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“In the Name of Allah the most Compassionate,

The Most Merciful”


Internship programmed is conventional part of Bachelor of Business Administration,

requires 6 to 8 weeks training in any listed company. This internship programmed
provides the students an opportunity to apply their knowledge practically, which they
learn in their class. This training program also creates confidence in students. The
students apply different concepts of accountancy, management, marketing and other
subjects practically. Another purpose of this training is to introduce young blood in the
business world.

This internship report is about six weeks training which I completed in Atlas Honda
Limited at Multan. I studied the function and working of different departments and in this
I got a lot of practical experience.


I owe profound thanks and deepest sense of gratitude to Almighty ALLAH the
Beneficent and the Merciful Who blessed us with determinations, the required potential
and ability to complete this piece of project work. No words to describe our sweet
sensation about our affectionate parents, family members and friends, because without
their prayers and shadow of love, perhaps it would be impossible to attain this target.

I acknowledge with immense pleasure and want to describe our feelings of respect for
our Internship supervisor’s valuable guidance, inspiring criticism, zealous interest and
constant encouragement during the project. We found him to be very helpful and
hardworking person. I want to thanks all the personalities who have been a source of
guidance during my research, especially.

Mr. Adeel Safdar (RSM AHL Multan)

Mr. Sajid Saleem ( RM Parts AHL Multan)

Mr. Aftab Gillani (RM Service AHL Multan)

I am also indebted to pay rich tributes to all our worthy teachers who taught us and for
their continuous cooperation during the course of our studentship at the University.

I dedicate this to my Beloved


Serial Page
No. Description No.

1 Executive Summary 06

2 Introduction Of Organization 07

3 Vision Mission and Objectives 15

4 Strategies of Organization 17

5 Organizational Structure 25

6 Working of Various Departments 26

7 Summarized Performance of Organization 53

8 Financial Analysis 72

9 SWOT Analysis 96

10 Suggestions and Recommendations 100

11 Limitations 102

12 Conclusion 103

13 Annexure 111


Atlas Honda Limited leads the list of fifty competitors in motorcycle manufacturing
industry in Pakistan due to distinctive quality policy. Their corporate vision and values
are the driving forces and at present Atlas Group spreads over 11 companies both private
and public limited. Atlas Group is a responsible entity which is highly committed to
comply with the corporate, environmental laws and to conduct their business with
utmost honesty and sincerity.

AHL has a manufacturing capacity of 1600 units per day under strict quality standards
and their sale network is well spread to sell all of them. They have a 5s dealer network to
satisfy the customer to the optimum level.

Atlas Honda has undertaken to develop local manufacturing capabilities to the highest,
economically feasible level. While a major role in localization has been assigned to
vendor industries, Atlas has the country's largest in-house manufacturing capability in the
country at its Karachi and Sheikhupura plants. To support the production facilities, the
company has established an R&D wing and tool making facilities which are growing
rapidly in size and function as the company expands.

Atlas has managed to execute 12 Joint Ventures and Technical Assistance Agreements
between local vendors and foreign manufacturers for transfer of technology besides Atlas
has directly executed 9 Joint Ventures-and (TAA) Technical-Assistance-Agreements-
other-than-with-Atlas Honda Ltd management is striving to modernize company
operations by adapting applicable aspects of research and theory and more specially,
Honda's unique philosophy of hard and soft technologies to the realities of Pakistani
conditions. Company management structure, systems and processes are reviewed
periodically according to the demands of the-customer-growth-and-new-technology.

Introduction of Atlas Group

The Atlas Group comprises of 7 public and 4 private limited companies, with over 5,000
staff members. The foundation of the Atlas Group was laid by Mr. Yusuf H. Shirazi, in
1962 with the establishment of Shirazi Investments (Pvt) Limited with a capital of half a
million rupees and three men - doing business in Trading Shares and R real Estate.
Shirazi Investments is now one of the leading investment companies in Pakistan engaged
in trading shares, fund management, underwriting, real estate and warehousing. The
Company has played a key role in the promotion and acquisition of the Atlas Group of

The growth of the Atlas Group is the result of its focus on good corporate governance.
The Group's equity has risen to Rs. 15 billion; assets have exceeded Rs. 25 billion and
sales have crossed the Rs. 30 billion mark. The Group paid taxes of Rs. 9 billion
equivalent to 1.5% of the total government revenues. All this progress is due to the
Group's reliance on the intellectual capital, dedicated efforts and team spirit of all the
stakeholders. Every member is striving for excellence and taking pride in the Group's

“ Organization-Development
Self Development ”

Atlas group operates in three sectors:

1-Engineering Sector

2-Trading Sector

3-Financial Sector

1- Engineering Sector

The Engineering Sector includes the following listed companies.

1- Atlas Honda Limited

2- Honda Atlas Cars (Pakistan) Limited

3- Allwin Engineering Atlas Engineering

4- Atlas Battery Limited

5- Atlas Power

2- Trading Sector
The Trading Sector includes the following listed companies.

1- Shirazi Trading Co. (Pvt.) Limited

2- Honda Atlas Power Product (Pvt.) Limited

3- Total Atlas Lubricant Pakistan (Pvt.) Limited

2- Financial Sector

Atlas Group has following three financial companies.

1- Muslim Insurance Company Ltd. Shirazi Capital

2- Atlas Investment Bank Ltd.

3-Atlas Asset Management Co. Ltd.

Atlas Honda Limited

Atlas Honda Limited is a joint venture between the Atlas Group and Honda
Motor Co., Japan. The company was created by the merger of Panjdarya Limited and
Atlas Autos Ltd. in 1991. Both these motorcycle manufacturing concerns were
established by the Atlas Group. In addition, a third concern, Atlas Epak Ltd. was taken
over by the Government of Bangladesh. Atlas Honda Limited manufactures and markets
Honda motorcycles in collaboration with Honda Motor Company. The Company also
manufactures various hi-tech components in-house in collaboration with leading parts
manufacturers like Showa and Toyo Denso. Honda motorcycles are by far the best
selling motorcycles in the country with an unmatched reputation for high quality,

Atlas has undertaken to develop local manufacturing capabilities to the highest,

economically feasible level. While a major role in localization has been assigned to
vendor industries, Atlas has the country's largest in-house manufacturing capability in
the country at its Karachi and Sheikhupura plants. To support the production facilities,
the company has established an R&D wing and tool making facilities which are growing
rapidly in size and function as the company expands.

Atlas has managed to execute 12 Joint Ventures and Technical Assistance Agreements
between local vendors and foreign manufacturers for transfer of technology besides
Atlas has directly executed 9 Joint Ventures-and (TAA) Technical-Assistance-
Agreements-other-than-with-Atlas Honda Ltd management is striving to modernize

company operations by adapting applicable aspects of research and theory and more
specially, Honda's unique philosophy of hard and soft technologies to the realities of

Pakistani conditions. Company management structure, systems and processes are

reviewed periodically according to the demands of the-customer. -

Decision making in the Company in participation of all levels of personnel besides

substantial and effective delegation has been established at levels where applicable.
Various participation programs such as 'Ala Mayar' Quality Circles movement, launched
in 1985, are encouraged to allow constructive self-expression and teamwork. The
Company training and development programs encourage members to develop themselves

Atlas Honda is playing a pioneering role in creating conditions for easy and confident use
of motorcycles all over the country. A vast and growing network of over 1600
motorcycles sales service and spare parts dealers has been established.

In order to back up this system, Atlas has set up Technical Training Centers in Karachi
and Lahore which provide several courses of varying duration and complexity for
motorcycle mechanics and users each year. Mobile training facilities take the latest
know-how, technology and maintenance of motorcycles to major rural and urban centers
around the country.



 Mr. Yusuf H. Shirazi Chairman

 Mr. Saquib H. Shirazi CEO

 Mr. Koji Nakazomo Director

 Mr. Nurul Huda Director

 Mr. Sanaullah Qureshi Director

 Mr. Sherali Mundrawala Director

 Mr. Toshitsugu Kaneko Director

 Mr. Yoshitaka Kitamura Director


 Mr. Zaryab Tarique


 Mr. Sanaullah Qureshi Chairman

 Mr. Sherali Mundarwala Member

 Mr. Nurul Hoda Member

 Mr. Amir Shakoor Khan Head of internal audit

 Mr. Ashfaq Ahmad Secretary


 Mr. Aamir H.Sherazi Chairman

 Mr. Frahim Ali Khan Member

 Mr. Iftikhar H.Sherazi Member

 Mr. Jawiad Iqbal Ahmad Member

 Mr. Saquib H.Sherazi Member

 Mr. Theresa Dias secretary


 Mr. yousuf H Sherazi Chairman

 Mr. Aamir H.Sherazi Member

 Mr. Bashir Makki Member


 Mr. Iftikhar H.Sherazi Chairman

 Mr. Mustaq Alam Member

 Mr. Zia Ullah Begg Member


 Mr. Saquib H. Shirazi CEO

 Mr. Nurul Huda VP Marketing

 Mr. Toshitsugu Kaneko VP Technical

 Mr. Suhail Ahmad CFO

 Mr. Amir Awan GM Plants

 Mr. Maqsood A.Basra GM CAMA


 Bank Al-Habib Limited

 Credit Algricole Indosuez

 Deutch Bank AG

 Emirates Bank International P.J.S.C.

 Habib Bank Limited

 Muslim Commercial Bank Limited

 National Bank of Pakistan

 The Bank of Tokyo Mitsubishi Limited

 United Bank Limited


 1-McLeod Road, Lahore.





Atlas Honda limited, being Japanese, always believe in quality leadership customer
satisfaction and satisfaction of shareholders. The executives and managers at AHL are
keen about the staff cooperation and dedication. That’s why promoting teamwork culture
is the core activity of the company. The vision of AHL as follows:

“To remain a market leader in the motorcycle industry and emerge as a globally

competitive center of production and exports.”


Mission Statement, the statement that further reveals the practicalities of any organization,
comparable to its vision statement. The Mission Statement at AHL is highlighted below:

“To be a dynamic profitable growth oriented company through market leadership

excellence in quality and service optimizing value for the shareholders and maximizing
exports. To give attractive return to business associates and shareholders as per their
expectations. Be a responsible employer and reward employees according to their
abilities and performance. To be a good corporate citizen in order to fulfill its social
responsibilities. To create and foster a network of researchers, engineers, who will make
unique contribution to the development of motorcycle industry ensuring satisfaction of
our valuable customers and protection of the environment by producing emission
friendly green products”.

The Honda Company’s purpose is indispensable to all Honda associates, when it comes to
understanding the reason for the existence of the company. Top management at AHL tries
to ensure that mission statement:
a) Is appropriate to the purpose of organization.
b) Includes commitment to comply with requirements and to continually improve the
effectiveness of quality management system.
c) Provides a framework for establishing and reviewing the specified objectives.
d) Is communicated and understood within the organization.
e) Is reviewed for continual suitability.

Strategies of Organization

“Our customers are the reason and source of our business, it is our joint aim with our
dealers to ensure that the customer enjoy the highest level of satisfaction from use of
Honda motorcycle”.

“To ensure that our product and service meet the set standards of excellence”

A dynamic, profitable and growth oriented company through market leadership,

maximizing export and excellence in quality and service;

To ensure attractive returns to equity holders; reward employees according to their ability
and performance; to foster a network of researchers and engineers ensuing unique
contributions to the development of the industry; customer satisfaction and protection of
the environment by producing emission friendly green products and to remain a good
corporate citizen fulfilling its social responsibilities in all respects.

Local Manufacturing

“To be the industry leader in indigenous of motorcycle parts”


“To develop and maintain distinct business advantage through continuous induction
of improved hard and soft technology”


“To ensure health and viability of business and the safeguarding shareholder by
maximizing profit, payment of regular satisfactory dividend and adding values of the


“To enhance and continuously update each member’s capabilities and education and
to provide an environment to encourage practical expressions of individual potential
in goal directed team efforts and compensate them attractively , according to their
abilities and performance”

Corporate Citizen

“To comply with all government laws and regulations and to maintain high
standards of ethics in all operations, and act as a responsible member of community”


The center of AHL’S philosophy is based on the company’s principle. Underlying the
company’s principle are two fundamental beliefs:

1. Respect for individuals and

2. Three Joys.


At AHL individuals are counted as a member of team that is working for the achievement
of specific targets. So here every individual from the top management to the employees is
categorized as an important part of the company. Also every associate is honored for his or
her efforts and contribution.

All members at AHL are equally recognized, no discrimination is made on the basis of
race, age, sex, religion, national origin, educational background and social and economic


AHL believe that each person working, or coming in touch with our company directly or
through our products, should share a sense of joy through the experience. This feeling is
expressed as “Three Joys”.
AHL’S goal is to provide joys to those who:
 Buy their Products.
 Sell their Products.
 Produce their Products.

Business Strategies

Business Principles

• Compliance with business principles is an essential element.

• The Board of 1irectors is responsible for ensuring that principles are communicated to
and understood and observed by all employees.
• Assurance of compliance is given and monitored each year. Compliance with the Code
is subject to review by the Board supported by Audit Committee of the Board. The Board
of Atlas Honda Limited (AHL) expects employees to bring to their attention, or to that of
senior management, any breach of these principles. Compliance of business principles is
monitored and assurance is given each year.

Honesty, Integrity and Openness

• Conduct operations with honesty, integrity and openness, and with respect for human
rights and interests of the employees.
• Respect the legitimate interests of all those with whom it has relationship.
• Compliance with laws, rules and regulations of Pakistan.
• Create working environment where there is mutual trust and respect and where
everyone feels responsible for the performance and reputation of the company.
• Equal opportunity employer.
• Safe and healthy working conditions for all employees.
• Restriction on any form of forced, compulsory or child labor.
• Provide branded products and services and offering value in terms of price and
• Products and services are accurately and properly labeled, advertised and

Corporate Strategies

Corporate Governance
• Operation s in accordanc e with principles of good corporat e

• Supply of timely, regular and reliable information to all shareholders.

Relation with stakeholders

• Committe d to establis h mutually beneficial relations with its suppliers ,

customer s and busines s partners.

Corporate Citizens

• Strives to be a truste d corporat e citizen and fulfill its responsibilitie s to

the societie s and communities.


• Continuou s improvement s in the managemen t of environmenta l


• Works in partnershi p with other s to promot e environmenta l issue s and

disseminat e good practice.


• Innovations to mee t consume r need s and respect s the concern s of

consumer s and society.

• Works on the basis of sound research and applying high quality


• Believes in fair competitio n and support s developmen t of appropriat e

competitio n laws.

• E mployees will conduc t operation s in accordanc e with the principles of

fair competition.

Quality Policy

• Commitment to provide high quality motorcycles and parts.

• Light work in first attempt and on time.

• Maintain and continuously improve quality.

• Training of manpower and acquisition of latest technology.

• Safe, clean and healthy environment.

• Market leadership and prosperity for all.

Environmental Policies

• Reduce and prevent the generation of waste and pollution in our production

• E stablish management program to promote energy conservation and reduce


• Comply with requirements of environmental legislation and local

regulations as a responsible corporate citizen.

• Promote relevant environmental protection knowledge and activities

through education and training.

• Initiate and extend environmental improvement activities from the

company itself to its business partners including parts manufacturers,
general suppliers and dealers.

Organization Structure



Finance Marketing Supply chain HRM Quality R&D

Procurement Warehouse Production Control



Departments of ATLAS HONDA are as follows.



This department has three sections



This section performs following functions

 Recruitment & selection of employees

 Training & development of employees
 Succession planning of employees


This section performs following functions

 Facilitation of company guests and executives

 Employees’ Mess management
 Utilities administration
 Miscellaneous administrative activities


This section performs following functions

• Its basic task is to build a healthy cooperation between management and



Atlas Honda has a well-established finances department. It is totally computerized .it has

its own system which is prepared by IT department.

Finance department has further following sections.




This section deals with the

• Banking matters
• Fund management
• Import accounting.


It is an important section of finance department which deals with all costing matters

including all material, labor, and overhead costs.


It deals with all tax and custom duty related affairs.


This section deals with the following activities.

 Vender payables
 Utility payables
 Insurance payables
 Tax payables
 Club payments
 Other payable


This section controls the salary system of the organization. All the system is computerized.

First of all the attendance of all employees is recorded and at the end of the month salary

of all employees are paid after all deductions like

7). General Ledger

At last all the transactions are recorded in general ledgers. General ledger for each account

is maintained separately. There is a computerized system, which then produce different



At present, many vendors are working with the company.

This department performs following functions.

• This department is responsible for all the relations and dealing with the different
• This department motivates vendors to produce excellent quality and train them to
achieve the highest level of quality.
• This department also deals with the CKD (complete knock down system).
• This department performs VIP (vendor improvement programmed). Under this
programmed the department representatives go to the vendors and train them for new
methods to produce better quality at reasonable price.

Production Department

Procurement Process:

1) Forecasted Procurement:

2) Bill Of Material (B.O.M.)

3) Price Negotiation

4) Performa Invoice is called

5) Purchase Order is placed

6) Establish Letter of Credit (L.C.)

7) Revival and Recovery of Original Documents:

- Bill of Lading
- Invoice
- Letter of Credit

8) Clearing Agents

9) Delivery and Possession of Material

Production Planning

Long range
capacity planning

Aggregate Planning

Master Production

Production Planning
& control system

Push System Pull System

Atlas Honda total plant capacity is 500,000 units in Shaikhupura and 105,000 units in
Karachi. But Honda produces motorbikes according to the market demand and customer
demand, because of this reason their plant always operates under capacity.

Atlas Honda planned to produce 400,000 units of motorbike during the current fiscal year
that is 2006-07. But they are expecting to achieve 350,000 units of motorbikes during the
current fiscal year.

Atlas Honda is using both push as well as pull system. Push system is use before
assembly plant. Pull system is used after they assemble the required units and supply
their motorbikes to their dealers so that dealer could fulfill the customer’s demand.


Total number of assemble parts 350 parts for each product.

Imported parts (CD-70) 5%

Imported parts (CD-125) 15%

Shifts in Karachi 1

Shifts in SKB 24 hour

CD 70:


Imported Locally
5% Procured 95%

Lead Time:
Lead Time: 1 week
6 months

CD 125:


Imported Locally
15% Procured 85%

Lead Time:
Lead Time: 1 week
6 months
Manufacturing Process:

In Atlas Honda there are total fourteen processes, as follows:

1. Frame Assembling
Where frame of motorbikes are produce in bulk quantity.

2. Paint shop
In paint shop nearly 110 parts of motorbikes are being painted at present.
3. Buffing
Buffing shop used to buffer 35 components of motorbike

4. Alternative Current generation

This department works on electric works in a motorbike from engine wiring to
ignition switch and light

5. Drum Gear Shift

This shop works on all work related to gear and chain

6. Drum Gear Shop

This department used to work on drums on front as well as rear drum

7. Machine Shop
In this department all the extra machine work is done

8. Fuel Cope
Fuel tank and other material related to fuel e.g. filter and carburetor are assembling

9. Die casting

In this department chrome of metal parts done by Honda by own.

10. Engine Assembling

In this shop engine is assemble in proper form to fit into chassis or frame

11. Wielding
All the necessary wielding are done here regarding frame etc

12. Ignition Coil Shop

This shop related to work on ignition coil, which is right beside engine to produce
electric for engine and light

13. Switch Assembling

Where switch of motorbike made and assemble in complete form

14. Engine Machine Assembling

Here engine is attached to frame and check whether is working fine or not.


Atlas Honda has a sophisticated IT system .the whole organization and all departments are
linked through network. Each and every department is computerized. This computerization
has reduced the Burdon on employees. Particularly the employees of finance department
have different software to support their work all these software have been developed by
company own IT department. Mostly software’s are developed in-house and some special
cases outsourcing is also being used now this IT department is converting its data base
system in to latest technique SAP which is more secure and one of the excellent computer
system for data base.

The compan y remaine d distinctly ahead in term s of Informatio n

Technology System not only among motorcycl e manufacturer s but in the
manufacturing secto r as a whole. Enterpris e Resourc e Syste m (ERP)
SAP is providing coordinatio n among departments . The compan y is alway s
exploring dynamic features to improve services to its dealer s and
customer s by optimizing available resources of information technology.
4ext year, the company is planning to launch its Busines s to Busines s
(B2B) service s to its business partners in order to improve efficiency and
reduce lead-times.


Honda atlas has the well-established and efficient marketing department. This department
handles all the marketing activities like.



There are four elements of marketing mix.
• Product
• Price
• Place
• Promotion

Atlas Honda has four products (brands)
• HONDA CD 100
• HONDA CG 125


Honda CD 70 is the No. 1 choice in motorcycles. In addition to its established superiority

in terms of great speed and fuel economy, the Honda CD 70 is presented with special
features. The new attractively designed CD 70 is right there at the top, with an
aerodynamic shape, super econo-power, a smoke-free 4-Stroke engine and the special
Honda 12-volt CDI technology.

The new eye-catching graphics, front and rear mud-flaps, comfortable seat and the new
utility box have made Honda CD 70 an ideal combination of elegance and durability.
Because of its high resale value, Honda CD 70 is an asset in your life. It’s excellent
petrol average makes it greatly economical, and its easily available spare parts ensure
trouble-free companionship.


Quality, Performance, Speed, Economy Petrol and Re-sale Value define Honda
Motorcycles. 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 they’re as an
outstanding performer representing all the qualities that make Honda motorcycles so


New Honda CG 125 is the ideal combination of elegance and power. Its speed and
performance symbolizes the true essence of modern life.

The 125 cc 4-stroke engine generates 11-Horse Power with low fuel consumption. It is
ideal for high speed, long runs and rough pathways.

Honda CG125 has a CDI Ignition System and a 12-volt battery (instead of 6-volt). The
headlight and indicators are brighter, with an easy starting-up of the engine.


HONDA CG 125 DELUXE is newly launch bike of the Atlas Honda company. It’s also a
4 stroke engine and ideal for high speed, long run and rough pathways. It’s specially
manufactured for the young people because of its excellent speed and this bike getting
good response from the youth.

All these products have a good repute in the market and that is the reason that Honda has
approximately getting more than 60% market share now a days.

The basic reason of the success of these motorcycles is the quality maintained by the
company throughout its career.

These four motorcycles are manufactured in Sheikhopura and Karachi. Both plants
produce more than 300000 motorcycles per year as a whole but still they are not able to
cover the demand. But after the launching of the new plant at Sheikhopura now Atlas
Honda is able to cover its demand as well as to export Honda bikes to the other countries.


Atlas Honda Ltd. began operations of its new motorcycle factory in Sheikhopura earlier in
the day, which increases its annual motorcycle output capacity from 400,000 units to
500,000 units. The investment in the plant is about Rs1.8 billion. Production efficiency
will be improved at the new factory by cutting down on inventory, Honda Motor said.
Atlas Honda aims to respond to the growing demand for motorcycles in Pakistan, Honda
said. The market has been expanding rapidly, and is expected to grow to 800,000 units in

For capturing more market share marketing department perform following activities




In order to get more market share atlas Honda has been introducing new models over the
time. The most recent model was launched by them in this way is Honda CG 125 deluxe.
Although they introduced new model with the passage of time but the company
maintained the quality throughout the time.


There was a great demand from the customers to launch a new model but it is a difficult job to
launch a new model so in order to fulfill the customer wants the company has a policy to change

the stickers of fuel tank and side covers and some other nominal changes in indicators
headlights etc. but the engine and other main accessories were not changed.


At the outset of company 90-95% parts were imported from Japan and were assembled in
Pakistan. With the passage of time company introduced the concept of localization the
company encouraged the local vendors and suppliers to produce the parts of motorcycle
according to the level of Honda international. So in order to maintain the quality, the parts
made by local vendors were approved by the Honda international and after that they were
used in local production. So now atlas Honda has managed to localize almost 90% of the
parts. Still 10% parts are imported from Japan. The atlas Honda also provides assistance to
their vendors to maintain high quality. They send their engineers to check the quality and
to train the vendors in order to produce the required qualitative product.


The atlas Honda has four products and their prices are as under.

HONDA CD 70 Rs. 62,900

HONDA CD 100 Rs. 69,000

HONDA CG 125 Rs. 83,400

HONDA CG 125 DELUXE Rs. 89,900

The company uses the single price strategy means the product has the same price all over

the Pakistan.

Earlier atlas Honda was the only producer of qualitative four-stroke motorcycle in
Pakistan. So they were taking the advantage of this monopolistic situation and using the
price skimming strategy and were charging highest pricing.

Uptill 17th may 2003 Honda has the high prices for it’s product due to high prices the
competitors find a gap and entered into the market with low prices and start capturing
market share by the continuous research work company reduced it’s prices, the major
reason for reducing the prices was to increase the production and to utilize full production
capacity. Now today Atlas Honda is using above pricing strategy for its bikes.

Promotional mix is

• Advertisement
• Sales promotion
• Personal selling
• Publicity

The atlas Honda uses the print media as well as electronic media. In print media the
company gives advertisements on news papers and also uses billboards on the road side for
the promotion of the product.

While in electronic media company gives their advertisement on GEO television channel
because now days this channel is getting more familiarity in public.

The atlas Honda also promote it’s product through different sale promotional activities.
• Company offers their product in different television game.
• Free service camps.

• They provide rewards and incentives to dealers on targets.

• ( incentives may include trips to Japan, Malaysia, Thailand.etc)

The company doesn’t do the personal selling but in certain cases when dealing with
corporate deals the personal selling can be considered.

It is basically a non-paid form of promotion and in this the message delivered to the
customer is not in the control of the company. It may be positive or negative.

Now days the competitors are doing the negative publicity for atlas Honda.

Atlas Honda gained good market share due to its strong distribution network. For
distribution atlas Honda has divided the whole country into two regions.

Includes following territories
• Karachi
Karachi region covers whole Sindh province
• Quetta
This covers whole Baluchistan province


It includes following four regions.

• Multan
• Lahore
• Rawalpindi
• Faisalabad

This is a new emerging trend set by atlas Honda. Now days the company is emphasizing on 5s
facilities to their customers at their dealers’ showrooms.

5s stands for the following five facilities

1. Sale
2. Service
3. Spare parts
4. Special sale
5. Second hand sales

It involves only the sale of new motorcycles.

It involves after sale service to the customers like
• Warranty claims
• Tuning of motorcycles
• Repair of motorcycles

Company also provides spare parts facility to their customer at 5s dealers in all cities of

This deals with the credit facility. In this the dealer himself provides the customer with
credit facility on his own behalf, atlas Honda do not provide any support for credit sale.


Dealer also deals in second hand Honda motorcycles. Basically the company wants that
the customer might not switch to other brand even in the second hand motorcycle and
become permanent customer of Honda.


Marketing department is divided into three parts on behalf of its functions.


It is an important division of marketing department. It is the profit centre of the company.
It deals with two types of sale.


The company provides the direct sale to the institutions. Company provides the motorcycle
to following institutions.
• Police departments
• CSD (canteen store department)
• TCS (technology communication supplies)
• Pesticide companies
• Others

This is the usual sale to the individuals.

Company---------------- dealer --------------------- customer

Functions Performed By Sale Section
The sale section of the marketing department performs the following functions
• Forecasting of sale
• Booking
• Managing the payment
• Manage the dealership network

The company follows the policy of advance booking which means company first receive
the payment and then produce the product according to demand and that is the reason that
the company has a very low amount of receivables and most of the receivables are based
on the sale made to institutions.

Sale section also deals with the showroom. There is only one showroom in Karachi, which
is looked after by the company, and this showroom is meant only for the display of
motorcycles. In the past the company used to sell the motorcycles from the showroom but
now a day’s company doesn’t sell the motorcycles from it. But only in some special cases
the company sells the motorcycles from showroom to the persons, which have relationship
to the company employee.

The second major section of the marketing department is service section. The service
section basically deals with
• Antenna or service dealers
• Warranty and training centre


These are the authorized dealers from the company. The company gives them great
autonomy while dealing with the claims and these dealers have the right to replace the
defected part without consultation from the company. Company provides two free tuning
facilities after the sale of motorcycle. Basic reason for the establishment of these dealers is
to satisfy their customer and maintain the customer loyalty. In the Multan region 22
antenna dealers are working.

In Karachi the company has a well-established warranty and training centre. This centre
handles with the service section. Warranty and training section performs the following

• Deals with the claims

• Training

The company has a policy that customer can replace the defected parts and repair within
the six months or 1000 km coverage (whatever occurs first) warranty conditions.

Warranty centre not only provide the training to their antenna and service dealers but also
the mechanics of ordinary workshop in order to develop the skilled four stroke mechanics.
The held the workshops on regular basis and invite antenna and service dealers from all
over the Pakistan.


Third and important section of marketing department is spare parts. This section is
responsible to provide the genuine parts into the market. The company has spare parts
dealer in all over Pakistan. Company also provides four stroke engines Mobil oil.
Company purchases Mobil oil from Total.

The spare parts section performs the following functions.

• Provide spare parts to the market

• Maintain spare parts stock
• Import the parts according to the demand from Japan
• Encourage the vendors to provide the parts directly to the market because
company is not able to fulfill the market demand.


Service training to VTI student

Atlas is engaged in providing technical training to student of vocational training institute.

At our service centre, different experts gave briefing and practical training to a batch of
15 students. The training is of 30 days and comprised by all service technicalities.
Training certificates were also given to these students.

Corporate Donation- Earth Quake Relief Fund

In the hour of national tragedy and devastation caused by the recent earthquake, Honda
motors of Japan and Atlas group, its local partner pledged all out support by contributing
nearly Rs. 60 million to “President relief fund for earthquake victims” as well as
providing urgent medical support to its associates and their loved ones residing in the
affected areas.

Further in the rehabilitation stage Honda and the Atlas group are not only planning to
support to reconstruct the devastated Honda dealers showroom, 4 stroke service centre
and the spare parts network but also providing mechanical training to unable the youth to
become self employed and support the transport infrastructure.

Collectively the major Japanese corporation and their local partners have so far
contributed in excess of US $ 25 million to the relief funds efforts.

Safety riding training

Including the attitude of safe motorcycling in oneself is becoming more and more
essential in view of ever increasing no of accidents. Accordingly our customer care

department conducted about 460safety riding sessions for understanding the

importance of safe driving attitude.

The training was provided to customer, traffic police, students, dealers and service
dealers. The aim of the session was to create the safety awareness amongst the every road

Chief Minister Punjab Donation CD-70

A tragic event on protest against blasphemous cartoons took place in the city of Lahore
particularly on the Mall road where many buildings and hundreds of vehicles were brunt
on Feb 14, 2006.
The Chief Minister of Punjab in compensation ordered to give motorcycle to all the
people whose motorcycles were damaged in that protest. Chief Minister Punjab decided
to give the best motorcycle available in the market and he selected Honda CD-70.

The home department of the government of the Punjab in this regard was given the
instruction to take immediate action and provide 75 units of Honda CD-70 with in two

The sales department took the task for providing these motorcycles with the help of
logistics department and the motorcycles were handed over along with the proper
documentation at the premises of the Chief Minister’s house.

The function was organized in the presence of all media channels and top civil servants.
The chief minister of Punjab thanked Atlas Honda for providing help and timely delivery
of the motorcycle for this humble cause.


During the nine month period of 2008-09, company produced 255,344

units as per sales demand, despite energy shortages and inflationary
pressures. In response to the market conditions, two shifts operation, at the
Sheikhupura plant, was replaced by an expanded single shift working.
Productivity per man and machine was enhanced by increasing the line
speed thereby saving production overheads. Seamless integration of Karachi and
Sheikhupura plants and Kaizen activities in all production units of plants,
minimized rejections, improved quality and reduction in production costs
helped the company to counter the economic pressure. The company(s
initiative of installing LPG storage facility, as back up of natural gas, helped
save production during natural gas suspension period. The company
maximized utilization of its plant capacity and is offering its manufacturing
facilities and expertise to Honda Atlas Cars (Pakistan) Limited by
manufacturing engine parts of Honda City car since January 2009.

Being an ISO 9001:2000 (Quality Management Systems) and ISO 14001
(Environment Management Systems) compliant organization, the company
periodically updates its processes and procedures through audits conducted by
independent auditors.

Sales Network

The company is aggressively expanding its network through a five pronged strategy. Its
primary reliance is still on the 5 'S' dealership, which grew by another 13 in number,
during the year. Currently the company has over 2005 'S' dealers. In addition, the
company expanded its installment dealership by 8 and Smart Sales Point by 4. The latter
is especially effective in countering the competition in the rural areas. The company is
also now exploring the idea of starting a Used Motorcycle network under the brand name
HUMS. The company feels that customer’s increasingly value exclusive re-sale outlets
as a part of the company's official network. Also an important distribution partner is the
vast service and spare parts network comprising mechanics and warranty dealers. The
company is integrating all these into a singular focus from next year.

Market share

The four model line-up of the company is a unique strength in the market. Presence in
all three segments.
Basic, Standard and Premium - creates a distinct competitive advantage for the
company. All four models have been able to carve out distinct niches

CD 70 remains the dominant bike in the 70cc segment despite the presence of over 60
competitors. The strengths, due to better fuel consumption, re- sale value and durability
mean that CD70 can still command a price premium for its higher quality. Over the
period of thirty years, over 2 million CD70s have been sold in the Pakistan market. The
competitor only copies this
motorcycle, which reflects the
Pakistan customer’s fondness for it.
Even this year, however, Atlas
Honda maintained a 50% share in
this segment selling over 200,000
units in 9 months.

CG125 maintained its leadership in the 125cc segment by capturing a share of

over 90%. Together with the premium CG125 Deluxe, the company sold over
50,000 units in this segment in the period under review. CD100 is slowly but
surely making an impact in 100cc segment. Atlas Honda historically did not
position a motorcycle in this segment but having CD100 in this category is
already proving worthwhile. The company hopes to be a leader in this segment
in due course.


The company registered sales of Rs.13.74 billion during nine months as against Rs.
20.85 billion achieved during the 12 months period last year. The cost of goods sold
was registered at Rs.12.78 billion. Gross profit percentage has slightly decreased from
7.5% of last year to 7.02% for the period under review due to depreciation of Pak
Rupee, high steel prices and lower production volume. The effect has been further
aggravated by high inflation, which created pressure on manufacturing cost.
Although the company increased the selling price to counter the cost pressures, it was
not able to pass on the whole impact to customers.

Equity and Total Asset


Total Assets

Distribution and Administrative Cost

The distribution cost and administrative expenses for the period were Rs. 436.99 million.
These expenses, if compared as a percentage of sales, were higher at 3.18 % as compared
to 2.37% of the previous year. The higher relative expenses were to support more
aggressive sales activities to counter the effects of the economic downturn. The positive
results would hopefully be reflected in the next year’s results.

Market Price Data of Shares

The following table show s the month-wis e share price of the company in
the Karachi and Lahore Stock Exchanges:

Karach i Lahore
Stock Stock
Months High Low High Low
July 08 211.8 172.9 211.80 180.0
August 08 0
189.9 0
169.6 185.0 0
Sep t 08 9
184.9 7
184.9 0184.9 0
Octobe r 08 9
184.9 9
184.9 9
184.9 9
November 08 9
184.9 9
184.9 9
184.9 9
December 08 9
184.9 9
184.9 9
184.9 9
January 09 9
169.5 9
169.5 9
184.9 9
February 09 7
161.1 7
153.0 9
169.5 7
March 09 0
145.4 587.4 7
153.0 590.0
0 0 5 3

Operating Profit

The operating profit for the period 2 0 0 9 was Rs. 604.55 million which was 4.4% of
sales as against 6.02% of last year. During the period, financial charges increased from
Rs. 252.09 million in the nine months due to the higher borrowings to meet higher
working capital requirements. At the same time, the company reduced its investments
to generate liquidity. As a result, other income was sharply lower at Rs. 89 million as
compared to Rs. 263 million in last year. However, the company feels that this was a
temporary reduction. With adjustment in inventory and improved sales, the company
once again reduced all its short term borrowings by the end of period under review.
At the beginning of the New Year, the company is once again sitting on substantial
liquidity, which augurs well for increase in other income next year.

Operating Profits

1200 1061.3 1101 1061.3

(Rupees in millions)

1000 898.9

2004 2005 2006 2007 2008

Net Profit of Atlas Honda

Net Profit

800 703
(Rupees in millions)

700 597.1
600 544.7 553.6
2004 2005 2006 2007 2008

Change in Cash and Cash Equivalents

As a result of the improved inventory and liquidity position by the end of the year,
the company generated positive cash flow in excess of Rs. 200 million for its
operating activities. The company also continued to be one of the leading contributors
to the exchequer, generating nearly Rs. 3 billion in respect of sales tax, income tax and
custom duties. This makes Atlas Honda one of the biggest tax payers in the country.

Number of Shares and Shareholdings

AS A MARCH 31, 2009

Shareholders Category of Percentag
Shares held e
Associated Companies, Undertakings and related Parties:
Atlas Insurance 6imited 1,340,981 2.84
Honda Motor Company 6imited 16,554,460 35.00
Shirazi Investments (Pvt) 6imited 11,556,671 24.43
Shirazi Capital (Pvt) 6imited 11,599,600 24.52
41,051,712 86.79
4IT and ICP:
4ational Bank Of Pakistan Trustee 1epartment 257,743 0.55
Investment Corporation Of Pakistan 531 0.00
I1BP (ICP Unit) 785 0.00
259,059 0.55
1irectors, CEO and their Spouses and minor children and Associates:
Mr. Yusuf H.Shirazi & Associates 4 0.00
Mr. Saquib H. Shirazi (CEO) 1 0.00
Mr. Sanaullah Qureshi 185 0.00
Mr. Sherali Mundrawala 6,803 0.01
Mr. Masahiro Takedagawa 1 0.00
6,994 0.01
Executives - -

Public Sector Companies and Corporations - -

Banks, 1evelopment Finance Institutions,

Non-Banking Finance Institutions, Insurance
Companies, Modaraba and Mutual Funds. - -

Individuals 4,090,552 8.65

Others 1,890,138 4.00

Total 47,298,455 100.00

Shareholders holding 10% or more voting interest:

Honda Motor Company limited 16,554,460 35.00
Shirazi Investments (Pvt) limited 11,556,671 24.43
Shirazi Capital (Pvt) limited 11,599,600 24.52

AS AT MARCH 31, 2009

No. of shareholders Shareholding Total share s held
418 From 1 To 100 14,649
272 From 101 To 500 72,604
111 From 501 To 1,000 79,950
220 From 1,001 To 5,000 510,667
72 From 5,001 To 10,000 518,459
23 From 10,001 To 15,000 279,159
16 From 15,001 To 20,000 284,188
6 From 20,001 To 25,000 125,144
4 From 30,001 To 35,000 131,044
2 From 35,001 To 40,000 74,969
2 From 40,001 To 45,000 86,292
1 From 45,001 To 50,000 48,151
4 From 50,001 To 55,000 207,097
3 From 55,001 To 60,000 168,583
1 From 65,001 To 70,000 69,396
2 From 70,001 To 75,000 145,902
1 From 80,001 To 85,000 80,888
2 From 95,001 To 100,000 198,212
1 From 100,001 To 105,000 104,119
1 From 200,001 To 205,000 204,900
1 From 205,001 To 210,000 208,340
1 From 255,001 To 260,000 257,743
1 From 320,001 To 325,000 320,808
1 From 470,001 To 475,000 470,169
1 From 1,340,001 To 1,345,000 1,340,98
1 From 1,585,001 To 1,590,000
1 From 11,555,001 To 11,560,000
1,1711 From 11,595,001 To 11,600,000 47,298,455

Ratio analysis
Ratio analysis involves the methods of calculating and interpreting financial ratios to
assess the firm’s performance and status. The basic inputs ratio analysis and the firm’s
income statement and balance sheet for the periods to be examined.

Types of financial ratios

 Liquidity ratios
 Activity ratios
 Debt analysis ratios
 Profitability ratios
 Marketability ratio

1) Liquidity ratios:
 Net working capital
 Current ratio
 Quick(acid—test) ratio
 Cash ratio

Liquidity Ratio:
Liquidity Ratio that measure a Firm ability to meet short term obligation.

a). Current Ratio:

Measures ability to meet current debts with current assets.

Current Ratio= Current Assets/Current liabilities

2004 2005 2006 2007 2008

1.43 1.44 1.32 1.29 1.31

Current Ratio

Current ratio
1.25 year
2004 2005 2006 2007 2008

Current Ratio is increasing and decreasing with nominal difference mean
current assets and current liabilities are about same difference then the previous years.

b). Quick Ratio:

Measures ability to meet current debts with most liquid (quick) current assets

Quick Ratio = Current Assets – Inventories/Current Liabilities

2004 2005 2006 2007 2008

0.62 0.82 0.55 0.70 0.75

Quick Ratio

Quick Ratio
0.2 Quick Ratio
2004 2005 2006 2007 2008

Quick Ratio shows the positive situation of organization according to standard
because stander is 0.5 but as comparison with previous year’s ratio organization ratio increases

c). Net Working Capital ratio:

The net working capital of a business is an indicate of the
shot run solvency of the firm.

Net Working Capital = Current Assets – Current Liabilities

2004 2005 2006 2007 2008

809.1 (million) 1277.6 962.8 972.7 1253.7

Working Capital


Amount in millions
working capital
2004 2005 2006 2007 2008


Atlas Honda ltd. NWC shows positive balance. It means that company having
ability to meet its short-term obligations when they come due. Also this balance has improved
from previous year, which shows that company is more efficient in selling its inventory as
compare to previous year. It’s also quit useful for internal control.

Activity Ratios
 Inventory Turnover
 Total Asset Turnover
 Fixed Asset Turnover
 Average Age of Inventory
 Average Receivable period
 Average Payment Period

a). Inventory Turnover =Cost of Good sold /Average inventory.

2004 2005 2006 2007 2008

10.359 (times) 10.676 6.781 8.150 8.15

Inventory turnover

10 9.1
8 7.1 7.6
6.1 6.7
2 inventory turnover
2004 2005 2006 2007 2008


The inventory turnover ratio of the company is good .But it improves in 2007 and 2008.Overall
inventory turnover of firm show the positive sign.

b). Total Assets Turnover :

Total Asset Turnover = Net sales /Total Assets

2004 2005 2006 2007 2008

2.4 (times) 2.3 2.3 2.1 2.4

Total Asset Turnover

2.4 2.4 2.4

2.3 2.3 2.3
Times 2.1
Total Asset Turnover
2004 2005 2006 2007 2008

It maintain the same level as in 2004.It show improvement.

Average Age of Inventory:

Average Age of Inventory= 360/ Inv.Turnover

2004 2005 2006 2007 2008

59.0163 (Days) 50.70422 53.73134 47.36 39.56

Average Age of Inventory

60 59.016
50 50.704 53.731 47.36
40 39.56
Days 30
20 Average Age Of Inventory
2004 2005 2006 2007 2008

In 2008 the company is able to sell its inventory, so this ratio has
decreased, which shows efficiency of firm in selling its inventory as compare to previous

Fixed Assets Turn over:

Fixed Assets Turn over = Net Sales/Fixed Asset

2004 2005 2006 2007 2008

7.1 (times) 7.5 4.8 4.6 6.1

Fixed Asset Turnover

8 7.1 7.5
6 6.1
4.8 4.6
Times 4

2 Fixed Asset Turnover

2004 2005 2006 2007 2008


As firms fixed assets turnover ratio increased in 2008 as compare to

previous two years 2006 and 2007.This show that this year company has utilized
maximum its fixed assets efficiently to generate more sale.

Average Collection Period:

Average Collection Period= A/C receiveable/Avg.Sale Per Day

2004 2005 2006 2007 2008

2 (Days) 3 4 6 6

Average Collection Period

6 6 6
4 4
Days 3 3
2 2
2004 2005 2006 2007 2008

The company can’t offer much credit sales. Account receivable
management is effective.

Average Collection Period:

Average Collection Period= A/C Payable/Avg.Purchase Per Day

2004 2005 2006 2007 2008

49(Days) 55 54 65 57

Avg.Payment Period

Days 40
20 Avg.Payment Period
2004 2005 2006 2007 2008

3). Debit Ratio

 Debt Ratio
 Debt Equity Ratio

a). Debit Ratio = Total liabilities/Total Assets

2004 2005 2006 2007 2008

0.256 (%) 0.658 0.658 0.629 0.608

Debt Ratio

Debt ratio (%)
0.2 Debt ratio(%)
2004 2005 2006 2007 2008

The higher this ratio, the greater the firm’s degree of independent and
more financial leverage it has.

b). Debit to Equity Ratio:

Debit to Equity Ratio =Total liabilities/Shareholder Equity

2004 2005 2006 2007 2008

1.80 (times) 1.90 1.92 1.70 1.56

Debt Equity Ratio

Debt Equity
0.5 Debt Equity Ratio

2004 2005 2006 2007 2008


As company’s liquidity portion decrease, so debt equity ratio has decreased. This causes
their earning per share to reduce and liabilities are short term.

4.) Profitability Ratio:

Profitability ratio indicates the firm ability to Generate


a). Gross Profit Ratio:

Gross Profit Ratio = Gross Profit/Net sale

2004 2005 2006 2007 2008

12.4 (%) 9.5 9.4 9.4 7.5

Gross Profit Margin

10 9.5 9.4 9.4
Gross Profit Margin 8 7.5
% 6
4 Gross Profit Margin
2004 2005 2006 2007 2008

Organization gross profit decrease means organization cost of good sold
increase so organization earning decrease.

b). Net Profit Ratio:

Net Profit Ratio= Net Profit (After Tax)/Net Sale
2004 2005 2006 2007 2008

5.5 (%) 4.2 3.9 3.3 3.4

Net Profit Ratio

6 5.5
4.2 3.9
4 3.4
Net Profit Ratio % 3
2 Net Profit Ratio
2004 2005 2006 2007 2008

Organization Net profit ratio decrease means organization cost of good
sold increase so organization earning decrease.

c). Operating Profit:

Operating Profit = Operating Profit/Net Sale

2004 2005 2006 2007 2008

8.78 (%) 6.36 6.32 5.91 5.08

Operating Profit Ratio

6.36 6.32 5.91
Operating Profit 6 5.08
Ratio % 4
Operating Profit Ratio
2004 2005 2006 2007 2008


Organization Operating profit ratio decrease means organization cost of good sold
increase so organization earning decrease.

d). Return On Assets:

Return on Assets = Net Profit /Total Assets

2004 2005 2006 2007 2008

13.24 (%) 9.80 8.87 6.88 8.07

Return On Assets

15 13.24
10 9.8 8.87 8.07
ROA (%) 6.88
2004 2005 2006 2007 2008

A firm’s total assets has increased but firm is not utilizing its fixed assets
efficiently so the profit decrease as compare to 2004, which cause return on investment to

e). Return on Equity:

Return on Equity = Net profit /stock Holder Equity

2004 2005 2006 2007 2008

33.1 (%) 28.7 25.9 18.6 20.7

Return On Equity

35 33.1
30 28.7
25 20.7
20 18.6
ROE (%)
10 ROE
2004 2005 2006 2007 2008


Firm is making investment through stockholder’s equity so the return on

equity has decreased. More over the profit also reduced in this year.

e). Earning per Share:

Earning per Share =EAFCS/Common stock Outstanding.

2004 2005 2006 2007 2008

11.5 (Rs) 12.6 14.3 11.7 14.9

Earning Per Share


EPS (Rs)

2004 2005 2006 2007 2008


The reduction in EPS is due to low profit for the year and more capital
raised by owners. As firm is not raising long term liabilities rather using owner’s capitals
which cause profitability to reduced. This situation of the company May not attract more

5). Marketability Ratio:

a). Price Earning Ratio:

Price Earning Ratio = Market Price per Share /EPS

2004 2005 2006 2007 2008

15.2 (times) 24.2 15.5 13.5 14.1

Price Earning Ratio

P/E Ratio (%)
P/E Ratio
2004 2005 2006 2007 2008

As earning per share has reduced which because price-earning ratio to

increase market price of their stock is also reduced significantly which is not good sign
for the company.

SWOT Analysis of Atlas Honda


 Brand image
 Japanese technology
 Market Leaders (60%)
 Financially strong
 Greater retained earning
 Good mileage
 Durable
 Reliable

 Good Resale value
 New vision 5s showrooms
 Strong brand image/loyalty
 Model acceptability
 Qualitative Product
 Good image/reputation of company and product
 Devoted and committed employees
 Good service & spare parts network

 Large network of Dealers in all cities

 Efficient delivery to dealers

 Availability in all over the country

 Continual advertisement through
 T.V ads
 News papers
 Billboards
 Public campaigns
 Selection of employees on merit base
 Personal and career development
 Good flow of communication
 Good working environment

 Open door & wall less offices
 Personal Celebration
 Effective Appraisal system
 Promotions, increments, bonuses
 Friendly environment

 One price policy all over the country
 Economical price
 Low maintenance cost

 Availability of substitutes
 It could not provide credit facilities to dealers
 It is not use on commercial basis

 Limited weight capacity

 Paying big royalty to Japanese

 Pay less attention to new features

 Less Participation in Small Towns
 Less promotional activities
 No real 5S concept
 Leasing sale (ineffective 5S dealership)
 Lack of Investment

 Growing market

 No big competitors
 Due to awareness customer want quality
 Opportunities for export in the developing countries
 Regular corporation & rent a bike business
 Rural customers
 Foreign investment
 Changing economic trend
 Low quality of Chinese
 Customers intent to purchase new bike instead of old bike
 High duties on imported bikes

 Entrance of Chinese bikes
 Increase sale of dyl (Dawood Yamaha Limited) 70 cc
 Customers expect more
 Increase in inflation
 Bad economics situations
 Increased prices of petrol
 Re-entrance of Kawasaki company

 Availability of cheap Chinese spare parts

 Increasing Chinese network

 Increasing trend on long term sale by Chinese

 Improper credit management
 Sensitive market regarding rumors
 Mostly illiterate customers

 Antenna dealer's attitude problem
 Main sales dealers have old working style

 Service Network should be improved

 Delivery should be effective and efficient to the showrooms through plant

 Enhance product mix

 Increase in promotional activities

 Addition in electronic media

 Price Gap

 Participation in Small Towns

 Lease Dealerships like Chinese

Suggestion and Recommendations

1. AHL is a leader in motor bike industry in Pakistan but it should not be proud enough
but to be used on the continuous improvement theory in all its policies
2. System, procedure even it should about after period modification to make them stylish
and according to the trends of the market.
3. AHL must create economies of scale in order to develop good quality and standardized
products and to need is to enhance its production level as per demand.
4. On plant there is need to make AHL environment more attractive and
landscaping is to be made to make it dream organization.
5. In AHL there should be separate research and development department R &D for the
continuous improvement in all aspects of the business of AHL.
6. Technological upgrading within short span of time so that plant must to be a strategic
advantage or competitive edge not only in Pakistan but in Asia.
7. Instead of all AHL is performing its best in Pakistan. AHL under pin the economic
system and provide it with the required strength and vigor. AHL has shown strong
commitment and response, great confidence in Pakistan. The operations of the bank
are carried on latest computers network, which has increased the efficiency of the
AHL manifold. On the whole the services provided by the AHL are fantastic, as I have
worked in AHL it seems that the customers are happy from the services provided by the
AHL and they are satisfied. There is need for reduction in expenditure for the
maximizing of profit. The savings should be invested in the growth of the AHL.
Although AHL is performing well it should invest in other to become the leader in
Pakistan economy.
8. In AHL environment use of computer is pre requisite but we must try maximizing to
develop paperless environment with in an organization and the people link to AHL like
vendors, or dealers to generate computer generated reports.
9. Although AHL gives leadership strategies in the market as 5s but there is need to
improve dealers perception, towards customer, need is to educate dealer accordingly
and adopt some type of motivation tools to boost up his morale and loyalty level to

company. In this situation dealership given criteria must be so strict to qualify to generate
good dealer network which are the back bone of AHL.
10. In AHL environment use of computer is pre requisite but we must try maximizing to
develop paperless environment with in an organization and the people link to AHL like
vendors, or dealers to generate computer generated reports.
11. Conservation of energy is near to nil, when it comes to turning off monitors,
everybody can use monitor auto power off option for that..
12. Stationary should be given to each shop or department once in the month till some
emergency requirements. There should be a chart of expected demand of each
13. On Friday there is a break from 1:00 pm to 2:00 pm for lunch and to offer the prayer.
Time is sufficient but in such a large group like Atlas Group, there will be
a mosque inside the factory.
14. You should ensure different suitable types of Recruitment i.e. College
15. Have Seminars in different universities
16. Offer visits to different universities
17. Offer internships to different universities
18. Ensure our participation in different Exhibitions and Functions encompasses
industrial sector in different universities and Associations.
19. Job Advertisement on Website
20. For this purpose need to upgrade our website with an addition of career tag on our
website to Convey career path and growth at EDMF to our Applicants
21. Inform current opportunities for job, internships, apprenticeships etc
22. Performance Appraisal programs should be revised by following changing trend and
employee’s behavioral elements etc.


Being internee I was limited to specific departments, material and working

procedure. I had no authority so I was not responsible for anything; this is great if
you do not want to learn anything. But if you want to learn something you should
be made responsible for different things so that you should feel yourself a part of
the organization and then you will be able to add something to their culture. I
would not call it a restriction by company but to be very precise it is a drawback of
internship process. In most of the time, the internee was given different tasks depending
on the urgency, necessity and priority. This could make it difficult for the internee to
concentrate on specific area .


Atlas Honda (Pakistan) Limited is one of the leading automobile manufacturing

companies in Pakistan, providing innovative and advance technology to its customers. The
company has a blend of Japanese and local culture providing excellent growth
Efficient supply chain management system should be the key concern for any
manufacturing company. To remain in competition for it’s timely fulfilled of order Atlas
Honda in not an exemption. Supply chain department in Atlas Honda Pakistan is separate
but it integrates with other departments through which respective departments have a
better picture of production plan and capacity.
Whereas Atlas Honda performing in a best manner for achieving 65.7% of market share.
The Supply chain department of Atlas Honda is focusing on supplier suppliers to
Customer Customers.
The Production area is well defined it’s organized in such a manner that the faults are less;
the MPS (Master Production Schedule) system helps them to identify the forecasting
factor of each production plan. The MPS indicates the shortage or the excess of the finish
goods; it’s a kind of forecast through which you can have a finish good picture for a
specific Production plan or the requirements of upcoming production
Procurement process of Atlas Honda Pakistan is well organized. All the requirement of
the production department is fulfilled in no time because they forecast the procurement
plan for upcoming 3 months; the reason behind for forecasting for the next quarter is to
avoid the shortfalls.
They are also performing the pull strategies when their dealers require the motorbike
form them so then they will supply on the immediate bases. It means their customer
should not wait for along time to get the bike. Right time delivery to the right customers.

a). Cut Down Prices by Atlas Honda
In order to compete Chinese motorbikes and to get more share in market and to remain a
market leader Honda must cut down its prices.
Cost of producing parts and components locally can be brought down by:

a). Establishing raw material coops under the Private Sector Associations to reduce
prices of all raw materials

b). Establishment of Motorcycle Parks in Lahore, Sheikhupura, Karachi and at Hub with
self generation of electricity based on gas, provision of land at reasonable rates, and
common facilities for training and testing

c). Establishment of Technology Acquisition Fund to assist parts and component

manufacturers to acquire technology

b). Export Measures by Atlas Honda

In anticipation of being able to export from Pakistan, Atlas Honda has taken the
following measures:

1. Setup a new world class production facility near Lahore which can assemble a
motorcycle in 35 seconds. This is regarded as one of the most modern Honda plants

2. Atlas Honda has successfully negotiated global rights with Honda Japan to export the
70 CC motorcycle and regional rights for the 125CC motorcycle

3. Honda Japan has acknowledged the quality standards and commitment of Atlas Honda

4. Atlas Honda has helped upgrade capabilities of its component manufacturers to

international standards

5. Achieved 93.0% localization which gives them a cost advantage

6. Worked actively with their supply chain to reduce costs of the components

7. As arranged over 20 technical collaborations for its vendors in Pakistan with the
Japanese manufacturers

8. Forcefully presenting their case at all forums

c). Global Industry

The auto industry of which the motorcycle industry is a part has got deep backward
(metals such as steel, aluminum. Copper, rubber, chrome, nickel, plastic, paint, glass,
textiles, electrical, capital equipment, trucking, warehousing) and forward (dealerships,
retailers, banking, credit and financing, insurance, logistics, advertising, repair and
maintenance, petroleum products, services, parts) linkages as such any major shifts in
demand are felt in a variety of other industries.

The industry Worldwide has seen a tremendous growth in the past two years. Production
in 2005 has been estimated at 40.0 million units with China producing 17.0 million units.
This global surge in demand has also been felt in Pakistan where the industry in the
financial year ending June 2006 manufactured more than 750,000 units.

There are currently 43 Original Equipment Manufacturers (OEMs) in the Industry. These
include 6 OEMs who are members of the Pakistan Automotive manufacturers
Association (PAMA) and 37 OEMs who are not PAMA members. These OEMs are
supported by nearly 2,000 parts and component manufacturing units employing close to
50,000 persons.

The industry is volume driven and needs a critical mass before costs and hence prices can
start coming down. This critical mass has been reached and the prices in Pakistan have
on the average come down by 30% in the past 5 years.

The development of China as the major player in the global motorcycle industry has been
achieved by linking its strong domestic demand to the abundance of low technology
dependent manufacturing or cloning. Pakistan faces a similar situation with its current
suppressed demand.

d). Pakistan Motorcycle Industry
In Pakistan, motorcycle assembly started in 1964 when the local Atlas Group started
assembling Honda motorcycles in Karachi. Currently in addition to Honda, the other
Japanese brands being manufactured in Pakistan include Yamaha and Suzuki. The most
successful design among the Japanese brands has been the Honda 70CC which enjoys
tremendous popularity on account of its fuel economy, resale and low maintenance

The Pakistan Automotive Manufacturers Association (PAMA) was formed in 1984.

Initially three motorcycle OEMs namely Atlas Honda, Dawood Yamaha and Suzuki
Motorcycles Pakistan became PAMA members.


Per capita income in Pakistan has increased in the past 5 years at an average annual rate
of approximately 14.0%. The economy is projected to continue to grow at more than
7.5% in the coming decade. Assuming an annual decrease in number of persons per new
motorcycle purchased in the next 5 years at 14%

Projected Demand for New Motorcycles

Per Total Annual
Projected Population
Year Capita Demand Units
Population 000’s Per New

2006-07 966 159,573 179 890,000

2007-08 1,100 162,924 154 1,050,000
2008-09 1,255 166,345 132 1,250,000
2009-10 1,430 169,839 113 1,500,000
2010-11 1,645 173,405 97 1,780,000

The reasons behind the rise of Pakistan as the major motorcycle producing region

a. Increasing consumer affluence; there is a positive correlation between consumer

income and motorcycle purchase, however, after a certain point any further increase in
income leads to a shift from motorcycles to automobiles. This trend has already been
witnessed in Japan, Taiwan and South Korea, however in the bulk of the Asian markets,
including China & India, there is still some distance to cover.

b. Greater urbanization; this coupled with increasing income leads to a greater desire for
mobility. This trend is currently being witnessed in China, India and Vietnam.

c. Lower prices and faster model changes; the motorcycle industry is a volume driven
industry, a certain critical mass is required before prices can start dropping and faster
new model introductions become feasible.


As already stated above, Pakistan’s domestic market has reached the critical mass which
may lead to further economies of scale. It is therefore important to put in place measures
which not only sustain domestic demand growth but also encourage exports.


At the moment Pakistan does not have an export strategy which facilitates exports of
either motorcycles or components. Although the domestic market is reasonably well
protected under the TBS(Tariff Based System), yet no significant industry specific
measures and support is provided to the

In 2005 - 06 only Atlas Honda reported exports of motorcycles to Afghanistan and

Bangladesh. Dawood Yamaha also exported some units to Afghanistan. However their
numbers could not be confirmed. As suggested by the OEMs, following measures will be
required to make exports from Pakistan possible:

a). Refund of the customs duty paid on raw materials used by component industry,
Industry estimates that this would reduce prices by about US$85 per unit
b). As freight from Pakistan is very high, it is suggested that this be refunded from the
Export Development Fund as us being done for many other products e.g. fruits,

vegetables, leather garments and non traditional export items The impact of this measure
is expected to reduce export prices by another US$30

c). An Auto Tax Collection Unit be setup within CBR where all taxes including customs
duty, sales tax, excise duty, corporate tax may be collected under one roof thereby
leading recording at one place which will ease in refunds in case of exports
d). Atlas Honda feels that it can export 100,000 units if the above facilities are

Results of Proposed Measures

Recommended measures will enable motorcycles production to increase from the present
level of 750,000 units to over 1.7 million units including exports of 100,000 units by
2010 -11. This can be achieved by making financing available through banks.
The proposed measures will result in the creation of an additional 500,000 new jobs,
cumulative increase in Sales Tax collection of Rs.20.25 billion, Custom Duty of
Rs.13.60 billion and new registration charges of Rs.5.4 billion (Thereby giving a total
cumulative marginal revenue of Rs.39.25 billion to the Government)