“An Opinion “
Did Honda Atlas Pakistan underestimate the segment and the market trend ? Is it too late ?
I think , there is still time to correct the course of action to remain relevant .
The craze for the Crossover Utility Vehicles / CUV and Sports Utility Vehicles/ SUV is increasing day by day. Every other manufacturer is bringing in their version of SUV or crossovers simply because there is a lot of demand. Globally conventional sedans sales are hit in negative and buyers are more towards anything which is riding high off ground . Brand like Toyota and Honda already have decent number of offerings in the CUV/ SUV range.
The new entrant in Pakistan took the opportunity and introduction of Sportage has shown the same trend in our market and Tucson will further solidify the fact that consumer in Pakistan market also moving towards this new segment which was previously not explored. The decline in sales of Corolla and Civic statistically verify that buyer are moving towards crossovers currently available in the market.
Well, in our market Sportage and Tucson are well known and attractive option BUT globally there are bigger players which has taken over the world market. Products like Honda CR-V and Toyota RAV-4 which are sold over 700,000 units globally and best sellers are way ahead statistically as far as sales and no one needs to prove their success, refinement and acceptance . Briefly Tucson and Sportage are not bad vehicles at all but globally and in other markets when it comes to options, CR-V and Rav-4 takes priority among buyers.
Arrival of Sportage and Tucson in Pakistan was well known and crystal clear fact since start of 2018 when Hyundai and KIA just started erecting their assembly plants. We should appreciate KLM for their very aggressive operation, that within 18 months since the signing of their contract with Government of Pakistan, they established a new plant and also produced a locally assembled vehicle .
The existing player like Honda and Toyota with decades old well-grounded footing in the country was well aware of the all the upcoming competition from Hyundai and KIA. Did they took it too light and irrelevant ? Or like same old mindset and typical cartelization, never bothered about moving in different direction ?
Well.. Honda City with 10 years in production explains it. Although both Toyota and Honda are relevant here , I will go over what Atlas could have done since 2018 after the market trend was about to change within the country and by new entrants.
𝙃𝙤𝙣𝙙𝙖 𝘾𝙍-𝙑 [ 𝘾𝙆𝘿 ]
CR-V is a very well-known and awarded vehicle in the compact crossover segment. If it sells on average over 350,000 units just in United per year and sold over 750,000 units in 2019 globally then we must accept that there is some flare in the product . Currently it is 5th generation and produced in multiple countries and for sale over 150 countries. The 5th Generation was revealed in Oct 2016 in United States in 2017 onwards, it started showing up in different markets. CR-V is priced around same as Sportage or Tucson in overseas market and they compete each other is the same segment.
Honda Atlas also introduced it BUT as CBU in May 2018 at a price of 9.5 Million which now currently cost near 12 Million. Honda Atlas is importing a 2.0L Naturally Aspirated front wheel drive model with around 151Hp and CVT transmission. Obviously at this price of around one dozen millions, no one would buy it as CBU when there are options of Sportage and Tucson at half the price regardless of how well built , good and better equipped is the CR-V.
The Honda Atlas could work it out “IF THEY WANTED” and locally assemble it at Manga Mandi Lahore as CKD. The current fifth generation CR-V shares platform, engine options, transmission and other components with the 10th generation Honda Civic, which Honda Atlas already assembling locally. The CR-V sits higher from ground BUT driving dynamics wise , it is like Civic, well planted to the road.
CR-V is available in different engine options globally and 1.5L Turbo engine being one of it which is exactly same as in Honda Civic . In CR-V the same engine produce around 190HP and use the same CVT transmission as in the Civic. The 1.5T is also available both in AWD and FWD options.
Beside this CR-V is also available in 2.4L Petrol, 2.0l Petrol hybrid, 1.6L Turbo diesel. Interestingly , the CR-V is also available in third row options in limited markets and like even in Indonesia. Just an added info , Honda Atlas follow Honda Indonesia for development of their local Pakistani products. Honda Atlas could have develop a 2.0L CR-V as well as 1.5T CR-V.
So, although CBU is not the winning formula and will never be , Atlas could have worked on development of CR-V as PKDM instead. As I said, it shares components with Civic and shares a platform as well, we can say some work was already there and preformed while developing of a local Civic. In other words, a CKD CR-V would have lesser developmental cost. The current CR-V will still remain in production for next two years globally.
If Honda Atlas wanted and took things seriously back in 2018/2019, they could have produced a CR-V locally and given another option to buyers and I am sure if they did their homework correctly and precisely [ not always the case with Honda Atlas ], CR-V could have given a very tough competition to Sportage and for that matter Tucson or another entrant . A 3 row version would have made things interesting as well.
As an additional info, globally CRV and Honda Civic prices are close to each other depending upon market and varaint and that is the reason people are jumping onto crossovers because of their utility over sedans. And that is the main reason of lower sedan sales. I think a good market research and development work by Atlas could have resulted in PKDM CR-V.
The only major problem I see with all this is “ THE INTENTIONS” .. which is lacking with Atlas. They still think the market is same and consumer have no options but that’s not the reality. If they want to survive as a company and brand, they need to work and think seriously about their offerings and explore the wider segment now wide open for playing.
I didn’t bring Toyota RAV-4 into this equation because that’s a complete separate subject and require ground work for TNGA which is also basis of the 12th generation Corolla. For them Corolla Cross as CBU might not work as well. We can discuss that next.
Would you take CR-V , if an option is given to you?
[ f-w @pakwheels.com ]
( European CR-V shown for reference only)
PW Blog CR-V > https://www.pakwheels.com/blog/2017-honda-cr-v-unveiled/
