Honda Atlas briefing highlights lower revenues

Honda Atlas Car (HCAR) held a corporate briefing on its 1QMY25 performance, discussing current and future operational dynamics, according to a press statement released by Topline Research on Thursday. Despite the absence of issues with opening Letters of Credit (LCs) this year, subdued demand and a shrinking economy led to lower revenues.

The statement highlighted localisation levels for various HCAR models: Civic over 60%, City 73%, and less than 50% for BRV and HRV. A tax benefit in the March quarter stemmed from HCAR’s consistent history of paying minimum tax, resulting in an adjustment of Rs1.13 billion in the company’s tax liability and reducing the effective tax rate from 86.9% to 15.2% for FY23-24.

HCAR is exporting spare parts and exploring opportunities to export CPU parts. Approximately 10-15% of imports come from Japan, with the remainder sourced from Thailand, leading to a minor benefit from currency devaluation.

In response to increased competition, HCAR plans to launch several models, including hybrids. The capital expenditure for setting up a hybrid plant is Rs5 billion. This year, the policy rate increased by 2%, reaching 22% by March 2024, posing significant challenges for the auto sector. The overall passenger car market decreased by 45%. Topline Research anticipates some industry recovery in MY25, as the policy rate is expected to fall, significantly improving the lower car segment and hybrids.