Atlas Honda may consider launching 250cc and 500cc motorcycles in Pakistan if demand for higher-engine-capacity bikes continues to improve, according to a corporate briefing note issued by Topline Securities following the company’s management session.
The briefing, held with Atlas Honda CEO Saquib Shirazi and the company’s management team, covered sales performance, production capacity, market demand, localization, and future growth plans.
Demand Moving Toward Higher-CC Bikes
Atlas Honda remains Pakistan’s dominant motorcycle assembler, but its sales mix is gradually shifting. According to the briefing, the 70cc segment still makes up around 50 to 55 percent of Atlas Honda’s sales, while motorcycles above 100cc now contribute nearly 40 to 45 percent.
That shift matters because higher-capacity motorcycles generally carry better margins than basic 70cc commuter bikes. Management also said higher remittances have supported demand for bigger bikes. If this trend continues, Atlas Honda may explore 250cc and 500cc models, though no formal launch plan has been announced yet.
Double-Digit Growth Expected in MY27
Management expects double-digit volume growth in MY27, supported by better shareholder returns, continued dividend payout, after-sales and dealership network expansion, and a stronger contribution from higher-margin models.
Atlas Honda’s scale remains a major advantage. The company’s current rated capacity is 1.65 million units annually, equal to about 137,500 units per month. In May, production reached 163,000 units, exceeding rated capacity and supported by overtime and vendor arrangements.
Capacity Expansion by December 2026
Atlas Honda is working to increase annual capacity to 2 million units, or around 166,000 units per month. The expansion is expected to be completed by December 2026, with an estimated capital expenditure of Rs. 5-6 billion.
Management said the company can already assemble more than 2.5 million bikes annually, while engine capacity is lower at above 2 million units and vendor capacity is around 1.5 million units. That means future growth is not just about factory space, but also about engine production and supplier strength.
No Separate EV Expansion Planned Yet
Despite rising attention around electric bikes, Atlas Honda does not see an immediate need for separate EV-focused capacity expansion. Management said future expansion will depend mainly on growth in internal combustion engine motorcycle sales, while existing capacity is considered sufficient to meet current EV demand.
This reflects the reality of Pakistan’s motorcycle market. Electric two-wheelers are gaining visibility, but petrol bikes still dominate due to upfront affordability, confidence in range, familiarity with repairs, and resale trust.
Chinese Bikes Lose Market Share
The briefing also noted that Chinese motorcycle players have lost sales momentum. Their current volume is estimated at around 400,000 units, compared to a historical peak of 1.2 million units.
Pakistan’s overall two-wheeler market is estimated at around 2.3 million units, including non-PAMA players. That remains below the 2017 peak of 2.7 million units, showing that the market is recovering but has not yet returned to its previous high.
Strong Localization Supports Margins
Atlas Honda’s 70cc motorcycles are more than 95 percent localized, with key inputs such as steel and aluminum sourced locally. However, raw material costs remain linked to international commodity prices, particularly the London Metal Exchange.
To manage this risk, the company keeps three to six months of raw material inventory, which helps protect margins from short-term price volatility.
Management also said Atlas Honda has not increased prices over the last three years, apart from levy-related adjustments. This has helped the company retain customers in an extremely price-sensitive market.
Rural Buyers Remain Key
Atlas Honda remains positive on rural demand, as around 60 percent of its customer base is linked to the farming sector. Any recovery in crop prices and farm income could support motorcycle sales in the coming year.
Auto Policy Still Unclear
On policy developments, Atlas Honda said discussions on a new auto policy remain speculative for now, with no official announcement yet. The company also noted that recent tariff changes under the FY2026-27 budget have not materially affected the motorcycle industry at this stage.
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