

Spare Parts Division

Internship Project

Atlas Honda Limited

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Contents........................................• Personal Statement• Introduction to Project• Industrial Review• Market Review• Consumer Behavior• Detailed Overview of Selected Companies• Comparative Analysis• Suggestions• Question & Answer Session.

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Personal Statement.......................• Student of BS(BA) Hons.

• At COMSATS Institute Of Information and Technology, Lahore Campus

• Last year, 7th semester

• Intermediate from Government College University, LHR

• Internee at SPD

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Introduction to Project• To explore the two wheeler automotive industry

in Pakistan.• To explore the spare parts markets in Lahore.• To study the market behaviour and market

structure.• To study the major market shareholders• To analyze the business competitors• To Identify gaps and suggest improvements

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Two Wheeler Industry in Pakistan• Pakistan motorcycle industry is flourishing as it met 95%

localization through state of the art technology implementation, billions of investment and hundred thousands of skilled work forces.

• Pakistan, motorcycles’ sales stood at 1.44 million units in first 10 months of FY14 according to Pakistan Bureau of Statistics (PBS) data.

• Presently there are 43+ motorcycle assemblers in the country.

3 Japanese assemblers (Honda, Yamaha and Suzuki)

40+ assemble Chinese motorcycles.

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Two Wheeler Industry in Pakistan• The motorcycle industry in Pakistan has recorded strong

growth over the past decade, mainly due to increased urbanization and induction of many new players in the market who are manufacturing and providing motorbikes at much cheaper prices, but nobody has been able to beat the market leader, Atlas Honda.

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Two Wheeler Spare Parts Industry in Pakistan

• Leading Industry like its mother industry of Motorcycles.• There are three types of business present in the

industry, all having its own perks and privileges. – Manufacturing and selling in Pakistan– Importing and selling in Pakistan– Importing and Manufacturing and selling in Pakistan

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Market Review• Closely located market• Major transaction in Lahore and Karachi.• Main Competitors

• Atlas HONDA• CRLF• ISH• Road prince

• Market Studied; Lahore• Macleod Road (Main Focus)• Lytton Road• Multan Road

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Market Presence

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Brand Number of Outlets

Market presence Approximated

Mix(others) 65 37%

Atlas Honda 42 24%

CRLF 23 13%

Road Prince 15 9%

ISH 5 3%

Yamaha 5 3%

Eagle Eye 4 2.50%

United 4 2.50%

Ravi 3 2%

Kclf 2 1.50%

Suzuki 2 1.50%

Quingqi 1 0.50%

RBX 1 0.50%

Sohrab 1 0.50%

Star Lf 1 0.50%

Totals 174 100%

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Consumer Behaviour• Consumer Demographics

Trait Detail

Gender Mostly males

Age 16years - 60years old

Geographic factor The market for spare parts is spread in all over the Pakistan with consumption increasing as you move towards more populated areas of Pakistan like Punjab and sindh.

Socio Economic factor

Mostly customer want low priced products but moderate price parts can also be seen in market .

Psychological Factor

The mindset of the customer is more price oriented then quality conscious, however there is a certain set of people which are quality conscious as well.

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Detailed Overview of Selected brands

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Crown Lifan (CRLF)• Lifan Group China made an agreement with Crown-

group Pakistan in 2003.• Now the parts of Crown Lifan are available in each and

every corner of Pakistan• Claimed Quality; just like Japanese parts• Cheap Pricing• Market Share: 35%• Distribution Channel: CRLF Family and on credit of 7-

17-21 days• Counterfeit: very low, and strong legal team.

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Crown Lifan (CRLF)• USP: CRLF Family• Marketing & Promotional Activities; Incentives,

shades, mechanics’ uniform, festivals celebrations, coolers, gifts, cakes on birthdays, foreign trips, dealer incentives, etc. In last year CRLF sponsored a group of 250 people to CHINA on a one week vacation and that trip is still very highly discussed and admired among the retailers and distributors in the market. According to the CRLF’s representative; OTHERS ARE DICTATORS, WE ARE EDUCATORS.

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Crown Lifan (CRLF)

• Strengths: CRLF Family• Weaknesses: Variety short any time• Opportunities: Local Production• Threat: Govt. Policies

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Ishiwachi (ISH)• ISH is a parts importing company with their products

coming from Malaysia, Taiwan, Vietnam and China. It was established in 2004

• Slogan of Quality• High Prices• ISH listed Atlas HONDA as the competitors in the market

as they claim that both the companies are working on quality.

• USP: No Compromise on quality

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Ishiwachi (ISH)• Marketing & Promotion: ISH is also doing detailed

marketing activities, they are working on mechanics, and they have these empty boxes schemes which are very popular in the market.

• Market Share: ISH enjoys 7-8% market share but is increasing day by day.

• Counterfeit: ISH is currently having no counterfeit in market, however there are risks in future.

• Distribution Channel:

Super Distributor Distributors Retailers

ISH deals on 70 % cash and 30 % credit business.

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Ishiwachi (ISH)• SWOT Analysis

• Strengths: Quality• Weaknesses: Distribution and dealer

Network• Opportunities: Regions Expansion• Threat: Local and low priced Industry

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Road Prince• Omega Industries came into existence in 1995. Today, It

is one of the top motorcycles & rickshaws manufacturer in Pakistan.

• Road Prince listed Crown Lifan as their competitors as they follow them in their marketing and pricing strategies.

• USP: Mechanics Contacts and Reward system• Market Share: Road prince enjoys 9%-10% of market

share.• Counterfeit: Road Prince have 12-13% counterfeit in

market, they have a legal team working on it.

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Road Prince• Marketing and promotions: Road Prince is investing

heavily in marketing and promotional activities, they have Cash prizes, gold coin schemes, UMRAH tickets and foreign tours for mechanics and dealers.

• Distribution Network: Mega Distributor -> Distributor -> Sub Distributor -> Retailer

They give their mega distributor a credit of 60 days.

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Road Prince• SWOT Analysis;• Strengths: Financial Strength/Credit limit• Weaknesses: Stagnant marketing styles &

strategies • Opportunities: Place to become market leader• Threat: Local Industry

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Atlas Honda •  Atlas Honda Limited (AHL) is a joint venture between

the Atlas Group and Honda Motor Co. Ltd., Japan. • Atlas Honda Limited offers state of the art OEM

standard Parts with precision technology for replacement market of all Honda Models produced indigenously. These spare parts are perfectly coordinated with one another and give safety, reliability and performance of optimum level.

• USP: Dealership and Service Network and high quality genuine parts.

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Atlas Honda • Marketing & Promotions: Atlas Honda Limited is busy

doing direct and indirect marketing and push and pull promotional schemes, they have discounts for dealers and mechanics, however a lack of incentives and gifts as compared to other companies.

• Market Share: Atlas Honda enjoys the market share of 24-25% in terms of sales in market.

• Distribution Channel: Atlas Honda Distribute its products centrally from Karachi office and through their dealership network mainly and also involving retailers as well.

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Atlas Honda • SWOT Analysis

Strengths: Quality and genuine products

Weaknesses: stagnant marketing strategies

Opportunities: 3 wheeler and car parts market

Threat: Counterfeit and local industry• Counterfeit: There is approximately 30-35% counterfeit

of Atlas Honda in market, according toofficials at atlas Honda they have a legal team to defend the copy rights and trademarks they have, but the problem seems to prevails.

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Price Comparison• Retail Price Analysis

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Price Comparison• Whole Sale Margin Analysis

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Price Comparison• Average Margin Given To Retailer

HONDA 30.4

ISH 24.6

ROAD PRINCE 28.2

CRLF 15.3

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Counterfeit• One problem that the automobile parts companies face

in the market is counterfeit; these are non original illegitimate and non genuine parts. After visiting the market following statistics were found:

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Brand Number of Outlets

Atlas Honda 35%

CRLF 3-4%

Eagle Eye 1%

ISH 1%

Kclf Nil

Quingqi 5%

Ravi 2%

RBX Nil

Road Prince 12-13%

Sohrab Nil

Suzuki 7-8%

United 1%

Yamaha 3%

Star Lf Nil

Mix(others) 20-30%

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Major Difference of Atlas Honda and Others

• To list down the major differences between atlas Honda and other companies, lets just see what SPD(Spare parts Division) is to Atlas Honda Limited.

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• Strategic goals of AHL 2015: To be the industry leader in indigenization of motorcycle parts.

• In 2015: The Spare Parts business registered an impressive growth of 28.8%

• Import of Parts: Due to imports of raw materials, plant and machinery, motorcycle parts and other related items, Company is sensitive to fluctuation in foreign currency.

• Financial Year Ended: Spare parts contribute almost 9% of the company’s sales revenue.

Major Difference of Atlas Honda and Others

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Things that are unique in AHL;• Atlas Honda has a well reputed name and a great

goodwill among the consumers in market.• Honda gives highest margin to its dealers to enjoy.• Atlas Honda has largest market presence of 24%.• Atlas Honda has the slogan of proved quality and 100%

genuine products.• Atlas Honda has a very strong distribution and retailer

network.

Major Difference of Atlas Honda and Others

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But, there are some short comings• Atlas Honda's spare parts are the highest priced parts in

the market. This may deprive company of the sale from the customers seeking low priced products.

• Atlas Honda have largest amount of counterfeit products present in the market, mainly because of the following reasons I identified– The brand name of Honda is sold a lot in market – The price of Honda is high in market so counterfeit will result in

more profits– Legal actions of Honda have been very soft in the recent past.

Major Difference of Atlas Honda and Others

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• Although u can see HONDA having highest or second highest sales in market, but the presence of counterfeit brings down the original sales of AHL.

• Atlas Honda has week and stagnant marketing practices.

• Atlas Honda has a NO credit policy in contrast to the market trend.

Major Difference of Atlas Honda and Others

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Suggestions

Do Marketing policies can be improvised

by getting more mechanic focused and by introducing more attractive schemes for them.

Atlas Honda have a large share in spare parts market but that is due to large number of motorcycles the brand cater in the market, however this is not the case with the other leading companies, by focusing more on non AHL bikes and their parts, HONDA can acquire more market share.

Don’t Let counterfeit product enter the market,

take necessary actions like legal proceedings, consumer education and security steakers etc.

Atlas Honda is an excellent company with a legacy of more than 50 years. However there are some things where I think the company should work more and by doing that the company can achieve more.

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Thank You AHL• Atlas Honda is a great corporate Giant, being part of it

was a wonderful experience.• I learned a lot in the professional environment of AHL

under the supervision of experienced employees.• Efforts of Sir Wajahat & Sir Asif are worth mentioning.• I explore practical aspects of the theoretical knowledge

gained in university.• I wish to work with AHL again in future,• Thank You…!!

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END…..!!!

Questions???

Comments!!!

Concerns;;;