Hybrid technology seems to be the new ‘in’ thing.
In Pakistan, however, it is still in its infancy. But, for several people, this is the way to go forward. Car manufacturers are fully aware of the consumers’ needs and are planning on how and when to introduce such vehicles in the country. This is one way they will ensure being a step ahead of competition.
One such example is Honda which introduced its first 1,500cc hybrid car in Pakistan. The product introduced, however is designed as a ‘sports’ car.
While it may be tagged that, the company will closely monitor the sales after which a decision will be made on further diversification in family cars, said Takeharu Aoki, president and chief executive officer of HACPL, in an exclusive interview with The Express Tribune.
“More practical hybrid cars would depend on demand,” said Aoki. “We may have to check the demand of the recently-launched CR-Z sports hybrid. If the response is good, we may consider a family hybrid car.”
Aoki said the HACPL is planning innovations for the future with the support of Honda Japan. One proof is the launch of the sports hybrid vehicle. “We really want to contribute to Pakistan’s economy and we will introduce new features in the four-wheeler industry.
“Our policy is to introduce the latest technology coupled with safety, luxury and our track record proves this.”
However, like other car manufacturers, the HACPL is also facing an issue of negative profits, rupee devaluation, energy crisis and increased inflation.
Despite the issues, the HACPL has turned things around after a while, reporting Rs244 million as profit-after-tax for the year ending March 2012-13, up from a loss of Rs532 million the previous fiscal year. The company, for the first six months of the current fiscal year, has posted a profit- after-tax of Rs314 million.
Aoki credited the profitability to its brand, Honda Civic, which the company launched in September 2012. The car outperformed and took the lead in overall revenue generation for the company as it produced 13,627 units, the latest figure available.
According to Aoki, the sales volume of Honda Civic in the country is second after Thailand in the Asian region. The current market share for Honda cars in Pakistani market is 20%.
Meanwhile, the company claims that the increase in per-unit price has not helped them improve profitability, blaming rupee devaluation, energy crisis, and inflation as offsetting any profits there were to make.
“One of the main hurdles for us is how to tackle fluctuation in exchange rates and to offer the product at the best rate. This is a challenging task but we have to manage this in order to be competitive.”
The company also claims that the percentage increase in the price-per-unit is ‘nothing’ compared to the overall inflation and fluctuation in exchange rates.
“The recovery the rupee has shown is also nothing. We are absorbing these issues within the company by taking different measures and passing on a very low percentage to our customers. We normally increase prices when the exchange rate fluctuates around 3%.”
To tackle the issues, the company is now focusing on localisation. Currently 40% of parts used by the company are locally manufactured with the remaining 60% being imported.
The chief also said that the company at this stage is not looking to export vehicles. “We are focusing on the Pakistan market. Once we are successful, we will cater to others. Right now we’re only exporting parts to Malaysia.”
Published in The Express Tribune, January 6th, 2014.
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