Honda Atlas raises motorcycle prices for the seventh time this year

LAHORE: Atlas Honda has announced its seventh price increase for 2022. The new prices are as follows:

Atlas Honda’s decision to raise prices comes the week after the company published its financial statements on the Pakistan Stock Exchange (PSX) for Q3CY22. The results have been abysmal for Honda on both a quarterly (QoQ) and yearly (YoY) basis. The final sum of 777 million rupees was a decline of 48% quarter on quarter (QT) compared to Q2CY22. This translated to a half-year profit of Rs 2.27 billion, down 8% year-on-year from its Rs 2.487 billion from the same period last year.

Price increases during 2022 have led to lower sales in the second half of the year both in quarterly and annual terms. Atlas Honda launched its price increases in March, however, from March to July the price increases did not appear to have directly affected sales per se. Indeed, CY2022 actually outperformed year-on-year against CY2021 numbers. However, this short-term peak followed by the subsequent decline from July may indicate a short-term buying frenzy in which all customers who wanted to buy a motorcycle did so because they feared future revisions. on the rise.

In addition, from June, Pakistan recorded an average inflation rate above 20%. This is particularly devastating for Atlas Honda, as the lion’s share of its motorcycle sales depend on the CD-70 and CG-125 variants which are marketed to the price-sensitive segments of motorcycle customers. This contrasts with their Japanese counterparts, Suzuki and Yamaha, which target customer segments that are more likely to absorb price increases.

On average, Atlas Honda prices have risen 26% since January of this year to date. The evolution of prices since the beginning of the year until now is as follows:

Going forward, further depreciation of the PKR could lead to Atlas Honda introducing one final price increase to end the year. However, whether Atlas Honda does or not, inflationary pressure alone is likely to compound the negative multiplier that these price increases will have on Atlas Honda sales for months to come. The silver lining of Atlas Honda’s woes is that their more affordable Chinese counterparts have also embarked on upward price revisions throughout 2022. If potential Atlas Honda customers will switch to more affordable options or if customers in more affordable segments will choose to pay the premium for the Atlas Honda brand will become clearer in the coming months.

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