Atlas Honda to invest another $50m

Exports of the country’s largest motorcycle manufacturer expected to double in 2012.

LAHORE:

After investing $35 million a year ago, Atlas Honda has increased its motorcycle production capacity by 25% to 0.75 million vehicles annually keeping in mind the growing local demand, one of the largest motorcycle markets in the world, and export potential to regional countries.

Atlas Honda Chief Executive Officer Saquib Shirazi on the occasion announced will now prepare a feasibility study for an expansion to 1 million units, which is estimated to cost around an additional $50 million.

“The enabling environment provided by the government was instrumental in the phenomenal growth of this sector even during the periods of economic recession,” said Shirazi who is an alumni of Harvard Business School.

Atlas Honda has been the market leader in the motorcycle industry since 2000. It has also seen its production grow eight-folds since then.

The manufacturer has also localised 94% parts of the motorcycle, bringing the cost down and making it more conducive for exports.

“Our exports are expected to double to around 20,000 units this year, while we are hopeful to achieve our export target of 100,000 units in next three to five years,” he added.

The primary market for locally manufactured motorcycles is Afghanistan and Bangladesh while other markets on the radar are Iran, Central Asia and Africa.

The government will support manufacturers through prudent policies and encourage them to enhance capacity and transfers of technology which will not only benefit local consumers but also increase exports of locally manufactured motorcycles, said Federal Board of Revenue (FBR) Chairman Mumtaz Haider Rizvi at the inauguration ceremony.

Rizvi, while inaugurating the production facility, said that he is looking forward to Atlas Honda’s next landmark of achieving production and sales targets of 1 million motorcycles a year, as it will be a direct support to achieve FBR’s revenue collection targets. The motorcycle manufacturer paid Rs408 million in the form of taxes in 2011. FBR regards Atlas Honda as one of the role models among the Pakistani tax paying organizations, said Rizvi.

Pakistan with a population of 180 million people can be considered amongst the biggest markets of motorcycles, said Rizvi adding that the country has an immaculate and talented workforce besides a thriving economy which calls for further investment, said Rizvi.

Honda President R&D Southeast Asia Kenji Kawaguchi, who came from Thailand to attend the inauguration ceremony, affirmed that friendly policies from the government and continuous support from the FBR will encourage Honda Japan to increase its role in Pakistani motorcycle market’s development.

“I am expecting Honda to introduce several new and improved models in the coming years to serve the Pakistani customer better,” said Kawaguchi.

Published in The Express Tribune, June 12^th, 2012.