Honda Atlas Cars (Pakistan) Ltd has exported 38 units of its 1.2L Honda City to Japan, marking a symbolic entry into international markets. However, the company cautioned that high input costs and lack of clear, export-supportive government policies remain major barriers to large-scale exports.
During its analyst briefing on Wednesday, the company stated that while discussions with authorities are ongoing, Pakistan is at a disadvantage compared to regional competitors like Thailand and Indonesia. These countries offer more conducive environments for automotive exports, making it difficult for Pakistan to compete effectively in the global automotive market.
Despite this, Honda reported a 42% year-on-year increase in topline revenue, reaching Rs78 billion in MY25. The company now aims to expand beyond local markets, laying the groundwork for sustained export momentum.
According to AKD Securities, Honda Atlas exported 38 units of the 1.2L City model to Japan during MY25. Though the volume is small, Honda's management said the milestone establishes a foundation for entering high-value export markets.
Arif Habib Limited (AHL), in its analyst note, cited the company's export push as a key growth lever amidst domestic competition and evolving policy frameworks. The company reported that it has achieved localisation levels of 74% for City, 64% for Civic, and 61% for the HR-V hybrid.
The company posted a MY25 profit after tax of Rs2.7 billion (EPS: Rs18.97), up 16% year-on-year, supported by tax incentives that kept the effective tax rate at 17.27%.
Industry expert Mashood Ali Khan highlighted the pressing need for consistent and clear government policies to unlock the full export potential of Pakistan's automotive sector. Currently, 20 to 25 parts manufacturers export to Europe, the United States, and the Middle East, he said, adding, "However, for a real jump in exports, Original Equipment Manufacturers (OEMs) such as Honda, Suzuki, and Toyota involvement is essential. Every major OEM in Pakistan has shown intent over the past years, but require policy support to scale up."
Chairman of the All Pakistan Motor Dealers Association (APMDA), HM Shahzad, criticised recent automotive export claims, arguing that without meaningful localisation, Pakistan lacks the foundation to become a competitive automotive exporter.
"Today's policies are not export-friendly. There's a gap between the government's stated ambition to enhance exports and the actual policy framework. The existing rebate systems, designed more for the textile sector, are not suited for automotive exporters," Khan explained.
He called for a fully automated, GD (Goods Declaration)-based rebate system offering immediate incentives, such as tax-free CKD kits in exchange for exported units.
"If one car is exported, allow duty-free import of one CKD kit automatically," he proposed. "This plus-minus system would boost exporter confidence and eliminate delays."
He also noted that Pakistan, as a right-hand drive (RHD) production base, holds strong export potential. "There are over 50 RHD markets globally. With Japanese OEMs present and Chinese automakers entering the space, the opportunity is real — but we must act now."
He warned that missing export windows due to bureaucratic delays or unclear incentives could cost Pakistan dearly, as global demand windows close quickly in the competitive auto landscape.
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