Strategic management project on Honda Atlas cars Based on almost real facts & figures.

3. TABLE OF CONTENT:
• Introduction
• Vision & mission statement
• Key information
• Board of Directors
• Quick facts & figures
• Automobile market structure
• Products & product information
• External audit & EFE matrix
• CPM matrix
• Internal audit & IFE matrix
• BCG matrix
• IE matrix
• The grand Strategy

4. INTRODUCTION:
Honda Atlas is a Pakistani automobile manufacturer and joint venture between Honda
Motor and Atlas Group, based in Lahore, Pakistan since 1992. Honda Atlas is the authorized
assembler and manufacturer of Honda vehicles in Pakistan.
HOLDING COMPANY:
M/S Honda Motor Company Limited is the holding company with 51% shares and is
incorporated in Japan.

5. Vision:
“striving to be accompany that society wants to exist by sharing joys with people
throughout the world.”
“creating products that maximize the joy of customers, with speed, affordability & low
CO2.”
Mission:
It is the constant endeavor of Honda Atlas Cars (Pakistan) Limited to achieve No.1
Customer satisfaction. Honda Atlas Cars (Pakistan) Limited is committed to meet
customer expectations, and to provide good value for money.

6. KEY INFORMATION;
Type Joint vent ur e
Indust r y Aut omot ive
Founded 1992
Hea dqua r t er s La hor e, Punj a b, Pa k ist a n
Key peopl e Toichi Ishiya ma , CEO
Pr oduct s Aut omobil es
Pa r ent Honda
sl oga n “MAKESALL THE DIFFERENCE”

7. Board Of Directors
• Mr. yusuf H. shirazi
• Mr.Toichi Ishiyama:
• Mr. Amir H.shirazi:
• Mr.Akira Murayama:
• Mr. Mr. Nadeem Khan
• Mr. Shigeru Yamazaki:
• Mr. Yasutaka Uda:

8. Quick facts & figures:
 No. of authorized shares 200,000,000
 No. of shares issued 142,800,000
 No. of shareholders 4633
 Share price 752
 Next election of directors April 2018
 Total production in 2017 34,560 units
 Total sales units in 2017 35,381 units
 Sales revenue of 2017 62,833 million
 Dividend paid in 2017 1,856 million
 Profit after tax 6,135 million
 Total units produced after 300,000 units
commencement
 Employees (in Nos.) 1,122
 Installed Capacity (Nos. per annum)50,000

9. AUTOMOBILE MARKET STRUCTURE:
The market structure of the automobile industry in Pakistan is concentrated. In
economics term, we could say its an oligopoly, which is characterized by imperfect
competition in which the industry is dominated by a small number of suppliers. This is
because the auto industry is highly capital-intensive requiring high investments and
the products are expensive.
Moreover, the market can also be categorized as price-oriented. As cars are luxury
items, especially in developing countries (Pakistan being one of them), the demand for
them is elastic. Any prices change affects the sales of the company to a great extent.

10. PRODUCTION & SALE DATA OF PASSENGER CARS:
• HONDA ATLAS CARS:
Total production 24550 units
Total sales 25008 units
• PAK SUZUKI:
Total production 31843 units
Total sales 2848 units
• TOYOTA COROLLA:
Total production 33597 units
Total sales 33590 units

11. PRODUCTS
PRODUCTS

12. Products Information:
HONDA CIVIC
The 10th Generation Honda Civic introduces a new design language as well as a range of cleaner,
more powerful and more efficient engines. 2017 Honda Civic is a front engine, front wheel drive,
subcompact sedan also known as Civic X. The Honda Civic 2017 is available in 3 variants in
Pakistan 1.5 Litre VTEC Turbo, 1.8 Litre and 1.8-Liter VTI Oriel while globally it is sold in 4 variants
LX, EX, EX-T and EX-L. The Honda Civic 2017 price in Pakistan is between Rs. 2,349,000 To
2,999,000

13. HONDA CITY:
Honda City (5th Generation) was launched on 31st January 2009 by Atlas Honda Cars Pakistan. The
Honda City 5th Generation is a front engine front wheel drive subcompact sedan with outstanding
features and specifications. The Honda City 2017 featured a brand new and more aggressive model
design language compared to the previous City as well as new engines and interior panels, Honda Atlas
launched a new 1.5 L engine in 2013 and then in 2014, it received a facelift in October which included a
series of minor cosmetic changes. Then, again in 2017, it received another facelift in which immobilizer
and few cosmetic changes were .

14. REVENUE APPLICATION (in percent):
Application 2017 2016
Production cost 59 60
Other costs 3 3
Employment 3 3
Government 27 27
shareholders 2 2
Profit retainedd 6 5
Total 100 100

15. External Audit:
Economic Analysis:
• GDP:
The GDP is expected to grow 5.7% in the financial year 2016-2017, compared to 4.7% of last
year- highest during the past 8 years.
• IMPORT & EXPORT:
Since 2016, yen was strengthening against the dollar which made imports more expensive for
Pakistani automakers.
• GOVERNMENT REGULATIONS—PROTECTION FOR THE INDUSTRY:
The major government regulations that have a direct impact on the automobile industry include the
import duties on CKDs, law regarding the CVT, import duties on the import of cars and deletion
policies.

16. • TAX RATES:
The inflation in financial year 2016-2017 clocked at around 4.1% lower than the last year 6%. n order
encourage compliant taxpayers, withholding tax on registration of motor vehicles is proposed to be
reduced n order to encourage compliant taxpayers, withholding tax on registration of motor vehicles is
proposed to be reduced
• PRICE EFFECT:
The demand for cars is price-elastic.
• CAR LEASING, FINACING:
Auto Loan / Car Financing is a standard product offered by most banks, for both new and
used cars.

17. Social, Cultural, Demographic and Natural environment & Environmental variables:
• INFRASTRUCTURE:
The state of our public transportation is extremely poor, to say the least. Therefore to avoid their use,
people prefer having their own cars.
• HUMAN RESOURCE:
Pakistan’s labor force is not properly trained and mostly unskilled, the productivity is low relative to other regional
competitors.
ATTITUDE TOWARD INVESTING:
The market can also be categorized as price-oriented.

18. • CAR RATIO:
One in 205 persons owns a car in Pakistan as compared to 40 persons in Asia, 4 persons in
Europe and 3 persons in North America. The ratio of those who can afford to buy a car is much
lower—one person in 2900.
• POPULATION GROWTH
With the population growth of 2.7% per annum and the changing lifestyles of the people,
automobile sector has grown in the past.
• DEMOGRAPHIC SHIFT
Migration of the population from the rural to the urban areas & also Chinese migration affects the
automobile sales.
• ENVIRONMENTAL POLICY:
HACPL formulate objectives & targets for pollution prevention environmental impacts

19. POLITICAL FACTORS:
• NEW 5 YEAR AUTO POLICY
New five-year auto policy, announced by the Ministry of Finance, Government of Pakistan in March 2016, seems
to be very much eventful as far as the automobile industry in Pakistan is concerned. The government’s new auto
policy is now focused on new entrants of the car makers offering benefits to them with little tax burden amid
inviting competition amongst the existing assemblers in the automobile sector.
• UNSTABLE GOVERNMENT:
Economic growth and sustainable market is not possible without political stability and creating conducive
environment for investment. From the first day, Pakistan is suffering from political unpredictability that’s why
investors always remained reluctant to invest in Pakistan.
• INCREASE IN IMPORT TAX:
Car sales in Pakistan are seeing an all-time high. Local car manufacturers are pouring all they have in trying to
meet local demand

20. TECHNOLOGICAL FACTORS:
 Honda cars has always followed the tradition of introducing new technology andproviding global cars of
international quality to its customers, since the launch of its first model in 1994.
 During the short span of 24 years, your company has introduced 5 new models of Honda Civic and 5 new
models of Honda City –the highest among the other car makers in Pakistan.
• The City has Drive-By-Wire (DBW) control technology for fuel efficiency. It has also enhanced G-
CON collision safety which reduces the impact on passenger cabin. To maintain the global quality standards,
the Company has invested Rs. 2.1 billion on development of local parts, dies and fixtures of Honda City.
However, the new features increased its cost and so the selling price.
• Honda produces cars of highest quality with high specifications of Honda to its global customers. Honda has
the pride of providing the environment - friendly, Euro IV compliant cars to its customers, which no other maker
has in Pakistan.
• On the strength of our confidence in our products, the company City launch effective February 2009, increased
warranty of new City to 70,000 Km or 3 years from the date of purchase, whichever comes earlier, increasing Joy
of Buying of new Honda City.

21. s.no Key external factors weight Ratings Weighted score
OPPERTUNITIES
1 Increasing demand for cars 0.16 4 0.64
2 Large market to operate 0.10 4 0.4
3 Demographic shift 0.12 3 0.36
4 Customer desire for fuel efficient & hybrid cars 0.09 3 0.27
5 Increase in consumer spending trend 0.10 4 0.4
THREATS
6 Inflation 0.08 2 0.16
7 High Import taxes 0.12 1 0.12
8 New entrants 0.08 4 0.24
9 Infrastructure 0.09 1 0.10
10 Political instability 0.05 1 0.05
Total 1 2.74
EFE MATRIX:

22. COMPETITORS PROFILE:
• Pak Suzuki Motors Company Ltd.
Is a company assembling and distributing Suzuki Japan's cars in Pakistan. Currently they are one of
the most successful motor companies in Pakistan.The firm was founded in 1983 as a joint venture
between PAK and Suzuki, formalizing the arrangement by which AWAMI Auto Ltd. The company now
assembles a wide range of Suzuki vehicles and aims to produce150,000 vehicles per year. (2005
production was 100,000).It has the largest share in the Pakistan car market.

23. Toyota Indus:
Indus Motors Company Limited, operating as Toyota Indus, is a Pakistani automobile manufacturer
and joint venture between House of Habib, Toyota Tsusho and Toyota Motors, based in Karachi,
Pakistan since 1990.[3] Indus Motors is the authorized assembler and manufacturer of Toyota and
Daihatsu vehicles, auto parts and accessories in Pakistan since 1 July 1990 at its 105 acres (0.42
km2) manufacturing plant at Port Bin Qasim Industrial Zone, outside Karachi.

24. S.no Key success factors weight Rating score Rating score
1 Advertising 0.20 4 0.8 3 0.6
2 Product quality 0.10 3 0.3 4 0.4
3 Price competitiveness 0.10 4 0.4 3 0.3
4 Management 0.13 4 0.52 4 0.52
5 Financial Position 0.15 3 0.45 3 0.45
6 Customer loyality 0.12 3 0.36 3 0.36
7 Market share 0.10 4 0.4 3 0.3
8 Product variety 0.10 4 0.4 2 0.2
Total 1.00 3.63 3.13
CPM MATRIX:
_______________________________________________________________________________________________
Pak Suzuki Toyota indus

25. INTERNAL ASSESSMENT:
MANAGEMENT AUDIT:
Management Style:
• consultative type.
• Employees are allowed to give suggestions, but the final decision making by the top management.
• Control is primarily exercised by the top management but some sharing of responsibilities at middle
and lower level.
• Managers at all hierarchical Level plans effectively.
• Managers delegate their authority.

26. MOTIVATION:
 Motivation through rewards is practiced.
 HACPL implement Japanese System of Management.
 HACPL give’s a lot of incentives to their employees.
 Every Employee got a Honda car after 8year of working experience at HACPL.
 Free Hospital Facility to their employee and their family.
 Bonuses are given to the employee after job evaluation
WORKPLACE ENVIRONMENT:
Employees morale is high. company provide good environment to grow
Atlas Honda has a sophisticated IT system. Each & every department is
The computerization has reduce the burden of employees

27. HIRING & SELECTION PROCESS:
 In HACPL employees are selected very carefully. Ad is posted in Newspaper or on HACPL Website.
Than HR department conduct an interview of every candidate who apply for the job, after selection
from the interview HR Department also conduct a test of the candidate called psychology test and this
test is about 30min long. Reason behind this test is to check that how much a candidate can bear
pressure on himself.
TRAINING & DEVELOPMENT:
In order to maintain a competitive edge in the growing market, the company keeps on investing in the
training & development of its associates. The associates are also sent on “The overseas Human
Resource & Industry Development” (HIDA) held in Japan and regional training conducted by Asian Honda
Motors

28. Financial audit:
Financial Results:
• The company earned record profit after tax Rs.6135 million for the year improved by 72.5% in the same
corresponding last year. Earning per share grew to Rs.42.96 against 24.90.
However, GP margin was slightly reduced from 15.1% of last year 14.5% mainly due to increase in material
cost.
• Other income improved significantly to 1115.2 million against Rs.309.8 million which was 260% better than
last year. This was all possible with better cash & treasury management of an improved quality.
• Financial & other charges increased to Rs. 560.9 million against 492.8 million due to statutory provision of
WPPF and WWF for the fy-17.
• during the year, the company contributed an amount of Rs.25.13 billion to the government exchequer in the
shape of sales tax, custom duty, excise duty & other govt. levies. For this it was awarded 1st position in the
Punjab region by the custom authorities.

29. Dividend to shareholders:
The company paid cash dividend 0f Rs.13/- per share against Rs.7/- last year, showing a increase of 86%.
Company regard returning profit to shareholders as one of the top management priorities. Company believes in
appropriate & consistent dividend payment to shareholders

30. Financial ratios analysis:
 Gross profit ratio:
The company’s profitability ratio is 14.5%, Which is quite good percentage. As compare to industry. company is
trying to reduce its costs due to import cost. Yet company is efficient & still striving to grow.
 Current Ratio:
HACPL’s current ratio is 1.2, which means the business is able to pay 1.2 rupees against every single rupee of its
liability. sounds good but company is likely to have difficulties to pay its debts as they become due because most
of its current assets consist of inventory.
 Total Assets Turnover:
The company’s assets turnover ratio is 1.2, while its competitor Pak Suzuki’s ratio is 2.0.
HACPL is not efficiently using its assets to generate sales.
 Stock Turnover Ratio:
HACPL’s stock turnover ratio is 10.1, which is quite better from its competitor Pak Suzuki’s ratio is 4.2. A high ratio
implies strong sales.
 Working Capital:
Company’s Net Working capital is RS. 8,418,899. a company has enough short term assets to cover its short term
debt.

31. Corporate & financial Reporting framework:
 International financial Reporting standards, as applicable in Pakistan, have been followed in preparation of
financial statement.
 The system of internal control is sound in design and has been effectively implemented & monitored.
 There are no significant doubts about the company’s ability to continue as a going concern.

32. PRODUCTION AUDIT:
Cost OF Production:
The cost of production is 59% of its total sales. This is much high due to the import duty & transportation cost.
Production Capacity:
HACPL has a capacity of total 50000 units per annum.while company produced 34560 units in 2017. Company’s
assets are under utilizing due to the external environment.
Inventory Control Policy:
The company is strictly controlling its inventory. It believes in moderate production of units.

33. S.no Key internal factor weight Rating Weighted score
Stengths
1 Goodwill 0.10 4 0.4
2 Technologically advancement 0.08 4 0.32
3 Employee morale is Excellent 0.12 4 0.48
5 Loyalty of customers 0.09 4 0.36
6 Sales increased 0.05 3 0.15
7 Quality of product 0.08 4 0.32
8 High inventory turnover 0.08 4 0.32
weaknesses
9 High production cost O.10 1 0.10
10 Often customer have to wait for delivery 0.08 2 0.16
11 Capacity is under utilized 0.07 2 0.14
TOTAL 1.00 3.17
IFE MATRIX:
IFE MATRIX:

34. No products
No product
 All new Honda civic
 Honda city 2017 All previous models
BCG MATRIX:

35. THE INTERNAL- EXTERNAL MATRIX:
1 2 3
4 5 6
7 8 9

36. The Grand Strategy:
QUADRANT 1
HACPL should adopt these strategy:
 Market development
 Market penetration
 Product development
 Forward integration
 Backward integration
 Horizontal integration
 Related diversification