Honda Atlas increases 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 increase their prices comes the week following the company released their financials to the Pakistan Stock Exchange (PSX) for Q3CY22. The results were appalling for Honda on both a quarter-on-quarter (QoQ) and a year-on-year (YoY) basis. The final sum of Rs 777 million was a 48%quarter-on-quarter (QoQ) decline from Q2CY22. This translated to a half yearly profit of Rs 2.27 billion which is a 8 per cent year-on-year reduction from its Rs 2.487 billion over the same period last year. 

The price increases over the course of the 2022 have led to sales falling in the second half of the year in both QoQ and YoY terms. Atlas Honda initiated its price increases in March, however, from March till July the price increases seemed to not have directly affected sales per se. This is because CY2022 actually outperformed YoY in comparison to CY2021 figures. However, this short term spike followed by the subsequent dip from July onwards is indicative of perhaps a short term buying spree whereby all those customers that did want to buy a motorcycle did so as they feared future upward revisions. 

Furthermore, from June onwards, Pakistan has recorded an average inflation rate upwards of 20%. This is particularly devastating for Atlas Honda as the lion’s share of its motorcycle sales are reliant upon the CD-70 and CG-125 variants which are marketed towards the price sensitive segments of motorcycle customers. This is in contrast to their Japanese counterparts, Suzuki and Yamaha, who target customer segments that may be able to better absorb the price increases. 

On average, Atlas Honda’s prices have increased by 26% from January of this year till now. The change in prices from the start of the year till now are as follows: 

Going forward, a further depreciation in the PKR may lead to Atlas Honda introducing a final price increase to end the year. However, irrespective of whether Atlas Honda does do that, inflationary pressure alone is likely to compound the negative multiplier that these price increases will have on Atlas Honda’s sales for the months to come. The silver lining to Atlas Honda’s woes is that their more affordable Chinese counterparts have also engaged in upward price revisions across 2022. Whether prospective Atlas Honda customers will switch to more affordable options or if customers in the more affordable segments will opt to pay the premium for the Atlas Honda brand will become clear in the months to come.