Profile and History:

The Honda Motor Company is a Japanese based company. It’s President, CEO & Representative

Director is Takahiro Hachigo. And the global headquarters for the Honda Corporation are located in

Tokyo, Japan. The U.S. headquarters for American Honda Motor Co, Inc. are located in Torrance,

California.

The Honda Motor Company was founded by Soichiro Honda in October 1946. He was very

interested in automobiles from a small age so he used to tune cars and enter them into races

using his friend’s garage. As he grew up he decided to be in the automobile industry. He

once got a contract for supplying piston rings for major car maker Toyota.  But unfortunately

he lost the contract as his products did not match the required quality. So he went to various

factories in Japan looking for ways to improve the quality of the engines by making efficient

piston rings. Soon he was able to find a highly automated process to produce high quality

piston rings. Toyota was impressed by his product and bought it in 1941. Next he started a

company called Tokai Seiki in order to produce his products at a larger scale.  Soon Toyota

bought 40% of the company and thus Soichiro and the officials at Toyota could built a

lasting business relation. But a series of calamities damaged large portions of his company

and this forced Soichiro to sell the remaining parts of his company to Toyota. In 1946 he

founded Honda Technical Research Institute to sell customized bicycles with attached

motors. He had only 12 employees who worked in a 170 sq ft. area.

In 1949, after years of persistence Honda and his team were able to release the Model D

which was the first complete motorcycle they had made with their own parts. Soon the

demand for this low priced vehicle increased and by 1964 the Honda Company was the

World’s largest manufacturer of motorcycles. They did not stop there but tried out different

possibilities in that time period. In 1963, they were able to release their first ever four wheel

vehicle in the form of the T360 mini pick-up truck. Soon they went on to expand their range

of vehicles and they produced their first car called the S500 Sports Car. In 1986 they

ventured into luxury car segment and released the very successful Acura. In 1991 they

released the Honda NSX Supercar which was the first vehicle to incorporate the V6 engine

with the latest variable-valve timing. Their success had no limits here after as they kept

innovating and started producing scooters, engines, generators, motors and pumps

successfully. 

Honda has the reputation of being the largest producer of internal combustion engines

reaching an impressive figure of 15 million in 2012. It also is the eighth biggest automobile

manufacturer in the world, an industry into which it had a very late entry. In 2012, Honda

had more than $99 billion in revenues out of which $3 was the yearly profit. It has more

than 175,000 employees located in various parts of the World. As of 2013 it has released

more than thirty models of cars bettering its performance year after year. From producing

noisy scooters to making the finest cars on the planet, Honda has come a long way in

evolving as a company. It has been on the verge of sell out but has come back strongly to

cement itself as one of the biggest players in the international automobile market. It has held

its reputation of being the World’s largest motorcycle manufacture since it claimed that

position in1964. Today you cannot see many roads without seeing a Honda made vehicle

pass by. Honda has gone on to become a global superpower in the automobile industry.     

Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan.

The company was incorporated on November 04, 1992 and joint venture agreement was signed on August 05, 1993. The ground breaking ceremony was held on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was completed. The first car rolled off the assembly line on May 26, 1994. Official inauguration was done by then President of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr.Kawamoto, President of Honda Motor Company Limited Japan was also present to grace the occasion. The company is listed in Karachi, Lahore and Islamabad Stock Exchanges.

Vision Statement:

"Quality in all jobs: learn, think, analyses, evaluate and improve. Reliable products: on time,

with excellence and consistency. Better communication: listen, ask and speak up."

Mission Statement:

“Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality,

yet at a reasonable price for worldwide customer satisfaction."

Honda philosophy:

“Providing joys to the world through new challenges and the realization of dreams.”

Striving to achieve harmony with society:

“Honda wants to pass on the "joy and freedom of mobility to the next generation" (for our

children), therefore, the company wants to realize a sustainable society where people can enjoy

life (blue skies).”

Next dreams:

“Honda is studying human beings which would lead to new technologies and would support

people in their daily lives...”

Organizational Structure:

Market share and market development:

Pakwheels carried out a survey earlier this year, with a total number of respondents over 10k.

Brand’s Market Share:

Because we only have the “Big Three” companies with dealerships –Suzuki– being the cheapest, covers 33%, Toyota 28% and Honda has a market share of 25%. The remaining 14% cover all other brands. The order makes sense when you get to see people’s perception of overpriced brands, which puts Honda to the most overpriced brand, Toyota after that, and Suzuki at the third, exactly the reverse order.

Model’s Market Share:

A bit surprising, but most of the cars out there are Corollas, 13%, while it’s rival, Civic has 12% share. Now that may sound good to Toyota people but only for a while, because that 13% consists the 1.3, 1.6 and 1.8 Liter variants, and a general perception is that 80-90% of Corollas out there are 1.3s, so in this regard, Indus people should be worried about what they’re doing wrong. More surprising facts, Suzuki Mehran and Honda City have same market share, 10%, which again is a very, very good news for Honda people because Mehran comes in different price ranges, some of them making less than one-third of what you would pay for a City. Other car models cover 47% of the market.

Popularity:

“Expected” is what you would say, because Toyota is the most popular brand among Pakistanis, Honda after that, and Suzuki at third. The reason for Toyota being so popular is their workhorse –Corolla– which has been present in our country for more than four decades, maybe five. This car is so popular that I have seen people who know “Corolla” as the company rather than Toyota.

Uniqueness:

Once again, Honda takes it. The results show that Honda makes the most unique cars, Toyota, the second most, and Suzuki, again comes at the third rank.

Quality:

Someone may say that Toyotas are more durable, but when it comes to quality, people’s opinion is that Honda is the most high quality brand in Pakistan. Toyota, though, comes at the second, and third, surprisingly, goes to Mitsubishi.

Surveys like these could really help car buyers, sellers and automakers in various ways. The companies can get a better insight of what people think about their brand and where do they stand in the local market. The reason why we see only Toyota, Honda and Suzuki is the same, “Big Three”. Had there been more dealerships out there for the middle class, more interesting

and surprising would’ve been the response, and this goes to the officials out there controlling the taxation and other stuff like that, keeping other automakers from establishing dealerships.

Societal work by Honda Motors:

Honda strive “to be a company that society wants to exist”. Through our product manufacturing, sourcing of raw materials, sell them and presence of our product as a source of mobility, we impact the society in many ways. To be good corporate citizen and to ‘giving back to the society’, Honda has taken different initiatives for community welfare.

FREE MEDICAL CAMPIn rural areas, generally good medical facilities are very rare. The vicinity of the Company, Manga Mandi and its surroundings is a backward area and lacks basic infrastructure. TheCompany arranged three one-day free medical camps in Manga Mandi village, Sham kiBhattian and Bath village. Company doctors, lady doctor and paramedical staff attended the patients and provided them free medical advices and medicines. In three medical camps, a large number of patients were given treatment.

BLOOD DONATION CAMPHonda Atlas Cars (Pakistan) Limited, with association of Fatmid Foundation arranged blood donation camp at factory. Fatmid Foundation is involved in free medical assistance to more than 6,000 children suffering from thalassemia, Hemophilia and other blood related disorders. The associates were volunteers for this noble cause and a total of 87 bottles were collected. President of the Company, Mr. Takeharu Aoki and Vice President, Mr. Akio Takemoto also donated their blood.

SCHOOL RENOVATION, SHOES DONATION & INFRASTRUCTUREThe Company strives to contribute to societal welfare through improvement in basic facilities infrastructure of a local primary school for boys in Manga Mandi. Moreover, the community living around our factory are poor people engaged in daily labor, factory workers and farmers. Most of the primary class students attend school bare-footed or with slippers, even in a few degree temperature of winter. The Company arranged & distributed school shoes for all students of the primary school. The Company also improved an Off- Multan Road pathway, leading to 5 villages adjacent to our factory. The deteriorated road conditions were unsafe for traffic movement. The same were improved for smooth flow of vehicles and residents of the area.

“You Buy a Honda, We Plant a Tree”Honda has always been at the forefront of innovation & development of environment friendly products. The Company launched a campaign of “You buy a Honda, We plant a Tree” at the start of current year. The idea was to contribute and promote green & healthy environment for our future generations. The Company planted a tree on behalf of our customers for every Honda car sold during 2013-14. A total of 23,300 trees were planted throughout Pakistan.

Brand Development:

One of the proudest things about Honda is its R&D system. With the systematic way of approaching, focus on durability, reliability and basic performance to establish a creative and innovative technical foundation. With the wisely approach to the future, the Honda products do care about the economic, environmental, and social issues – This leads to an increase steady in Pakistan recently meanwhile the whole industry is going down by some external factors such as depreciation, Oil price raising, political recession. etc Honda is keeping involving in the research and development that benefit people in the future through leading-edge technology and commitment to innovation that opens up new possibilities in mobility. The dealership of Honda is also one of its strengths. Through creating products and services that provide the core values that make Honda unique, the Honda‘s associates around the world keep creating such inspiring experience for its customer. Honda put heartfelt endeavors into services, responding to changing values and increasingly complicated needs of customer. Its services focus on improving customer relations, with friendly and attentive sales, responsive service support, thorough maintenance and repairs.

Currently, Honda Atlas Cars (Pakistan) Limited is not in a position to make major changes in its cars. Only minor changes can be made here and decisions about these changes are made at the top level. 

There is no research and development department in HACPL. This function is performed by Honda Motor Company, Japan. All major changes in models of Honda cars are introduced there. Employees of HACPL are sent to Japan, where they are trained according to new conditions. Later on, these changes are introduced in the models offered in Pakistan.

Honda is one of the best auto manufacturer companies in the world. Honda has various products

and special services for its customers. Honda is manufacturing following products:

Models produced include:

Honda Accord Honda City Honda Civic Honda CR-V Honda CR-Z Honda VEZEL

Motorcycles

Power Equipments Water Pumps Power Engines

Here we are discussing only automobiles that are Honda atlas. The company has provided many comforts and specifications in its cars. Honda is offering many different models of Honda cars.

 Automobiles:-

Accord:-

Accord is a graceful car with a comfortable driving with various and unique specifications, 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.it has the best driving force and powerful expansion. Accord represents a distinct status upgrade for the sedan. A true prestige vehicle, it is designed for a sophisticated and dynamic drive. The Accord doesn't yell, it speaks with quiet authority.

Civic:-

In Pakistan the bestselling car is Honda civic. It is best among mediocre and almost 65 % of the people prefer this car over others. Its driving is too soft with best expansion and less consumption of fuel due to effective engine and central control system.  It passed the sides’ undisturbed thanks to reduced wheel arch clearance: and it streams beneath the chassis with minimal turbulence from the smoother and flattened under panels.

City:-

 It is the most sensitive car among other models of Honda with a stylish and attractive body. It is the first euro 3 complaint car in Pakistan. Hondas affirmative answer is the revolutionary new city.

Motorcycles:-

Honda motorcycles are the no#1 choice among people of Pakistan. Honda Motorcycles are defined by Quality, Performance, Speed, Economy Petrol and Re-sale Value. All these have managed to successfully bag your trust on the New Honda CD100. It is a stunning result of advanced Japanese technology and right up there as an outstanding performer representing all the qualities that make Honda motorcycles so special.

Honda Power Equipment:-

Honda power equipments offer a complete line of generators for commercial and consumer applications. Compact, fuel-efficient Honda generator models provide smooth, clean power for recreation, construction, rental, emergency and home use. All Honda Generators meet or exceed EPA (Environmental Protection Agency) emission standards.

Water Pumps:-

 Honda water pumps are known for their durable construction, quality engines and easy portability. These features apply to all categories of pumps that are offered by Honda.

Power Engines:-

 Honda is the world’s largest manufacturer of engines and has earned its reputation for unsurpassed quality, performance and reliability.

Honda always keep in mind the basic needs of its consumers and try to fulfill their needs as per their desires. They have introduced Hybrid cars keeping in view the environmental needs. They always try to give their customer best before its competitors. They have several services centers in every city of Pakistan for convenience of its customers. In past we have seen that Honda has taken remarkable steps to facilitate their customers rather than increasing their own sales. In 2007-8, considering it its responsibility, Honda recalled 344,000 of its Odyssey minivans because a malfunctioning computer could cause “heavy and unexpected braking without the driver pressing on the brake pedal and without illumination of the brake lamps.” Recalls affected the value of a specific brand and it took the company a long time to recover from the damage to its reputation. Recently, Takanobu Ito, who had been Honda’s CEO since the past six years announced that he would be stepped down in June this year due to the lapses in quality in Honda cars. Takata which was a major parts supplier built the air bags which were installed in cars 2002 to 2008 and some of those airbags could deploy explosively, injuring or even killing car occupants. Takata which was a major parts supplier built the air bags which were installed in cars 2002 to 2008 and some of those airbags could deploy explosively, injuring or even killing car occupants.

He was replaced by the Takahiro Hachigo, who was R&D executive and had been working on introducing the outgoing CEO’s reforms to fix the issues Honda had.

The Automotive industry has been an active and growing field in Pakistan for a long time. Despite significant production volumes, local manufacture of vehicle components is minimal, only a few car models being assembled in the country. The lack of competition in the local auto industry due to the presence of just three assemblers - and only one small car assembler - has resulted in technological stagnation of the industry; small cars primarily produced by Pak Suzuki, the country's largest auto assembler and a subsidiary of Suzuki Motor Corp., in the country are globally retired models using obsolete technology and not offering any safety features.

Major international brands with operations in Pakistan are:

Toyota General motors Honda Suzuki Nissan Motors.

Less Competitive Structure: As far as the Automobile Industry of Pakistan is concerned, the sector had enjoyed good protection against the foreign competition by means of tariff and non-tariff barriers. Therefore, the Original Equipment Manufacturers could not offer a competitive environment as there was a very tight monopoly or oligopoly structure in the market. For instance, Pak Suzuki Company enjoyed monopoly in the manufacturing and supply of 800 cc and 1000 cc vehicles during 1995-2005. Whereas Toyota and Honda companies formed a duopoly in the manufacturing of above 1000 cc cars. Hino Pak Motors appeared as a dominant firm in the trucks and buses sector while Millat Tractors claimed a lion share in the manufacturing and supply of the Agricultural Tractors. This picture is portrayed by the above table 1. The table depicts that the automobile market was governed by very few Original Equipment Manufacturers and the market lacked a free and healthy competitive environment.

Vehicle type Vehicle name Company Market shareCar-1300 2000cc Toyota Corolla Indus Motors 42.99%Car-1000cc Cultus Pak Suzuki 45.85%Car-800 cc Mehran Pak Suzuki 66.31%Jeep-4*4 Potohar Pak Suzuki 73.12%Pick up/L.C.V. Shehzore Hyundai 49.15%Motorcycle Honda Honda 68.85%Truck Nissan Truck Nissan 39.64%Bus Hino Hino 80.56%Farm Tractor Massey Ferguson Millat 51.44%

Increase in Import of small cars:

Pakistan has a very dynamic automobile market. But unfortunately Pakistani market has always been dominated by Japanese car manufacturing brands. In the due course Pakistan has not been able to produce a single Pakistani car brand. Actually the import of foreign brands in the early historic era in Pakistan had far reaching negative impacts on Pakistani automobile industry.

There are only three assemblers of cars in Pakistan which are Honda, Suzuki and Toyota. In which only Suzuki is manufacturing below 1300 cc cars. Honda and Toyota are manufacturing1300cc and above. Due to economic conditions in Pakistan, people prefer cheap cars due to which sale of Suzuki Mehran and Cultus is very high. But they still desire to have more comfortable cars. We have seen, from last few years import of small cars has been increased. Today imported cars have more shares in sales than local manufactured cars like Cultus and Mehran.

Import of these cars is greatly affecting the sales of local cars because imported cars have lesser prices than local made and people prefer these on the local for having more features and

specifications. The local manufacturers are asking the government to implement protective policies and ban cars coming into the country. If the numbers of imported cars continue to increase and sales of local cars drop, then many thousands of workers will lose employment. But government of Pakistan has not taken any step in this purpose as these imports are increasing the GDP of Pakistan.

The year 2013 saw the combined sales of local car assemblers decline by around 22% in 2013. 

 

Conclusion

The Pakistan Automobile industry has had its up’s and down’s, however overall we can see

that there has been positive development in this sector. There has been a positive growth in all parts of this industry, from production and sales, to employment levels. The automobile sector is an important one for our countries future, with positive reinforcement from the government through policies and regulations; it can help boost our automobile industry towards an important and leading role in our economy. According to a study by the World Bank, the ratio for cars to population is one is to one thousand. There is one vehicle for every thousand people in Pakistan; this alone shows the potential opportunity for growth in this particular industry. We believe that even though there has been positive growth, the growth rate itself could be better, and development can be faster. The automobile industry is important because it will not only create more jobs, it will help develop other supporting industries as well.