INTRODUCTION:Honda Motor Company, Ltd.

Honda on International
Type Public Founded 24 September 1948 Founder(s) Fujisawa Headquarters Minato, Tokyo, Japan Area served Worldwide Key people Satoshi Aoki (Chairman) Takanobu Ito (CEO) Industry Automobile, Truck manufacturer Motorcycle Products automobiles, trucks, motorcycles, scooters, ATVs, electrical generators, robotics, marine equipment, jets, jet engines, and lawn and garden equipment. Honda and Acura brands. Website Honda.com
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Level

Honda,

Takeo

Atlas Honda - Company Profile Snapshot in Pakistan: Atlas Honda Ticker: ATLH Exchanges: KAR. 2009 Sales: n/a. Major Industry: Automotive. Sub Industry: Diversified Automotive Mfrs. Country: PAKISTAN.

OVERVIEW:
Auto market is one of the largest segments in world trade. Changing models, improving fuel efficiency, cutting costs and enhancing user comfort without compromising quality are the most important challenges of the auto industry in a fast globalizing world.

The first phase of automotive assembling in Pakistan started in 1950 with Bed Ford truck followed by Ford Prefect. And there were lots of other products by different companies have been launched till 2000. This was known as era of competitiveness. Upto 1995. The industry specific deletion programs were formulated to specify local content requirements for cars, motorcycles, Buses and Trucks Tractors etc. The deletion policy finalized in 1996 has the following features: Industry Specific Deletion program. No roll back from achieved Deletion Levels. Even handled Tariff Protection at all levels of processing.
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The deletion levels were finalized by the sub-committees for cars, LCVs, Motorcycles and tractors etc., constituted by indigenization committee of EDB on the basis of technology levels prevalent in the engineering industry of Pakistan. The Industry specific deletion program (ISDP) books were published and distributed amongst the stakeholders, which resulted in a significant improvement in indigenization.

Background of Whole products launched by Honda Company:

Honda Motor Company, Ltd. (Honda Technology Research Institute Company, Limited) listen (help info) (TYO: 7267) is a Japanese multinational corporation primarily known as a manufacturer

of automobiles and motorcycles. Honda is the world's largest manufacturer of motorcycles as well as the world's largest manufacturer of internal combustion engines measured by volume. Honda surpassed Nissan in 2001 to become the secondlargest Japanese automobile manufacturer. Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura in 1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden equipment, marine engines, personal watercraft and power generators, amongst others. Since 1986, Honda has been involved with artificial intelligence/robotics research and released their ASIMO robot in 2000. They have also ventured into aerospace with the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 Honda Jet, scheduled to be released in 2011. From a young age. Soichiro Honda had a great interest in automobiles. He worked as a mechanic at a Japanese tuning shop, Art Shokai, where he tuned cars and entered them in races. A self-taught engineer, he later worked on a piston design which he hoped to sell to Toyota. The first drafts of his design were rejected, and Soichiro worked painstakingly to perfect the design, even going back to school and pawning his wife's jewelry for collateral. Eventually, he won a contract with Toyota and built a factory to
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construct pistons for them, which was destroyed in an earthquake. Due to a gas shortage during World War II, Honda was unable to use his car, and his novel idea of attaching a small engine to his bicycle attracted much curiosity. He then established the Honda Technical Research Institute in Hamamatsu, Japan, to develop and produce small 2-cycle motorbike engines. Calling upon 18,000 bicycle shop owners across Japan to take part in revitalizing a nation torn apart by war, Soichiro received enough capital to engineer his first motorcycle, the Honda Cub. This marked the beginning of Honda Motor Company, who would grow a short time later to be the world's largest manufacturer of motorcycles by 1964. The first production automobile from Honda was the T360 mini pick-up truck. Powered by a small 356 cc straight-4 gasoline engine, it was classified under the cheaper Kei car tax bracket. The first production car from Honda was the S500 sports car. Its chain driven rear wheels point to Honda's motorcycle origins.

Leadership:
1948-1973 Soichiro Honda 1973-1983 Kiyoshi Kawashima 1983-1990 Tadashi Kume 1990-1998 Nobuhiko Kawamoto 1998-2004 Hiroyuki Yoshino 2004-2009 Takeo Fukui 2009-present Takanobu Ito Honda`s headquartered in Minato, Tokyo, Japan. Their shares trade on the Tokyo Stock Exchange and the New York Stock Exchange, as well as exchanges in Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland. American Honda Motor Co. is based in Torrance, California. Honda Canada Inc. is headquartered in the Scarborough
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district of Toronto, Ontario, and is building new corporate headquarters in Markham, Ontario, scheduled to relocate in 2008, their manufacturing division, Honda of Canada Manufacturing, is based in Alliston, Ontario. Honda has also created joint ventures around the world, such as Honda Siel Cars and Hero Honda Motorcycles in India , Guangzhou Honda and Dongfeng Honda in China, and Honda Atlas that is also called Atlas Honda in Pakistan. With high fuel prices and a weak US economy in June 2008, Honda reported a 1% sales increase while its rivals, including the Detroit Big Three and Toyota, have reported double-digit losses. Honda's sales were up almost 20 percent from the same month last year. The Civic and the Accord were in the top five lists of sales. Analysts have attributed this to two main factors. First, Honda's product lineup consists of mostly small to midsize, highly fuel-efficient vehicles. Secondly, over the last ten years, Honda has designed its factories to be flexible, in that they can be easily retooled to produce any Honda model that may be in-demand at the moment. Honda is the 6th largest automobile manufacturer in the world as well as the largest engine-maker in the world, producing more than 14 million internal combustion engines each year. As of August 2008, Honda surpassed Chrysler as the 4th largest automobile manufacturer in the United States. Currently, Honda is the second largest manufacturer in Japan behind Toyota and ahead of Nissan. Honda, Nissan, and Toyota, three of the strongest vehicle companies in the world, were still not immune to the global financial crisis of 2008, as these companies reduced their profitability forecasts. The economic crisis has been spreading to other important players in the vehicle related industries as well. Honda spends about 5% of its revenues into R&D.

Chinese joint venture:

At the 2008 Beijing Auto Show, Honda presented the Li Nian ("concept" or "idea") 5door hatchback and announced that they were looking to developed an entry-level brand exclusively for the Chinese market similar to Toyota's Scion brand in the USA The brand would be developed by a 50-50 joint-venture established in 2007 with Guangzhou Automobile Industry Group.

Products:
Automobiles Engines Robots Aero planes Motorsports

Vision:
Market leader in the motorcycle industry, emerging as a globally competitive centre of production and exports.

Mission:
A dynamic, profitable and growth oriented company through market leadership, maximizing export and excellence in quality and service; to ensure attractive returns to equity holders; reward employees according to their ability and performance; to foster a network of researchers and engineers ensuing unique contributions to the development of the industry; customer satisfaction and protection of the environment by producing emission friendly green products and to remain a good corporate citizen fulfilling Its social responsibilities in all respects.

Quality:
A dynamic, profitable and growth oriented company through market leadership, maximizing export and excellence in quality and service; to ensure attractive returns to equity holders; reward employees according to their ability and performance; to foster a network of researchers and engineers ensuing unique contributions to the development of the industry; customer satisfaction and protection of the environment by producing emission friendly green products and to remain a good corporate citizen fulfilling its Social responsibilities in all respects.

SWOT ANALYSIS in Pakistan:

Strengths:
Increasing Demand for Cars and Bikes:
In Pakistan context there are 9 cars in 1,000 persons which is one of the lowest in the emerging economies which itself speaks of high potential of growth in the auto sector and more so in the car production. Rising per capita income with changing demographic distribution and an anticipated influx of 30 to 40 million young people in the economically active workforce in the next few years provides a stimulus to the industry to expand and grow.

Resale of Local Assembled Cars and bikes:

Resale of locally assembled cars is better due to availability of spare parts and after sales services and warranty. Used imported cars have been selling below their cost at the showrooms for the last six months but consumers are not inclined to buy because of their low re-sale value and problems in parts availability.

Quality of local cars and Bikes:

Initially when the import of cars was liberalized the quality of local assembled cars was unsatisfactory so the people of high income level group started buying imported cars and the sales of the local assembled cars started decreasing so the local assemblers started enhancing the quality of their vehicles so we can say that the quality of local cars is becoming the strength of the auto industry.

Mechanics:
For local assembled cars and bikes mechanics are readily available in market and much cheaper so the buyer has not to worry about any problem that can occur in the car in long term whereas the availability for imported cars is a bigger issue for the owners and if somehow they are able to find one then the mechanics charges much higher than actually it should be charged.

Weakness:
WTODeletion program:
THE World Trade Organization (WTO) has rejected Pakistans request for the extension

of the deletion program which enabled it to lay down the condition of the local content requirement (LCR). Under LCR, the automobile and other engineering industry was required to use locally manufactured parts and accessories in terms of governments deletion policy. The condition of the LCR was an aberration to the Clause 5.2 of the WTO Agreement on Trade Related Investment Measures (TRIMs), Article III-National Treatment under the GATT, 1994. WTOs decision for not extending its deletion program / LCR condition has varied impact on Pakistans vendor industry, automobile assemblers, car users and the government.

Input Cost:
In Pakistan as the inflation is increasing so as the input costs and for manufacturers it is becoming harder to produce at lower cost. Increasing cost of energy and its unreliable and inconsistent supply adds up the cost of manufacturing and wastage of resources. It
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is estimated that by the year 2012, auto industry consumption of electricity will cross 500 600 MW from around 250 - 300 MW, as of now.

Protection level:
Before the TBS was introduced the auto industry was well protected by the government but now as the import of CKD and CBU is liberalized the protection level to industry by government is decreased.

Lack of skilled manpower for modern machinery:

In Pakistan conventional machines are not able to meet the precision manufacturing and the available labor is not familiar with modern technology it caused by lack of coordination and linkages with Government/Semi Government Supporting Bodies and Technical Training Institutes.

Scarcity of raw material especially steel:

Through previous years the world prices are rising and causing costly inputs and Pakistan has left with scarce Steel and Iron left, so manufacturers are facing difficulties in producing cars with low prices.

Opportunities:
Import German technology and skills:
EDB wanted to build a Pakistan-German automotive supply network, providing opportunities to Pakistani automotive vendor enterprises to benefit from the German know-how and technology to improve quality, productivity, developing and marketing of value-added products.

Foreign Investment and setup production facilities

China National Heavy Duty Truck Corporation (CNHDTC), one of the largest heavy duty truck manufacturers in China, has shown interest for investment in the automobile sector of Pakistan. The study is required to attract players from Germany as well as from other countries to develop business with the Pakistani counterparts.

Biogas Fuel
As the fuel prices are rising in world Pakistan should switch to Ethanol Fuel as Brazil is using. Ethanol Fuel is produced by Molasses. Pakistan is one of the country which produces good quantity of molasses but the engines of the local cars do not support ethanol so Pakistan should acquire the Technology to produce ethanol compatible cars and even bikes. In Brazil they use 90% Ethanol and 10% petroleum whereas Pakistani cars with default engines can afford only 3% Ethanol. And bikes default engine can only afford 2% Ethanol.

Global spare part market

The annual gross sales turnover of the auto industry, at present, stands at Rs210 billion while export of auto parts are estimated at $35 million. As such, the increase in production turnover is projected to increase by 185 per cent while the exports of auto parts would make quantum jump.

Threats:
WTOParts indigenization Smuggling of auto parts
The auto industry is generally faced by multiplicity of taxes; the presumptive tax regime has led to increase in prices of imported inputs and the finished goods. Component manufacturers are struggling to compete with under-invoicing, miss declaration and smuggling. Import of used parts is still continuing at a large scale. Smuggling, underinvoicing and dumping of auto parts

Competition from import cars and Bikes:

Auto industry is facing a threat from the import of cars and bikes which is already liberalized further it is said that government will cut about 15% of duties till 2011.

Fuel prices:
According to the authorities the fuel prices which currently are Rs 68.8 and are going to increase by more Rs. 6 by the end of 3-Jun-08.
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Decreasing tariff structure:

For two-wheelers, the tariff on CKD kits would be reduced from existing 30 per cent to 20 per cent in phased manner to 2010-1. Similarly, the tariff on CBU two wheelers would reduce to 60 per cent by 2010-11 from existing rate of 90 per cent.

Market overview: Market Share:

MOTORCYCLES Honda Yamaha Suzuki Hero Qingqi Sohrab Total Units Sold (nos.) 332,068 56,243 27,424 25,909 15,035 10,674 467,353 Market Share (%) 71 12 6 6 3 2 100

Motorcycles
Honda Yamaha Suzuki Hero QingQi Sohrab

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PEST Analysis:
Organizations operate in micro and macro environment which are changing time to time. Formulation of right strategies always needs scanning of internal and external environment to determine the level of impact of each factor on organization business. PEST is the best technique for scanning of macro level environment which include political, economic, social and technological factors.

Political Factors:
Political factors are the rules, regulation, constraints and condition made by government. Organization doing business in country must be agreed upon the term and condition enforced by Government. Some examples of political factors includes - Taxes on product and services - Employment laws - Tariffs - Trade - Political Stability - Government policy on economy

Economic Factors:
Economics factors are important to know the purchasing power of people, stability of economy. Fluctuation in economy impact prices of product and services organization offers to their customers. These issues are important in third world country because during recession and depression demand goes down.
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Some examples of economic factors are - Higher the interest rate lowers the investment. - Economic growth in terms of GDP - Inflation rate - Exchange rates These factors impact cost of capital, revenues and profits of the organization.

Social Factors:
Organizations must evaluate social factors of the country before starting business. Social factors include relationship, ethnic groups, religion, age distribution and others. For example - If marketers does not knows the social values of woman in society and start advertising campaign of woman undergarments. - Offering products for young people at a place where the majority of people are above 40 years.

Technology factors;
Technology is now become the part of majority of organization. Technology is driving the business and improves quality and reduces time to market of product and services. In industry where the technology change with fast pace make it difficult for the organization to adopt due to cost and human resource issues. Some technology factors are - Research & Development activity - Automation - Technology incentive
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- Rate of technology change - Technological shifts

About the Product launch by us:

Product that is launch by us is Honda CA: 50 that is 50 CC bike and it is called (Cash Acquired 50).I chose this name after the name of Honda`s normal bikes in Pakistan. That is CD (Cash Deposit) and CG (Cash Gain) which are 70 CC and 125 CC bikes respectively.

Our Corporate objective for this Product:Our Corporate objectives is based on the Honda`s mission that are: 1) Provide fuel efficient transports. 2) Available at affordable price. 3) Provide easy and affordable transport to school going Students (14-17) that belongs to lower middle class and middle class`s families. 4) To decrease overall economic burden on any home.* 5) To save the time of students. **

* To save money on the local or hired transport the transportation cost is higher. ** On local or hired transport more time is consumed.]

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SMART Goals: Our product is specifically for schools going students which are in grade (Class) 7-10. We want considerable part of our product in market. We want that we gain almost more than 70% market share in Specific area i.e. Rawalpindi Initially. We want to attain this all in less than a year. We are sending initially 100 bikes to market in 2 months of time.

Marketing objectives and Strategies:Our marketing objectives and strategies:

1. Gain Maximum attention of People. Specially students of school. 2. Get maximum market share of 50.CC bikes. 3. Get maximum revenue on this bike. 4. Decrease marketing expenses. 5. Cover the maximum area of different markets in one city initially. 6. Provide good services to customers. 7. Satisfied customers needs. 8. Provide product on very favorable cost. 9. Provide after sales services. 10. Reduces the market risks which affect our product directly or indirectly. 11. Provide spare parts in market easily. 12. Decrease marketing cost. 13. Make our product and services trustful. 14. Make our product known to everyone. 15. Make loyal customers in market.

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Idea:
I got idea for this product by my personal experience. I.e. Rising price of fuel in present time and by demanding of bikes by boys of ages between 14-17 years old. Which are belongs to lower middle and middle classes families.

Settings marketing objectives:

1. Gain customers attentions by market plan like ads. Banners and Visual ads. 2. Get high market share than competitors is possible through promotion plan of our
retailers and Wholesalers by giving some extra amount to increase market of this product.

3. Build customer relationship by hearing their problems and needs. 4. Increase market of our product by Putting ads on internet and make special site on our
product.

5. Got maximum revenue on this product.

Characteristics of our product:

Characteristics of our bike are: 1. Its height is less than that of 70-CC or 100-CC bikes reason is that students of small height can easily manage it. 2. It covers more than a 100km. in just 1 litre of petrol. 3. It cannot reach more than a 65 km. /hr. in speed. 4. It is designed for 2 students. 5. It has a beautiful outlook which automatically attracts students. 6. Its price is settled which also attracts and it can also call economy product.

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Market targeting:
We target the school going students and middle and lower middle class families for selling our product because our product have a characteristic that lower middle class can also afford it.

Positioning:
We initially launch our product Rawalpindi only but we have a plan to launch it in other cities and towns near to Rawalpindi. Where the mechanics are easily available and school going students are more in number than the rest of city. Also where the families are financially better than rest of city.

Market Mix Strategies:

Product Price Place Promotion

Product:
Product is CA-50 (50 CC) bike.

Price:
Initially its price is setted Rs. 30,000. It will may increase or decrease after observing the market condition on this product

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Place:
We are launching our product initially at Rawalpindi and its near located towns and small cities.

Promotion:
For promotion of our product we use different techniques that are: 1. Initially we set low price as we already discussed (fixed) for our product. 2. We mostly give attention to sales promotion*. This will affect our product in long-terms in a positive way. 3. We also give Advertisement on television as well as publically like banners etc.

*sales promotion is discussed later in detail;

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Implementation of Promotional plan:

For implementation of our promotional plan we make a committee which will do the whole process and implement the plan. And it will prepare a report and show it to higher authorities after every 2 weeks. For Advertisements we use different channels which are watching by more people and at that time when most of the people are in front of the television and this work is done by advertisement department. For posters and banners we use different locations like markets and road especially inside the city.

Marketing Process:

Sales Promotion:
For sales promotion we use different strategies like we exert pressure from inside our company to sell more products to suppliers as well as to whole sellers and retailers. We also give suggestions to marketing department that sell product in low price and also set rewards for them that if they sell more product in specific time than we will give considerable amount for this. Also set rewards or such things like it for customers (People) i.e. if you buy this product then we will give you coupon or gift.

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