Honda Atlas Cars recently have post its last quarter report ended on 30 June 2019 in which they report a decline in profit by 77%.
Honda Atlas Cars are big auto manufacture in the country but face a loss in its revenue 25% year on year but this time company faces a huge loss in its sales and profit as compared to the previous years. Honda Atlas report that they face 77% loss in the last quarter ended in 30th June 2019. according to the details, the company said that it’s not bearable for the company. The reason behind the loss in profit is because of the devaluation of the currency against the dollar and the second reason is government-imposed taxes on all vehicles.
Units Sold in 1st Quarter MY20 |
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| Models | Units Sold in 1stQMY20 | Units Sold In 1stQMY19 | Difference |
| Civic and City | 6980 | 10736 | -35% |
| Honda BR-V | 1366 | 1745 | -21.72% |
| Total | 8346 | 12481 | -33.13% |
In this report, Honda Atlas mentions that in this year the profit after the tax deduction is Rs. 241.7 million in the first half of 2019 as compared to the previous year same period company record a profit Rs. 1.05 billion and the earning per share of the company also down by Rs. 7.36 to 1.69 during this period and this a very tough situation for the company.
Auto manufacture company face a loss when the government imposed high duties and taxes on the production of vehicle and sale of the vehicle. Recently government imposed a Federal Excise Duty on all vehicle 2.5% to 7.5% according to the engine displacement of car and under this order all vehicles are included even 660cc to 1000cc cars and this situation force auto manufacturers to hike their prices but when the prices of vehicle out of range for consumers the sales were down badly.
On the other side the value of rupee down badly from last few months and the strength of dollar increase day by day and the raw material were import from other countries and the prices of raw material are very high and the government also imposed 5% Advance Custom Duty. The cost of production increase that’s why the auto manufacturer increases the prices of products and its effect on the sales and profit of the company.
Moreover, the company also bear a loss from the income of bank deposits because company reduce its cash balance in its accounts due to the advance drop by customers and in this tenure company observed a 67% drop to Rs. 174.9 million. The operating expenses of the company jump to Rs 739.8 million. The finance cost of the company also high Rs. 4.4 million to Rs. 54.4 million during this tenure.
This is a very tough time for the auto market because of the high taxes and devaluation of currency drop down the sales of vehicles in the country and its also affect the economy. The high prices affect the buying power of the consumer.
