[Sport] Troubling Times for Honda in Pakistan

[Mark-x]

Auto sector in Pakistan is in hot waters since the last couple of years however the Fiscal Year 2019-20 turned out to be worse than expected. Sales of locally assembled passenger cars witnessed a 53% decline in sales during FY2019-20 due to slowdown in economic activities, higher interest rates, constantly rising car prices & towards the end, due to coronavirus pandemic which virtually put car sales at a halt.However the automaker which seems to have suffered the most in these times is Honda Atlas, the sales of which reduced by 63% during last fiscal year. Honda sells three locally assembled products here– the Civic, City and BR-V, cumulative sales of which stood at 44,234 units in FY2018-19, however in FY2019-20 the sales got reduced to 16,387 units rendering a deplorable 63% decline. Not only that the sales got drastically reduced, the company posted an alarming Rs 511 million quarterly loss for the period ending June 2020.

 

Since long the company has stopped disclosing individual sales of two of its models– Civic & City although both are completely different vehicles from each other. Still the combined sales for the duo saw 39,189 units in FY2018-19 which shrunk to 14,091 units in FY2019-20 witnessing a 64% decline. On the other hand, BR-V the 7-seat MPV sold 5,045 units in FY2018-19 however its sales reduced by 54.4% in FY2019-20 to 2,296 units.So why Honda is feeling much of the heat compared to the others, well there are multiple reasons behind the ongoing demise & we are obviously not going to blame the depreciating currency or increased duties as the sole reason which the automaker often blabber about since the root cause is something very different which has been accumulating for many years & has remained unattended by the company.