In a significant setback for Honda Atlas Cars (HCAR), the company’s profit-after-tax (PAT) has witnessed a staggering 82% decline, plummeting to just Rs143.25 million in the third quarter of its fiscal year 2023-24. This stark contrast is against the Rs810.82 million PAT recorded in the same period the previous year, highlighting the severity of the downturn.
The primary culprit behind this financial downturn is a massive decline in sales, which saw HCAR’s sales drop by 46%, from Rs22.95 billion in the same quarter last year to Rs12.43 billion in the current fiscal year.
Consequently, the company reported a gross profit of Rs1.03 billion in 3QFY24, reflecting a nearly 43% decrease from Rs1.79 billion in the same quarter of the previous year. Surprisingly, despite the drop in gross profits, HCAR’s gross margins actually rose to 8.3%, up from 7.8% in the same quarter last year.
Administrative expenses saw a notable increase, rising by 24% to Rs398.4 million in 3QFY24 compared to Rs321.6 million in the corresponding period last year.
Other contributing factors to HCAR’s financial woes include an 11% decline in other income, standing at Rs288.19 million in 3QFY24, and a substantial 40% increase in finance costs, reaching Rs443.27 million. The spike in finance costs is attributed to the prevailing increase in interest rates during the period.
Honda Atlas’ Last Month Sales
Hyundai Nishat sales observed a downtrend of 11%, selling 901 units last month compared to 1,015 units in November 2023. Honda Atlas sold 787 units of City and Civic and 114 units of BR-V.
The car sector in Pakistan stands at a critical juncture. And it is clear that economic stability will still be a long time coming – will undoubtedly continue to cast a pall over Pakistan’s already vulnerable car industry.
As per the latest report from the Pakistan Automotive Manufacturers Association (PAMA), there was a 10% month-on-month (MoM) decline in car sales last month, with 5,816 vehicles sold, as opposed to the 6,475 units sold in November 2023.
Comparing year-to-year (YoY) data, a significant 66% drop is observed, as car manufacturers managed to sell only 17,012 cars during the corresponding period last year.
Honda is not making any efforts to improve their car sales in any domain, seems they are comfortable with current scenario and has no interest in public whatsoever. Public is doing right to boycott purchases against exorbitant prices.
This is what happens when you have zero market research and concerns. Honda is beyond pathetic.
Honda seems ready to bear the down turn in sales with extremely high profit margins, With the amount of units sold ideally they should have been in operational losses. Lets see how much further this policy can stand with them.
One thing that Pakwheels has missed is that Honda in their 3S/2S dealers are also pushing unnecessary repairs to sell more and more spare parts at extremely high prices. Like more than 100 times the market rate.