According to the recently shared figures, Honda’s financial position shows a major downward trend as the company’s sales and revenues were decreased and operating expenses were sharply increased. Company’s profit net-off tax in the last quarter of the financial year 2018 – 2019 was reduced by over 77% as the books of accounts recorded a figure of 241.7 million rupees, as compared to massive 1050 million rupees in the same quarter of the preceding year. EPS – Earnings per shares took more or less similar impact and were dropped from 7.36 rupees to 1.69 rupees (dipping by 5.67 rupees).
Car sales of the company declined by over 33% (from 12,281 units to 8,346 units) in the same quarter. The company has increased its prices by over 23% in recent months, which are said to be mainly due to rupee depreciation against USD and increase in excise duty and customs duty on imports.
Recently, big three car manufacturers of Pakistan including Honda shared that the stocks were significantly raised due to decrease in demand. To accommodate the said issue, companies decided to decrease the number of working days in a month and observe a two day holiday per week. Just a year ago, Honda was working in double shifts to cope up with the demand, and now the company is producing just 160 units per day, as compared to 220 units per day earlier this year. Honda had also announced to shut down the production line from 12 July till 21 July.
A senior executive of the company stated that the inventory was sharply increased and feared that, if a similar trend continues, the sales are expected to drop from 48,000 units per year to 30,000 units per year. According to data shared Pakistan Automotive Manufacturers (PAMA), sales of Honda Civic and Honda City have been decreased by over 6.9%.
