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Vision

Focusing on satisfaction (customers, associates

and shareholders) with challenging spirit and flexibility, we are dedicated tosupplying latest generation cars with advanced technology, greater fuel

efficiency and competitive prices, along with friendly and efficient after sales

back up, maintaining quality as core of all activities.

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Pakistan did not face a major setback from the global crisis. The economic hardship by the country has

mostly been the result of domestic issues - internal strife, political instability and poor governance has

slowed down an otherwise a viable economy. As a result the GDP growth rate for the year 2008-09 initially

projected at 5.5 percent has now been revised downward to 2.5 percent compared to 5.8 percent of last

year. The major pressure in the economy has stemmed from inflation. The SBP has projected inflation to

slow down in the final quarter of FY08-09. Controlled inflation may usher in lower interest rate and

improved liquidity, so necessary for growth of industry.

IMF has disbursed the first two tranches of $ 3.1 billion. The World Bank and ADB have pledged support

and an independent overseas support group, Friends of democratic Pakistan have decided a support of $

5.28 billion. Eased out political situation in the country will help in an improvement in business environment.

The stock market has exhibited a growth of 36 percent post March 16. Foreign exchange reserves have

crossed US $11 billion. The commodity prices are reflective of an inherent demand in the economy. A bumper

wheat crop is being projected and it will provide a boost to demand. What is needed is right policies that

reassure economic dynamism.

Automobile IndustryThe current economic recession has hit the world economy generally and automobile industry particularly,

with some of the world renowned companies facing hardships. However, Honda Motor Company is among

the few automakers with positive bottom line of 162 billion Yen in the year ending March 2009. Theautomobile industry depends on economic uplift, availability of auto financing at favourable terms and

sustainable consistent industry friendly policies. In the recent past, with the help of these factors, the

automobile production surged four times from 39,167 units in the year 2002 to 164,340 units in 2007.

Responding to the increasing demand and the government target to produce 500,000 units by the year

2011, all OEMs expanded their production capacity to meet the target set by the Government.

However, following the emergence of financial crises in early 2008 and increase in interest rates, the

financial institutions tightened the auto financing policy, which coupled with the upward surge in

exchange rates have pulled the auto sector down to four years ago i.e. 2004-2005 level.

In addition to above, the auto industry had to face the challenges of un-favourable budgetary impacts of

increase in sales tax by 1%, levy of Federal Excise Duty of 5% and additional taxes at the time of

registration of vehicles. In addition, 35% cash margin on imports was also levied, though reversed later.

All these factors resulted in sharp decline in auto production in all segments of the industry i.e. passenger

cars, buses, trucks and motorcycles. The quarterly analysis of the production data of the industry is as

under:

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2007-08 Category Q1 Q2 Q3 Q4 2008-09 Change %

62,292

52,067

Up to 800cc

801cc to 1299cc

16,988

12,709

10,798

6,528

7,359

4,365

4,454

2,146

39,599

25,748

-36.4%

-50.5%

166,278 Total Passenger Cars 42,752 23,974 21,756 17,543 106,025 -36.2%

51,725

34,735

Tractors

LCV, Buses, Trucks etc

16,030

8,114

12,216

8,603

14,498

6,751

9,354

2,380

52,098

25,848

0.7%

-25.6%

845,560 Total 2008-09 233,878 172,017 156,726 100,706 663,327 -21.6%

Year Q1 Q2 Q3 Q4 Total

Honda 2008-09

Honda 2007-08

3,480

5,022

3,881

3,967

2,283

2,798

3,136

3,813

12,780

15,600

%age change -30.7% -2.2% -18.4% -17.8% -18.1%

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New Models

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Your company has always followed the tradition of introducing new technology and providing global cars of

international quality to its customers, since the launch of its first model in 1994. During the short span of 15

years, your company has introduced 4 new models of Honda Civic and 4 new models of Honda City the

highest among the other car makers in Pakistan. Many features and specifications were introduced first time

in Pakistan.

Your company introduced the 3rd Generation Honda City on January 31, 2009. It has V-tech Engine, Anti

Lock Braking System (ABS) and Euro-4 emission systems, which are considered to be the strictest emission

standard worldwide. The new 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.

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During the year under review, the upward exchange rate movements

were enormous as Japanese Yen depreciated by 30.5% during April

08 to March 09 and US Dollar by 28.2% in the same period. The

impact of rupee depreciation was further aggravated by the rising

inflation and putting pressure on cost structure of our products. The

Company passed on minimum possible impact to the New City price.

Re to Movement

Due to the factors mentioned above, the company suffered loss after

tax of Rs 401.8 million during the year against the profit of Rs 75.0

million in the last year.

The net sales for the year were Rs 14,149.6 million against Rs

14,715.5 million of last year. The administrative and selling expenses

were Rs 329.8 million against Rs 348.8

to $ Movement

million in the same period of last year. Other income improved to Rs.

64.8 million against Rs 23.6 million of last year, mainly due to

increasing interest rates on bank deposits. Other operating expenses

increased to Rs. 311.0 million as compared to Rs. 4.9 million last

year, mainly because of Exchange loss (Rs 231 million) and write-off

(Rs 80 million) of Plant & Machinery

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

The company was incorporated on November --, 1992 and joint venture

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agreement was signed on August ---, 1993. The ground breaking ceremonywas held on April 17, 1993 and within a record time of 11 months,construction and erection of machinery was completed. The first car rolledoff the assembly line on May 26, 1994. Official inauguration was done byPresident of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr.Kawamoto,

President of Honda Motor Company LimitedJapan was also present tograce the occasion. The company is listed on Karachi, Lahore and IslamabadStock Exchanges.

On July 14, 1994, car bookings started at six dealerships in Karachi, Lahore,and Islamabad. Since then the Dealerships Network has expanded andnow the company has sixteen 3S (Sales, Service and Spare Parts) and thirty2S (Service and Spare Parts) Pitstops network in all major cities of Pakistan.

Since the commencement of production in 1994 till March31, 2005, thecompany has produced and sold over 77,500 cars.

All dealerships are constructed in accordance with the standards defined byHonda World over. Percentage of local parts conforms to the government'spolicy. Local vendors are continuously patronized to develop parts locally. The quality of local parts is thoroughly checked to meet stringentinternational standards.

We always strive to give outstanding service to our valued customers. In

addition to providing regular service to customers, the company alsoregularly conducts Service Campaigns, to facilitate customer's need forservice. This has given our customers absolute confidence in our cars, clearlyevident from the ever increasing sale volumes.

It is the constant endeavor of Honda Atlas Cars (Pakistan) Limited to achieveNo .1 Customer satisfaction. Honda Atlas Cars (Pakistan) Limited iscommitted to meet customer expectations, and to provide good value formoney. Currently we are offering 8 different models of Honda CIVIC andCITY cars in wide range of colors with unique technological and otherfeatures.

PRODUCT LINE OF HONDA
http://www.honda.com.pk/dealers.htmhttp://www.honda.com.pk/dealers.htm

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AUTOMOBILES1. ACCORD; Move up to the new status of

sedan

Witness the debut of the astonishing new HondaAccord: the outcome of all-out pursuit of sedanexcellence, successfully uniting all contradictoryelements. 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 panoramicvisibility. A longer body with sportier performance than ever before andpowerful i-VTEC engine designed for high fuel economy. A renownedglobal car with all advanced Honda technologies for driving command,plus eco-performance for increased recyclability.

Experience its overall quality, riding comfort, and details for yourself andyou'll know why the new Accord represents a distinct status upgrade forthe sedan. A true prestige vehicle, it is designed for a sophisticated anddynamic drive.

The Accord doesn't yell, it speaks with quiet authority.

2. CIVIC; Taking the lead.......

Honda created a smooth, contoured body that slips

through the air with minimal resistance. The highlypractical results are greater stability at high speeds,improved overall fuel efficiency, and lower windnoise. The air flows smoothly over the front underspoiler and angled windshield to the sharply cutoff rear; it passed thesides undisturbed thanks to reduced wheel arch clearance: and itstreams beneath the chassis with minimal turbulence from the smootherand flattened under panels.

3. CR-V; Explore the Sporty DriveA Complement to your lifestyle, Honda CR-V is designed

to soothe your senses. After all, its where new-age

urban styling meets a sporty drive. A dynamic

combination that makes the CR-V do even better on the road. It is more

versatile; bolder in sophistication, and much more exciting - promising an

engaging driving experience that's rare in its class

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4. CITY; sinfully sensuous... Yet Sensitive...The First Euro 3 compliant car in Pakistan

Is there a better way to build a compact sedan?

Hondas affirmative answer is the revolutionary new

City.

3S Dealership (Sales, Service, Spare Parts)

2S Dealership (Service, Spare Parts)

Honda Atlas Cars (Pakistan) Limited has Dealership Network covering all of

Pakistan, and Dealership are equipped with all the facilities a modern dealership

should have. The facilities include Sale, Service and Spare parts.
http://www.honda.com.pk/2Sdlrs.htmhttp://www.honda.com.pk/3Sdlrs.htm

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The Seven step process in the

hypothetic-deduction method

ObservationWe observe that the sales of Honda

Motors are less than that of Toyota

Motors in Pakistan. Our observation was

based on the traffic of cars that we

seen on the roads.

Preliminary Data Gathering

For this purpose we visited Honda Breeze in Multan and meet Mr. Imran

Qureshi Sales Manager Honda Breeze Multan. He provides us with valued

information about Honda Motors and its sales in Pakistan.

He said that though it seems that the sales of Honda is less than that of its

competitor Toyota Motors but actually the fact is that Honda is targeting a

specific class, and its operations are not as large as Toyota has, therefore we

are achieving our targets successfully. So it is futile to say that Honda sales

are less than that of Toyota since our profit ratios are nearly same.

Comparison of Price between Honda and Toyota

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Toyota HondaModel Price Model Price

Camry AccordAutomatic

Transmission6,299,000 2.4 I VTEC 5,699,000

ManualTransmission

6,099,000

Corolla Civic1.3L XLI 1,269,000 I-VTEC MT 1,659,0001.3L GLI 1,384,000 I-VTEC PT 1,749,0002.0 D 1,317,000 VTI ORIEL MT 1,779,000

2.0D Saloon 1,669,000 VTI ORIEL PT 1,849,0002.0D Saloon S/R 1,754,0001.8L ALTIS MT 1,669,000 CITY1.8L ALTIS MT

S/R1,754,000 M/T 1,229,000

1.8L ALTIS AT 1,754,000 A/T 1,349,0001.8L ALTIS AT

S/R1,839,000

CUORE CR-VCUORE CX 645,000 CR-V 2.4L 5,299,000

CUORE CX MET 645,000CUORE CX CNG 689,000CUORE CX CNG

MET689,000

CUORE CX A/T 674,000CUORE CX A/T

MET674,000

CUOREECOMATIC

729,000

CUOREECOMATIC MET

729,000

HILUXHILUX 4X2STANDARD

1,359,000

HILUX 4X2 UPSPEC

1,399,000

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Problem Definition

From Mr. Imran Qureshi we came to know about the services and operations

of Honda Motors in Pakistan.

From that discussion we concluded that, there are certain factors which are

causing low sales of Honda.

They could be Advertisement and Brand Line

Since Honda Motors do not advertise for the promotion, and their brand line

is comparatively lesser than that of Toyota so it could be a factor of low sales

So the Problem Definition here is;

Does lack of advertisement and no extension in brand line are the

factors of low sales of Honda?

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Hypothesis Development

Sales of Honda are a dependent variable, and it is dependent on

Advertisement and Brand Line, as they are the independent variables. If we

increase the advertisement and brand line of Honda motors its sale will alsoincrease.

Mindset of a customer is a moderating variable while awareness of the brand

is an intervening variable.

All variables have positive relationship with each other.

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Methodology

To evaluate why the sales of Honda is below the mark, we prepare a

questionnaire, below is that questionnaire.

QUESTIONAIRE

I m satisfied with HONDA marketing strategies which are sufficient for its promotion & customer.

AGREE NEUTRAL DISAGREE

HONDA is well known brand.


HONDA satisfy all my needs & wants.


The style & design of HONDA is attractive as compared to competitor.


HONDA is targeting all classes.


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HONDA Facilitate and gave easy access to its customers.


HONDA has been maintaining its quality since its launched in Pakistan.


HONDA is a status symbol.


HONDA is durable and reliable.


Product line of HONDA is sufficient .


HONDA creating good effect on our society.


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Total Questionnaire 30

Biased Date 04

TOTAL 26

Each Questionnaire contains:

PROMOTION STRATEGIES 02 QUESTIONS

BRAND-LINE 02 QUESTIONS

SATISFACTION 03 QUESTIONS

HONDA IMAGE 02 QUESTIONS

HONDA QUALITY 02 QUESTIONS

MATHEMATICAL RESULT

No. AGREE NUTRAL DISAGREE TOTALQUESTIONS

01 PROMOTIONSTRATEGIES

05 18 29 52

02 BRAND-LINE 16 21 15 5203 SATISFACTION 43 26 09 7804 HONDA IMAGE 29 16 07 5205 HONDA QUALITY 31 08 13 52

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PERCENTAGE

No. AGREE NUTRAL DISAGREE TOTALQUESTIONS

01 PROMOTIONSTRATEGIES

56% 35% 09% 52%

02 BRAND-LINE 30% 40% 30% 52%03 SATISFACTION 56% 33% 10% 78%04 HONDA IMAGE 55% 30% 15% 52%05 HONDA QUALITY 60% 15% 25% 52%

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Deduction

From our questionnaire we came to know that

People are not satisfied with the promotion and marketing strategies of

Honda Motors.

But they agree that Honda is a well known brand but customer mindset

is that Honda is costly car.

Honda is class oriented and they are targeting a specific class.

There brand line is short when we compare it with Toyota, as Toyota is

targeting all classes of society.

Users are satisfied with the quality standard of Honda

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Recommendations

From all our research and data that we gathered we concluded that,

They should reconsider there marketing strategies

They should aware the public as there mindset is that the Honda are

expensive than Toyota, but the reality is vice versa

Instead of focusing on the corporate society they should try to focus

different classes in the society

They should increase there product and should come up with small

cars

Honda should focus and design cars specifically for the users of rural

areas of Pakistan.

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