The auto market is one of the largest segments in world trade. The annual size of automotive export trade in the world has grown to a massive level of over US$ 600 billion, which accounts for about 10 per cent of the world export. Changing models, improving fuel efficiency, cutting costs and enhancing user comfort without compromising quality are the most important challenges of the auto industry in a fast globalizing world. Hence there is a need for exploring the industrial complementarities in the region for better quality, favourable costs, fuel efficiency and attractive designs. Therefore, the requirement of information exchange in the region is much more pronounced now than ever before for keeping the auto industry afloat and competitive.
Pakistan Overview
Since its independence in 1947, Pakistan has been able to transform itself to a large extent, from a completely agrarian economy to a fairly developed techno-industrial base. Besides textiles, Pakistan�s exports are largely manufactured items such as consumer durables and engineering products. However, it is also a fact that Pakistan has not been able to realize its potential due to internal and external compulsions and thus it lags behind many developing countries of the world. The following economic indicators constitute the tell-tale of Pakistan�s development performance:Automobile Industry of Pakistan
The existing population of automotive vehicles in Pakistan is 3.9 million. The annual demand is estimated at 300,000, two thirds of which is being met from local sources and imports and the remaining one third is left unmet. The market value of automotive vehicles in dollar terms is estimated at more than 1 billion, out of which import constitutes around US$ 200 million. The after market of auto parts is estimated at US$ 500 million, imports and local production taken together. Production figures of automobiles are given in the following tables:
Pakistan�s strength of production elements lies in its vast reservoir of land, labour and even capital. But technology and purchasing power of the consumers are its major weaknesses. Technology requirements are being met by joint ventures and technology tie-ups with foreign players in automotive sector. Japanese, Korean and European entrepreneurs have invested almost US$ 1.5 billion in Pakistan�s automotive sector. The local investment in the automotive sector is approximately US$ 1 billion.
The Group
Atlas Honda Limited is a joint venture between the Atlas Group and Honda Motor Co., Japan. The foundation of the Atlas Group was laid 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 real estate. The growth of the Atlas Group is the result of its focus on good corporate governance. Today Atlas is a diversified group dealing in engineering, financial services and trading. It consists of seven public limited companies out of which six are quoted on the Stock Exchanges in Pakistan, and five private limited companies. Atlas shareholders equity now stands over 25 billion rupees; assets have increased to over 60 billion rupees; personnel strength is over 7000 and annual sales have crossed 60 billion rupees. The Group paid taxes of Rs. 15 billion over 2% of the total government revenues.
All this progress is due to the Groups 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 Groups motto:
Organization Development
Through Self Development
The Company
The company was created by the merge of Panjdarya Limited and Atlas Autos Ltd. in 1988. Both these motorcycle manufacturing concerns were established by the Atlas Group. 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, Atsumitech, Nippon Denso and Toyo Denso. Honda motorcycles are by far the largest selling motorcycles in the country with an unmatched reputation for high quality, reliability and after-sales-service.
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 at its Karachi and Sheikhupura plants. To support the production facilities, the company has established an R&D wing and tool making facilities through CDA & CAM, which are growing rapidly in size and function as the company expands. Atlas has managed to execute 14 Joint Venture/Technical Assistance Agreements between local vendors and foreign manufacturers for transfer of technology.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.
Vision
Market leader in the motorcycle industry, emerging as a globally competitive centre of production and exports.
Mission
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.
Our slogan
For Honda to remain Honda, and for everyone to realize their aspirations, we must believe in"The Power of Dreams"
Company History
Since its inception the company has experienced an unprecedented growth in its operations from a small manufacturing company to the leading motorbike manufacturer of Pakistan. Following is the chronological order of the major events in the companys history.
| 2004 | Contribution to national exchequer reached Rs. 3.18 billion - 72% of wealth generated, out of Group 7.56 billion (1.48% of the Government total revenues). LPDC project completed (New Generation Of Technology). Stared implementation of GDC & Case Damper Production Projects through Showa Corporation, Japan. Launch 500 K Capacity Expansion Project. |
| 2003 | Major re-adjustment of prices to pass on the benefits to customers. Best Corporate Report award by joint committee of ICAP & ICMAP. Achievement of landmark sales of 100,000 motorcycles. Technical agreement with Keihin (Japan) for Mgf. Of Fuel Cock Assembly. Switch Assembly Light & Winker + Ignition Coil. |
| 2002 | Deletion level reached to 87% and 80% for CD70 & CG125 respectively. Introduction of Gratuity Scheme for staff. Best Corporate Report award by joint committee of ICAP & ICMAP. |
| 2001 | Concept of 5S dealership - Sales, Service, Spare Parts, Second hand exchange and Special (Credit) sales launched. New Block for hi-tech engine plant. |
| 2000 | Investment in Crankshaft Project. TC Agreement with Toyo Denso. |
| 1999 | ISO 9002 certification for both factories. |
| 1998 | New models (MMC) of CD70 & CG125 launched. |
| 1997 | Investment in Gear Project. |
| 1995 | Exports to Bangladesh. Export Agreement signed with Honda Motor Company Limited. |
| 1994 | Mr. Kawamoto President, Honda Motor Company Limited, visited AHL. |
| 1992 | Change of name to Atlas Honda Limited (AHL). |
| 1991 | Inauguration of CG125 Engine Project at Sheikhupura Factory. |
| 1990 | Merger of Panjdarya Limited into Atlas Autos Limited. |
| 1989 | Export of built up motorcycles to Nepal. |
| 1988 | Production capacity expansion III. Joint Venture agreement signed with Honda Motor Company Limited. |
| 1987 | Inauguration of CD70 Engine Project at Karachi Factory. |
| 1986 | Technical Assistance Agreement with Showa Corporation. |
| 1982 | Deletion Project financed by PICIC. |
| 1981 | Commercial Production started at Panjdarya Limited. Production capacity expansion II. |
| 1979 | Incorporation of Panjdarya Limited as Joint Venture with Honda Motor Company limited. |
| 1976 | Production capacity expansion I. |
| 1965 | Public offering of Shares. |
| 1964 | Commercial Production started. |
| 1962 | Technical Assistance Agreement signed with Honda Motor Company Limited. Incorporation of Atlas Autos Limited. |
management
Maintaining a global viewpoint we are dedicate to supplying product of the `highest quality yet a reasonable point for worldwide customer satisfaction. Honda remains its rich culture of customer satisfaction, it being serving nation. For management we have following our management strategy.
� Proceed always with ambition and youthfulness.
� Respect sound theory, develop fresh ideas, and make the most effective use of time.
� Enjoy your work and encourage open communications.
� Strive constantly for a harmonious flow of work.
� Be ever mindful of the value of research and endeavor.
� Respect for all � man has priority over others.
MANGEMENT LIFE CYCLE
PLANNING
| Transportations |  | Purpose |
| Two Wheeler RoadTransportation |  | Strategy |
| Better quality at economical rates |  | Objective |
| Produce different models for different customers CD 70,CD 100, CG 125 |  | Programs |
| CD 100 Economical with speed specially for middle-aged, CG 125 Speed specially for Youngsters, CD 70 economical specially for oldies | ![clip_image013[1]](http://lh6.ggpht.com/-AIq7QPCpuWM/Tf6_W3t8axI/AAAAAAAAAtA/xE16Urz8Pjc/clip_image013%25255B1%25255D%25255B2%25255D.gif?imgmax=800 "clip_image013[1]"){kind=small} | Policies |
| Always on time delivery and return of defected products entertained |  | RULES |
SWOT
STRENGHTS WEAKNESSES OPPORTUNITIES THREAD
Strengths:
� Qualified and well trained staff
� Biggest sale network
� Best production plant in the world
� Financial Strong
� Biggest market share
� People Trusted Products
� High Quality Products
� ISO Certified
� Resale value
� Customer Care
� Customized products
� Brand Image
� Availability of Spare parts
� Best delivery system (Transportations)
Weaknesses
� High Price of Products
� Political instability
� Low per capita income of public
� Less overhead rates of competitors
� Increasing Prices of Oil
� Rising inflation
Opportunities
� Industry expansion
� Technology upgrading
� Strong Position
- Market Integration opening up
- Opportunity growing in other countries
- Newly developed Areas/Markets (e.g. Gawader)
- Favorable govt. policies
- Big Market
- Economy is expanding
� Chinese cheaper products challenges
� Free Trade & WTO
� Strong competition from competitors in near future
� Instability of Government
� High rate of Taxation
� Bad infrastructure
ORGANIZATION HIERARCHEY
The above chart shows the centralization in the industry. The main decision comes from the Chairman of the company while Board of Directors approves his decisions and this implement in organization by respective committees. The Board of directors is committed to good corporate governance. The company is managed and supervised responsibly and proper internal controls and risk management policy. Its procedures are in place for efficient and effective operations of the company, safeguarding of assets of the company. This is compliance with laws and regulations and proper financial reporting in accordance with International Financial Reporting standards.
As a part of group corporate strategy it has five committees at group level to guide the management in various key areas of the company�s operations ranging from Human Resource, Information Technology, Audit , Environment Safety and health.
Following is summary of role and responsibilities of each committee;
MANAGEMENT PROFILE
BOARD OF DIRECTORS
Chairman Yusuf H. Shirazi
Chief Executive Officer Saquib H. Shirazi
Directors Koji Nakazono
Nurul Hoda
Sanaullah Qureshi
Sherali Mundrawala
Toshitsugu Kaneko
Yoshitaka Kitamura
Company Secretary Zaryab Tarique
GROUP EXECUTIVE COMMITTEE
This is responsible for setting overall corporate objectives and strategies, identifying opportunities, monitoring group business strategies & plans and developing its group members as leaders of their respective fields.
GROUP EXECUTIVE COMMITTEE
Chairman Aamir H. Shirazi
Members Frahim Ali Khan
Iftikhar H. Shirazi
Jawaid Iqbal Ahmed
Saquib H. Shirazi
Secretary Theresa Dias
GROUP HUMAN RESOURCE COMMITTEE
It determines the compensation package for the management staff. The committee has also responsibility to create and maintain conducive work environment that instills trust and ensures respect fair treatment, development opportunities & grooming and make succession plan for all employees.
GROUP HUMAN RESOURCE COMMITTEE
Chairman Yusuf H. Shirazi
Members Aamir H. Shirazi
Bashir Makki
GROUP SYSTEMS AND TECHNOLOGY COMMITTEE
The Group system and Technology committee is responsible to provide an insight towards the various technological aspects of information systems. The objective of the committee is to introduce leading edge technology and IT initiative to automate information delivery and accessibility of data for enhancement of time and cost efficiency.
GROUP SYSTEMS & TECHNOLOGY COMMITTEE
Chairman Iftikhar H. Shirazi
Members Mushtaq Alam
Zia Ullah Begg
Secretary Sarfraz Hassan
AUDIT COMMITTEE
This is most prime committee of board, which reviews financial, and internal reporting process, the system of internal controls, management of risk and the internal and external audit processes. It also proposes the appointment of external auditors to the shareholders and is directly responsible for their approval and oversights of their work. An independent Internal Audit function reports to the committee regarding risks and internal controls across organization. The audit committee reviews reports from external auditors on any accounting matters than might be regarded as critical. The committee consists of three members including chairman of committee are non-executive directors. The audit committee meets three times a year and review quarterly, half year and annual financial statements besides internal audit plan, material audit findings and recommendations of internal auditor.
AUDIT COMMITTEE
Chairman Sanaullah Qureshi
Members Sherali Mundrawala
Nurul Hoda
Head of Internal Audit Aamir Shakoor Khan
Secretary Ashfaq Ahmad
MANAGEMENT COMMITTEE
It acts at the operating level in an advisory capacity to CEO. It provides recommendations relating to the business and other corporate affairs. The committee has responsibility for reviewing and forwarding long-terms plans, capital and expense budget development and stewardship of business plans. It is also responsible for maintaining healthy environment within and outside the company through its environment friendly products.
MANAGEMENT COMMITTEE
Chief Executive Officer Saquib H. Shirazi
Vice President Marketing Nurul Hoda
Vice President Technical Toshitsugu Kaneko
Chief Financial Officer Suhail Ahmed
General Manager Plants Amir Awan
General Manager CAMA Maqsood A. Basraa
General Manager Development Yoshitaka Kitamura
General Manager Quality Assurance Lt. Col. (R) Sultan Ahmed
General Manager Human Resource Raffat Iqbal
General Manager IT Mushtaq Alam
General Manager Logistic Talha Saad
PRODUCTION STRENGTH
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 at its Karachi and Sheikhupura plants. To support the production facilities, the company has established an R&D wing and tool making facilities through CDA & CAM, which are growing rapidly in size and function as the company expands. Atlas has managed to execute 14 Joint Venture/Technical Assistance Agreements between local vendors and foreign manufacturers for transfer of technology. Besides, Atlas has directly executed 5 Joint Venture/Technical Assistance Agreements other than Honda.In 1994, the plant was constructed with installed capacity of 5,000 units on single shift basis. This moderate capacity continued to cater to the business requirements for some years. For the last couple of years, due to rising demand, the immediate expansion was inevitable. Thus the paint shop, being bottleneck of the process, was expanded with installation of another paint booth at a capital cost of Rs 185.0 million in order to enhance the production capacity. Due to this expansion, coupled with the double shift operation and extended process efficiency, now the plant has annual capacity of 30,000 units on double shift basis against 12,000 units last year.
The expansion of the capacity was inaugurated on December 20, 2004. After running on trial basis for a couple of weeks, the plant started operation on double shift basis from September 2004 and gradually monthly production was increased to 2,403 units in December 2004. Now onward, on an average, the company plans to produce 2,500 units monthly. The paint shop expansion yielded dividend, as the quarterly production showed 33.8% and 23.0% increase in the third and fourth quarters respectively.
Production Capacity in Pakistan
The Atlas Honda has largest production capacity in Pakistan about 400,000 annually. Following is Honda�s production with ratio to other manufacturers in Pakistan.| Company | Production Capacity |
| Atlas Honda Ltd. | 400,000 |
| Dawood Yamaha Ltd. | 200,000 |
| Suzuki Motorcycles Pakistan Ltd. | 65,000 |
| Saigols Qingqi Motors Ltd. | 100,000 |
| Sohrab | 42,000 |
Source: Pakistan Automotive Manufacturers Association
This is graphical representation of Production capacity of Honda with respect to other manufacturers.
Production Strength of Honda
Following is table showing its ten years production and sale.| Year | Production | Sale |
| 1996-97 | 68,637 | ~ |
| 1997-98 | 63,463 | ~ |
| 1998-99 | 59,639 | 61,536 |
| 1999-00 | 59,357 | 58,579 |
| 2000-01 | 78,
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