Despite multiple upward revisions in prices, Atlas Honda recorded all-time high sales of 1.135 units of motorcycles in 2018-19. The company had crossed the mark of 1 million sales for the first time in its history just last year.
According to the financial reports, the company delivered a record number of motorcycles to reach 1.135 million units as compared to sales numbers of 2017-18 which stood at 1.08 million.
The company passed on the impact of high operational cost to the customers multiple times in the same period but the demand for its brand remained high in the local market.
The management of Atlas Honda streamlined its business strategy with strengthened customer connect, and launch of new products. Further, it continued to expand its dealer network to increase its overall market share.
The two-wheeler industry in Pakistan provides inexpensive means of transportation to a large segment of the country’s population. App-based services such as Uber, Careem, and Bykea also gave impetus to the sales of motorcycles in Pakistan with the generation of employment and notable economic activity.
However, the industry’s growth was dampened and was recorded at 5% in 2018 compared to the previous year after three consecutive years of double-digit growth.
Given the macroeconomic context, the purchasing power of customers was affected which contained the demand for consumer durables including two-wheelers. On the other hand, a better security situation, improved remittances, higher trend of urbanization and demographic shift to youth maintained the much-needed support.
Atlas Honda Profit Down by 31% in 2018
Atlas Honda profit after tax decreased from Rs. 4.7 billion to Rs. 3.2 billion, a decrease of 31% over last year. This translated into Earnings per Share (EPS) of Rs. 31.0 as against Rs. 45.1 of last year.
This was due to a significant surge in material prices on account of depreciation of Pak Rupee against USD and Japanese Yen. Sales and marketing expenses rose to Rs. 1.9 billion, a year on year increase of 4% which is attributable to higher volumes, new model launch activities and spending on promotional campaigns to support the core business.
Administrative expenses remained the same over the corresponding period primarily due to measures introduced to maximize cost efficiencies. Other income, net of financial charges, contributed Rs. 624 million to the bottom line, 35.4% higher than the comparative period.