Internship Report AHL 2015.

8/19/2019 Internship Report AHL 2015.

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Internship Report On AHL 1

DEPARTMENT OF MANAGEMENT SCIENCES

COMSTAS INSTITUTE OF INFORMATION AND TECHNOLOGY

LAHORE CAMPUS

INTERNSHIP REPORT

ON

ATLAS HONDA LIMITED, PAKISTAN

INTERNSHIP ADVISOR:

MUHAMMAD BILAL JAVED

REPORT SUBMITTED BY:

MUHAMMAD HAIDER

CIIT/DDP-BBA-FA12-031/LHR

SUBMISSION DATE: 20/08/2015

CIIT LHR: 1.5 Km Defence Road, off Riawand Road, Lahore

Tel: +92 (42) 111-001-007

Fax: +92 (42) 99203100


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PREFACE

It is mandatory for a BBA student to acquire some hands on practical job training

during his/her degree in the form of internship. I got the opportunity to join the Atlas

Honda Limited Pakistan for the said propose for a period of 06 weeks. Practicalinvolvement was a great experience as interaction both with experienced executive

and clients cemented the base of knowledge I have been acquiring in classroom.

This internship report includes the material about AHL and different departments

along with their working procedure.

For the completion of this project I meet various personals of this organization. I

visited the markets and completed a project assigned to me.

Muhammad Haider


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TABLE OF CONTENTS

CONTENTSPREFACE .......................................................................................................................... 2

EXECUTIVE SUMMARY .............................................................................................. 5

CHAPTER-1. BACK GROUND OF HOST ORGANIZATION ................................. 6

TWO WHEELER INDUSTRY IN PAKISTAN ................................................. 6

TWO WHEELER SPARE PARTS INDUSTRY IN PAKISTAN: ..................... 6

AN OVERVIEW OF ATLAS HONDA LIMITED ............................................. 7

1.3.1 The Group: ......................................................................................................... 7

1.3.2 The Company ..................................................................................................... 7

1.3.3 Plants: ................................................................................................................. 9

1.3.4 Annual Production Capacity .............................................................................. 9

1.3.5 Authorized Capital ............................................................................................. 9

1.3.6 Export ................................................................................................................. 9

1.3.7 Regional Offices .............................................................................................. 10

1.3.8 Stock Exchange Enlistments ............................................................................ 10

1.3.9 Membership of Industry & Associations ......................................................... 10

Products .............................................................................................................. 11

OBJECTIVES of AHL ....................................................................................... 11

Strategic Goals of AHL ...................................................................................... 11

1.6.1 Customers ........................................................................................................ 11

1.6.2 Quality.............................................................................................................. 11

1.6.3 Technology ...................................................................................................... 12

1.6.4 Shareholders ..................................................................................................... 12

1.6.5 Employees ........................................................................................................ 12

1.6.6 Corporate Citizens ........................................................................................... 12

VISION & MISSION OF AHL ......................................................................... 12

1.7.1 Vision: .............................................................................................................. 12

1.7.2 Mission:............................................................................................................ 13

Chapter-2. DIVISIONS /DEPARTMENTS OF AHL ................................................. 14

Divisions of AHL ............................................................................................... 14

Logistics Department ......................................................................................... 14

Production Planning Control: ............................................................................. 15


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Quality Assurance Department: ......................................................................... 16

I.T Department: .................................................................................................. 16

Corporate affairs:................................................................................................ 17

Human Resource Department: ........................................................................... 18

Stores Department: ............................................................................................. 22

Finance Department: .......................................................................................... 22

CHAPTER#3 Organizational Analysis ......................................................................... 25

SWOT ANALYSIS ............................................................................................ 25

3.1.1 Strengths: ......................................................................................................... 25

3.1.2 Weakness: ........................................................................................................ 27

3.1.3 Opportunities: .................................................................................................. 27

3.1.4 Threats: ............................................................................................................ 28

Organizational structure ..................................................................................... 29

Marketing overveiw ........................................................................................... 30

3.3.1 Brand: ............................................................................................................... 30

3.3.2 MARKETING MIX ......................................................................................... 31

3.3.3 COMPETITORS BRANDS & MODELS ....................................................... 33

Six key principles of ATLAS HONDA: ............................................................ 34

Chapter-4. INTERNSHIP PROJECT .......................................................................... 35

Introduction of Project ....................................................................................... 35

Description of Project......................................................................................... 35

Findings of Project ............................................................................................. 35

Chapter-5. Learning as an intern .................................................................................. 37

Duties ................................................................................................................. 37

Accomplishments ............................................................................................... 38

New knowledge acquired ................................................................................... 38

Problems Encountered........................................................................................ 39

Impact on Career ................................................................................................ 39

Chapter-6. recommendations and conclusion .............................................................. 40

Recomendations ................................................................................................. 40

Conclusion .......................................................................................................... 41

Jargons & Acronyms ...................................................................................................... 42

BIBLIOGRAPHY ........................................................................................................... 43

ANNEXURE-A ................................................................................................................ 44


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EXECUTIVE SUMMARY

This report is about my internship which I experienced at Atlas Honda limited. The

main purpose of internship is to learn by working in a practically scenario and toapply the theoretical knowledge acquired during studies on the practical scenarios.

I stayed there as an internee for 6 weeks and learnt a lot of things. I have put my

efforts to show how all departments are working and how they are interlinked with

each other, my report focuses on giving an inside view of the organization, its

systems and operations. It also highlights how Atlas Honda Limited leads the list

of more than fifty competitors in motorcycle manufacturing industry of Pakistan due

to distinctive quality policy. Their corporate vision and values are the driving forces

and at present Atlas Group spreads over 11 companies both private and public

limited. Atlas Group is a responsible entity which is highly committed to comply

with corporate, environmental laws and to conduct their business with utmost

honesty and sincerity. At AHL it is believed that development can only be achieved

by equality and respect at work place. They have been doing it for decades and

there is no doubt they are reaping its benefits. AHL has a manufacturing capacity

of 910 units per shift under strict quality standards and their sale network is well

spread to sell all of them. They have a 5s dealer network to satisfy the customer

to the optimum level.

I was posted in the spare parts division and was given a project to study the spare

parts competitor firms in the market, to evaluate them and compare them with AHL.

The report of the project is attached herewith in Annexure – A.


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CHAPTER-1. BACK GROUND OF HOST ORGANIZATION

TWO WHEELER INDUSTRY IN PAKISTAN

Pakistan motorcycle industry is flourishing as it met 95% localization through state

of the art technology implementation, billions of investment and hundred

thousands of skilled work forces. In this potential industry, contributors have played

their vital role to not only making it able to compensate local demand but also for

exporting various models of motorbikes in different countries. Pakistan,

motorcycles’ sales stood at 1.44 million units in first 10 months of FY14 according

to Pakistan Bureau of Statistics (PBS) data. (Admin 2015)

Presently there are 43+ motorcycle assemblers in the country. Out of these, there

are three Japanese assemblers (Honda, Yamaha and Suzuki), while the remaining

40+ assemble Chinese motorcycles. These assemblers buy parts, sub-assemblies

and assemblies from over 200 large, medium and small vendors located in Karachi

and Lahore. It is estimated that the motorcycle industry employs to more than

200,000 people directly and indirectly.

The motorcycle industry in Pakistan has recorded strong growth over the past

decade, mainly due to increased urbanization and induction of many new players

in the market who are manufacturing and providing motorbikes at much cheaperprices, but nobody has been able to beat the market leader, Atlas

Honda.(defence.pk 2015)

TWO WHEELER SPARE PARTS INDUSTRY IN PAKISTAN:

Like the two wheeler vehicle industry in Pakistan, spare parts industry is also a

leading industry as it generates a handsome amount of revenue for the automotive

manufacturers as well as local sole part dealers. There are three types of business

present in the industry, all having its own perks and privileges. First category is of

those multinational and national organizations who are manufacturing spare parts

in Pakistan and is selling in the local market. Second category is of those who are

importing parts and selling in the market, however there is also a third type of


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organizations who are both manufacturing locally and are also importing from

outside countries.

Whatever the source of production is the industry of spare parts is highly

competitive and is currently in its growth stage, while the business in the saidindustry is highly profitable and stable, there are certain factors which threaten this

industry in the near future. The detail of which will be discussed later in this report.

AN OVERVIEW OF ATLAS HONDA LIMITED

1.3.1 The Group:

Atlas Honda Limited is a joint venture between the Atlas Group and Honda Motor

Co., Japan. The foundation of the Atlas Group was laid in1962 with the

establishment of Shirazi Investments (Pvt) Limited with a capital of half a million

rupees and three men doing business in trading shares and real estate. The growth

of the Atlas Group is the result of its focus on good corporate governance. Today

Atlas is a diversified group dealing in engineering, financial services and trading.

It consists of seven public limited companies out of which six are quoted on the

Stock Exchanges in Pakistan, and five private limited companies. Atlas

shareholders equity now stands over 25 billion rupees; assets have increased to

over 60 billion rupees; personnel strength is over 7000 and annual sales have

crossed 60 billion rupees. The Group paid taxes of Rs. 15 billion over 2% of the

total government revenues. All this progress is due to the Group's reliance on the

intellectual capital, dedicated efforts and team spirit of all the stakeholders. Every

member is striving for excellence and taking pride in the Group's motto:

“Organizational Development through staff development”

Taken from the annual report of AHL;(Honda 2014)

1.3.2 The Company

According to Atlas Honda website: Atlas Honda Limited is a joint venture between

the Atlas Group and Honda Motor Co., Japan. The company was created by the

merger of Panjdarya Limited and Atlas Autos Ltd. in 1988. Both these motorcycle

manufacturing concerns were established by the Atlas Group. In addition, a third


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concern, Atlas Epak Ltd. was taken over by the Government of Bangladesh. Atlas

Honda Limited manufactures and markets Honda motorcycles in collaboration with

Honda Motor Company. The Company also manufactures various hi-tech

components in-house in collaboration with leading parts manufacturers like Showa At sumitech, Nippon Denso and Toyo Denso. Honda motorcycles are by far the

largest selling motorcycles in the country with an unmatched reputation for high

quality, reliability and after-sales-service. Atlas has undertaken to develop local

manufacturing capabilities to the highest, economically feasible level. While a

major role in localization has been assigned to vendor industries, Atlas has the

country’s largest in-house manufacturing capability at its Karachi and Sheikhupura

plants. To support the production facilities, the company has established an R&D

wing and tool making facilities through CDA & CAM which are growing rapidly in

size and function as the company expands. Atlas has managed to execute 14 Joint

Venture/Technical Assistance Agreements between local vendors and foreign

manufacturers for transfer of technology. Besides, Atlas has directly executed 5

Joint Venture/Technical Assistance Agreements other than Honda. Atlas

management is striving to modernize company operations by adapting applicable

aspects of research and theory and more specifically, Honda’s unique philosophy

of hard/soft technologies to the realities of Pakistani conditions. Company

management structure, systems and processes are changed according to the

demands of the customer, growth and new technology. Efforts are being made to

develop participation at all levels of personnel in decision-making and a substantial

and effective delegation has been established at levels where applicable. Various

participation programs such as ‘Ala Mayar’ Quality Circles movement, launched in

1985, are strongly encouraged to allow constructive self-expression and

teamwork. The Company training and development programs encourage all

members to develop themselves and contribute to their full potential .Atlas Honda

is playing a pioneering role in creating conditions for easy and confident use of

motorcycles all over the country. A vast and growing network of over

1600motorcycles sales service and spare parts dealers has been established. In

order to back up this system, Atlas has set up Technical Training Centers in


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Karachi and Lahore which provide several courses of varying duration and

complexity for motorcycle mechanics and users each year. Mobile training facilities

take the latest know-how, technology and maintenance of motorcycles to major

rural and urban centers around the country.Taken From : (AHL 2015)

1.3.3 Plants:

1.3.3.1 Karachi Plant:

Company mother plant is based in the city of lights and provincial capital of Sindh,

The Karachi city. It is located at F-36, Estate Avenue, S.I.T.E. Karachi. Atlas Group

signed technical agreement with Honda in 1963 and plant started commercial

production subsequently. Plant spread over an area of 5 acres. In 1964, production

began with 7motorcycles per day. Now plant production has reached to 300 units

in a day. Plant manufactures CD 70 only.

1.3.3.2 Sheikhupura Plant:

Another plant is situated in Sheikhupura city, Punjab. It is located at 26-27 KM

Lahore-Sheikhupura Road Sheikhupura. The plant was built in 1981 and spread

over an area of 27 acres with the establishment of modern and synchronized 500K

plant in 2006. The plant manufactures all four models i.e. CD 70, CD100, CG 125and CG 125 Deluxe.

1.3.4 Annual Production Capacity

The annual production capacity of AHL of both plants is almost 750,000. Every 26

second a motorcycle touches the ground.

1.3.5 Authorized Capital

1.5 Billion (rupees)

1.3.6 Export

Currently Atlas Honda is exporting limited number of motorcycles to Bangladesh,

Afghanistan and Srilanka.


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1.3.7 Regional Offices

Lahore: 1 Mecloed Road Lahore-54000 [ (042) 111-111-245, 37225015-

17, 37233515-17 ]

Rawalpindi: 60-Bank Road, Saddar [ (051) 5120494-6, 5120497 ]

Multan: Azmat Wasti Road Multan-60000 [ (061) 4540054, 4540028,

4571989 ]

Rahim Yar Khan Atlas Honda Limited, 4B Zamindara Colony [(068)

5888809 ]

1.3.8 Stock Exchange Enlistments

Karachi Stock Exchange

Lahore Stock Exchange

1.3.9 Membership of Industry & Associations

Pakistan Automotive Manufacturers Association.

Marketing Association of Pakistan.

Management Association of Pakistan.

Lahore Chamber of Commerce & Industry.

Sheikhupura Chamber of Commerce & Industry.

Overseas Chamber of Commerce & Industry.

Karachi Chamber of Commerce & Industry.

http://www.kse.com.pk/http://www.lse.com.pk/http://www.lse.com.pk/http://www.kse.com.pk/


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PRODUCTS

Atlas Honda offer a wide range of products in Pakistan, in addition to its traditional

70 and 125 models it has also launched CBR racing series. Spare parts is also a

major source of business for the company.

OBJECTIVES OF AHL

The Company remains committed to deliver on its long term objectives of

sustainable growth and value creation. This is being achieved through continued

focus on operational excellence, product portfolio diversification, cost reductionand a strong capital structure.

STRATEGIC GOALS OF AHL

1.6.1 Customers

Our customers are the reason and the source of our business. It is our joint aim

with our dealers to ensure that our customers enjoy the highest level of satisfaction

from use of Honda Motorcycles.

1.6.2 Quality

To ensure that our products and services meet the set standards of excellence.

Local Manufacturing

To be the industry leader in indigenization of motorcycles parts.

Figure 1: Products adopted from (AHL 2015)


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1.6.3 Technology

To develop and maintain distinct business advantages through continuous

induction of improved hard and soft technologies.

1.6.4 Shareholders

To ensure health and viability of business and thus safeguarding shareholders

interest by maximizing profit. Payments of regular satisfactory dividends and

adding value to the shares.

1.6.5 Employees

To enhance and continuously up-date each member’s capabilities and education

and to provide an environment which encourages practical expression of the

individuals potential in goal directed team efforts and compensate them attractively

according to their abilities and performance.

1.6.6 Corporate Citizens

To comply with all government laws and regulation, to maintain high standard of

ethics in all operations and to act as a responsible members of the community.

The above strategic goals were taken from Atlas honda’s Website: (AHL 2015)

VISION & MISSION OF AHL

1.7.1 Vision:

According to the official website, Company’s Vision is as follows (AHL 2015)

“Market leader in the motorcycle industry, coming up as a globally competitive

center of production and exports”

CEO’s vision is very clear. AHL is currently market leader in motorcycle industry

by a wide margin and would definitely like to retain this distinction, with current

55%market share, company is well positioned. However, in future after WTO

complete implementation, protection from foreign competition would reduce, as


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duty on imported motorcycles will be further brought down from the current level

of 75%

1.7.2 Mission:

According to the official website, Company’s mission statement is as follows (AHL

2015)

“ 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.”


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CHAPTER-2. DIVISIONS /DEPARTMENTS OF AHL

DIVISIONS OF AHL

Atlas Honda have following department and divisions which integrate

together and are responsible for the success of the company at their own

part. The following data was adopted from the SOPs of Atlas Honda Limited,

provided by my manager. (AHL 1985)

LOGISTICS DEPARTMENT

Under vendor improvement Program Company ensure timely supply of raw

material; reduce rejection in parts and ensuring quality under the assistance

of quality assurance department. Improve the sourcing of vendor to make

them company strength.

Purchase department control all purchases other than auto (bike) like

stationary, kitchen items, office supplies and all type of purchase but not

motorbike or parts related.

Vendor procurement department purchase parts and other auto related

parts from local, head office, and from import. Many parts are manufactured

through in-house facility of AHL as frame body, paint, hub, fuel tank, cylinder

head casting, and shocks/cushions of bike in Sheikupura plant. Fourth

department under logistics is dispatch or delivery of finished goods (motor

bike) to the market as required by marketing department. Under this logistic

department control and handle the mobility and transition of company

product through company transport (trucks). The main functions of the AHL

can be summarized in the following ways:

Main Functions:

Vendor Procurement (VP)


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Local Purchase

Finished Goods Dispatch

Vendor Improvement Program (VIP)

Out Source Processing (OSP)

PRODUCTION PLANNING CONTROL:

This department control overall production, and also planning for future and

define the production level. Coordinate with the marketing department for

the production of the bikes. Defining the items to be procured locally. To

conduct warranty claim down meeting for the sake of reducing the warranty

claims. To define items to be procured from Honda Japan. Coordinate with

quality assurance department for the maintenance of quality standards.

Man management to mobilize the manpower for the execution of production

plan

Production department has three plants:

Assembly Plant

Engine Plant

Casting Plant

Functions:

Issuance of Production Plan

Execution of Production Plan

Forecasting Production on the basis of Sales Forecasting of

Marketing & Sales Department

Target setting in Production daily, weekly, monthly and yearly

basis

Synchronization between all the department into meet

production targets


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Two levels of Planning

Macro Level Planning

Micro Level Planning

QUALITY ASSURANCE DEPARTMENT:

This department assures at Atlas Honda Ltd. that motorcycles here are

produced with Highest Quality and their parts.

This department is dealing four sections.

In Coming & Receiving Unit

Quality Assurance vendor (QAV)

In House Section

Final Inspection

I.T DEPARTMENT:

Transition period in it department is going on and company is shifting its

entire system from oracle developer to SAP (system application & products

data process. For this purpose Siemens professionals are implementing

SAP modules in head office and providing training to AHL executives to be

familiar with SAP. Without SAP it is difficult for it department to prepare

global reports as per required by our foreign investor Japan. And there are

lots of hurdles to receive timely information. From September 1 SAP will be

implemented company has purchased its 6 modules out of 21 modules. So

it will be great transition period in company’s IT department. AHL’s Lahore

and Sheikhupura plant is linked with each other through radio link on one

server. So information can be shared on the same time on the same places.

The main advantage of this change is time saving, efficiency enhancing and

generating extra storage for data. Following are the functions of the IT

Department:

Main Functions:


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Software Development

Troubleshooting

Oracle & Developer 6AI

Windows upgrading & installation

UNIX

Lotus Notes

LAN & WAN System

Use of WAN

CORPORATE AFFAIRS: All the company matters at corporate level are handle by corporate affairs

department. Like dealings with manufacturers union (PAMA, Pakistan

automotive manufacture association.).

Dealings with government in terms of taxes, import tariffs and other matters

etc.

Areas of activities:

Engineering development board:

It facilitates imports and less import duty by fulfilling the SRO (statutory

regulatory ordinance.) and took facility of less duty.

PSQCA:

It controls quality. And standardize it. If any product meets its standards it

gives a certificate for production. And this certificate is required to be

renewing after a specific time period.

PAMA (Pakistan automotive manufacture association):

All the government affairs are handled through PAMA. E.g. cost, taxes

etc.


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Valuation:

Helps to stop misuse of law. E.g. other motor cycle manufacturers imports

parts from china and say them to paste less price tag and take original price

from us to save themselves from taxes. So it was suggested that tax should

be on value or import item not on price.

Valuation of parts are done and duty will be according to their assigned

value.

HUMAN RESOURCE DEPARTMENT:

HR Department is the most important department in any organization. It

depicts the outer look as well as inner look to the market about the companyoperations and image.

HR Department in Atlas Honda Ltd is increasingly invited to participate in

strategic planning and organizational goal setting. It has also becomes

involved in personal and career development (to prevent stagnation and to

develop talent), in interpersonal relations (to assure teamwork and accurate

communication), in attending to associates’ needs (to demonstrate the

organization’s concern for them), and in associate participation in work life(to help associates perform at their full capacity).

Objectives:

Meeting Organizational Goals

Developing Future Managers

Major Functions:

Human Resource Planning

Forecasting Human Resource Needs by keeping touch the

concerned departments

Retaining Employees

Attracting Employees


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Labor Relations Influences

Balancing Labor & Management concerns

Organizational Structure

HR Analysis

Job Analysis

Staffing

Training & Development

Compensation Management

Employee Evaluation

Employee Movement & Replacement

On & Off Timing:

Plant 7:45am~ 5:20pm

Head Office 8:20am ~ 5:40pm

Break Timing 1:15pm ~ 1:45pm

For Late Comers:

If less than 30 minutes late (Less than or equal to 4

times in a month), then it is marked as 1 absent.

If more than 30 minutes, then it is marked as short

leave

Leave Policy:

Compensation Privilege Leave (CPL) in lieu of working

in off day.

Give Rs.750 for Grade 12


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Can get leave in working day

Retirement Policy:

Age: 60Years

What’s given at retirement? 20 grams gold (Gift)

Termination Rate 2%

Resignation Intimation Period 1 month

Human Resource Planning:

Requisition Slip from concerned department

Approval

Advertisement

Develop Application Pool

Short Listing of Applicants

Test of Applicants (50% marks are required to appear in

1st Interview)

1

st

Interview (GM of concerned department, Manager HR)

2nd Interview (CEO, GM HR & Admin, Manager Admin &

IR)

Complete Medical Examination from Shaukat Khanum

Memorial Hospital

Orientation

Complete Personal File

Entry in Personnel System

Probation Period (6 months)

Issue Confirmation Letter

Training and development:


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Training need assessment (TNA) (supervisor suggest

training)

Annual training

Benefits:

Car and motor cycle (grade 11 and above car, grade 12

and 13 motorcycle, grade 15 motor cycle with installments)

Bonuses

Gratuity

Provident fund

Group life insurance

Health insurance

Personal benefits

Compensatory leaves

Allowances

Personal loan

Performance appraisal system:

PDC (plan, do, check) process is followed for the appraisal system. Plan

is done by the people. Performance is also evaluated with by relative

evaluation process. The evaluation process is as follows.

Send appraisal form

Self-appraisal

Set objectives

Rationalization of rating with hod

Record hods comment

Post appraisal interview


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Collection of all forms by hod

Hod should write a separate note, (if required, recommend

salary adjustment)

STORES DEPARTMENT:

The main function of this department is to provide parts, materials and

services to production without any kind delay, and ensuring that there is no

stop in production assembly line of motorcycles in Atlas Honda Ltd.

The second function of this department is to keep record of all the parts and

materials, which are issuing and receiving.

Store Department can be classified into six further sections. Which are as

follows:

Receiving Section

Issuing Section

Raw Materials Store

General Store

FINANCE DEPARTMENT:

This department deals with the financial transactions and financial

management of Atlas Honda Ltd.

Sales Taxation

In atlas Sales tax is a department which is working on two type of sales tax the

account manage vendor’s tax on their sale and also manage tax payment on our

product sale

Salary Structure

Total attendance received from HR department amount finalized by payroll

department according to number of hours of working in this account the accountant

make a voucher on the basis of bill then bill is signed by finance manager .So I


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have to enter in computer in SAP system .over time is also claimed as per grade .

Payroll department deduct conveyance, medical, EOBI and also canteen charges

from employees salary and also deducted advances,

Salaries & wages A\c *****

To Bank A\c *****

Taxation

Input sales tax

In input sales tax the department has to deduct present rate of sale tax from

vendor’s cheque and Sale tax is claimed by the government

Output sales tax

In output sales tax we have to pay tax on our sales

Withholding tax:

Sales tax department also deduct withholding tax from vender cheques there are

two types of withholding which is deducted on good the department deduct 3.5%

on goods and deduct 6% on supplies

The department reconciles receivable or payable by ‘FBR at monthly

Factory Overhead Transactions

Employees who are linked by manufacturing and by production department those

salary expenses enter into FOH by SAP specific code e.g. 5210100

Accounts payables

In vendor payment department invoices come from billing department the

department have to verify bill invoice and vendor specific code and enter payment

in his account and create cheque for him. Sometime department directly paid or

directly received payment from supplier or customer they create three type of

voucher for the this purpose


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Cash received voucher in this voucher the receive cash against sale of their scrap

cash payable voucher in this type they pay cash to private contractor for their

service or good.

Financial reports

Preparation of financial reports on annual, semiannual and quarterly basis

accounts for a major function of the finance department.

Bank Reconciliation

Bank reconciliation deal with different types of banks in this department Atlas

finance system mostly, make payments through bank and also receive cash

through bank so at the end of the month department reconcile its balance with the

bank it is happened at every end of the month.


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CHAPTER#3 ORGANIZATIONAL ANALYSIS

SWOT ANALYSIS

The SWOT analysis of any company shows the standing of a company at a certain

point, I have done a SWOT analysis of AHL as follows:

3.1.1 Strengths:

Strong Organizational culture

Atlas Honda Limited follow a very bonding and strong organizational culture. Due

to the joint venture with the Japanese company, there is a strong influence of

Japanese organizational practices on the culture of Atlas HONDA Limited. There

is a distinct sense of respect between employees at all level, the practice of uniform

at both plant and at regional offices and the concept of a single cafeteria, create a

sense of equality among employees and motivate them.

Excellent Brand image.

AHL enjoys a significant brand strength in the market. The Brand image of Atlas

Honda is very strong, and bears a promise to quality and value of money, boosting

the sales of the company.

Qualified and well trained staff

AHL’s HR policies are strict and adherent to such quality measures which ensure

the acquisition of highly trained and qualified staff, continuous programs of

employee professional and personal development are carried to ensure the up to

date knowledge of the skilled and non-skilled labor at AHL.

High quality products

Atlas Honda is a symbol of quality, company’s products are perceived as high

quality product, among the buyers, and are regarded as a safe investment in a

vehicle.

ISO certified


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Atlas Honda achieved ISO 9001 certification in 1999 and ISO 14001 certification

in 2003. And since then they have competed the respective surveillance audits

periodically.

Resale value

Among the competitors in the market, Atlas Honda’s products have the most resale

value in the used motorcycle market, providing the customers another incentive to

choose Honda over other competitors.

Market share and volume.

Atlas Honda enjoys the largest market share in the market, in terms of both volume

and presence.

Experienced, developed and loyal service dealers network.

AHL emphasize a lot on its service and dealer networks, these dealers which are

widely present in almost every region of Pakistan. This helps Company to ensure

the distribution of products even in remotely accessible areas.

Largest and penetrated 4-stroke mechanics network.

The Atlas Honda Family is an important part of the company’s focus group. This

family consist of one of the largest and most penetrated mechanics network in

Pakistan, and they are involved in different promotional and mechanic welfare

programs.

Best warranty system.

An efficient and quickly accessible warranty system prevails in the company, the

warranty claims are dealt on an urgent basis and the customer is facilitated by the

use of local and divisional dealing of the claims, which is opposite to the central

dealings of the competitors.


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3.1.2 Weakness:

Lack of marketing in Spare Parts Division

Spare parts division lacks an effective and efficient marketing campaign, which

allows competitors to fill in the gaps and grasp additional market share.

High price of products

Prices of Atlas Honda products are very high as compared to its competitors in

market. This is a reason which discourages the consumers to purchase AHL

products.

Difficult to maintain high quality production at high market demand

AHL has started outsourcing many production units and parts, although AHL hasdefined quality assurance procedures and policies, however there is still many

quality related problems and issues arising every day.

Complexity in coordination and communication among facilities, vendors and two

geographical locations i.e. Karachi and Sheikhupura plants

AHL uses a software for order booking, which is operated by the Karachi plant

having client servers in Lahore office and sheikhupura Plant, Although the process

of order taking and posting is very systemized, however it is highly complex and

time taking.

3.1.3 Opportunities:

Exploration of new markets.eg. Srilanka, Africa. And other countries.

AHL is already exporting to Afghanistan, Bangladesh and some African countries,

however many African and some south Asian markets are open for AHL to

penetrate and expand their business there.

Stabilize the improve process of export to Afghanistan, and Bangladesh to capture

more market share.

The current exports to Afghanistan and Bangladesh is both, less in number and

very costly to the company, By capturing more market share in these countries,

the cost can be reduced and the process of export can be stabilized.


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Newly developed areas/markets (e.g. Gawader)

With the development and construction of China-Pakistan Economic Corridor,

there are many regions of Pakistan which would be developed as industrial and

domestic areas, there is a great market opening there for AHL.

Industry expansion

The entry into car spare parts market as a whole division, 3 wheeler market, and

universal spare parts market, AHL can expand its industry on a good level.

Technology upgrading

Rapid change in technology is making the work more easy and cost effective,

however the technology being used in AHL is comparatively low graded then itscompetitors like Yamaha. Upgradation can help achieve cost cuts and increase

profit.

3.1.4 Threats:

Chinese cheaper products challenges

Many Chinese companies have entered the market with low priced, and low quality

products. The increase in the number on periodic basis is alarming.

Strong competition from competitors in near future

Yamaha and other well-known brand of 2 wheelers are entering the market and

pose a threat to AHL.

Energy crisis

Energy crisis has affected the production of AHL in the past and is still a threat to

the production capacities of AHL in the near future, unless and until a complete

solution of this problem is discovered.

High rate of taxation

Increasing tax rates poses threat to every business, both import duty and other

direct and indirect taxes reduces AHL’s profit with every upwards fluctuation.


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ORGANIZATIONAL STRUCTURE

C.E.O

Production

H.R

Engineerin

g

Logistics

I.T

Finance

Marketing

I. Sales

Services

S. Parts

Sales

DD & CC

V. I .P

F. G. D

Local

Purchase

V. P

Out Source process

Welding

Frame

Assembly

Paint

Industrial

Relation

Human

Resources

Figure 2: Organizational Structure(Main)


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MARKETING OVERVEIW

3.3.1 Brand:

Honda enjoys a very strong brand image, following data from this website will showyou the market strength of AHL:(Bikez.com 2015)

What is Honda?

Honda is an entity that realizes the dreams of individuals and spreads joy to

people. Honda's philosophy, unique corporate culture, pursuit of challenges that

fulfill individuals' dreams and variety of products and activities born of challenges

will remain the foundation of the Honda brand. We will continue building on our

history of realizing people's dreams.

Honda's Driving Force:

The expectations and appreciation of people around the world for our dreams.

People see Honda as pursuing its dreams and always remaining a step ahead of

the world. This image and the people’s appreciation of our outlook will continue to

be the driving force of the Honda brand.

Honda's Goal in Branding:

To create a brand that is supported by people’s expectations and appreciation.

Global Brand Slogan:

Everyone has a dream, some goal or activity that gives their life a deeper meaning

and sparks passion. When we pursue a dream, we feel empowered. This power,

in turn, connects us to others who share the same dream. It gives us the strength

to overcome great challenges and inspires us to spread the joy of our dreams to

others. Ultimately, the power born of a dream is a creative force, capable of

producing revolutionary ideas. Honda encourages all is associates to pursue their

dreams. That is why we say we are a company built on dreams. In the new century,

the power of Honda's dreams will continue to lead new insights and technologies

in automobiles, motorcycles, power products, parts and other fields of mobility that

are just beginning to be imagined. Dreams are the very essence of Honda. The

dreams of our associates, customers, and supporters make Honda what it is today.

Our highly original ideas and free thinking have surprised the world on many


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occasions. Honda will continue to be Honda in the 21st century as long as we have

our dreams and original thinking. We will keep on dreaming and challenging

ourselves to realize our dreams.” What will we come up with next?” We will

continue creating exciting products and realizing people’s dreams andexpectations. Our slogan For Honda to remain Honda, and for everyone to realize

their aspirations, we must believe in "The Power of Dreams"

3.3.2 MARKETING MIX

PRODUCT

Honda currently offers six brands in the market: CD-70 and CG-125 (CD and

CG are manufacturing model codes for the motorcycle and 70 and 125 are the

displacement volumes of the engines). Among these there are Prider, Deluxe,

Dream and CBR.

In the past, Honda has offered more than 40 brands for its customers, which

were taken out of the production process due to their declining sales and

contracting markets.

The main features of Atlas Honda motorcycles that have given it the edge over

its customers are: High resale value, fuel economy, durability and reliability. The product parts installed in the motorcycle are produced in-house, purchased

from vendors or imported from Japan as CKD (Complete Knock Down) units.

PLACE

Atlas Honda has two production plants at Karachi and Sheikhupura. At the

Karachi plant, only CD 70 is produced while at the Sheikhupura plant, CD 70

and CG 125 and rest of the models are produced. The Karachi plant is on 5

acres while the Sheikhupura plant is on 25 acres.

The distribution network of Honda comprises of 64 Antenna Dealers and 925

Service Dealers all over the country (Antenna Dealers are responsible for the

warranty claim by the customer and its relevant processing while Service


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Dealers are responsible for sales and parts replacement and service to

customers).

4-Stroke Mechanics are independent mechanics who are trained by Honda to

provide service to customers. Honda trains them in 4-stroke technology andlater if they provide excellent service and satisfaction to customers, Honda can

make them Service Dealers after quality assurance check.

PROMOTION

Atlas Honda practices advertising but only to a limited degree. The reason

being that it already has a well-established market and excess demand.

The need for advertising arises when the product is to be ventured out into

newer arenas or newer markets. Due to this factor, Atlas Honda has started

advertisements some time back.

The most common advertisement seen on the media is on GEO TV with a

catchy theme and tune.

Other than this advertisement, Honda uses sign boards, pana flex boards and

billboards to display its products.

Print media is also employed for advertisements due to the fact that newspaper

is a widely read medium of information.

Atlas Honda has sponsored Independence Day rallies in the past.

In the last Champions Trophy, Atlas Honda sponsored hockey matches but this

needs to be practiced on a more regular basis.

PRICE

For the CD 70, Atlas Honda has set the price at Rs.58500 and for CG-125, the

price is Rs. 73000. These prices have been revised after a Rs.10000

decrement in the price of Atlas Honda some time back.

Chinese competitors’ motorcycles lie in the range of Rs.30000-50000, due to

which people are going for Chinese motorcycles (cost factor but poor quality)

but still cannot reach the market leader spot that Honda has occupied since

many years.


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Yamaha and Suzuki have also f ollowed in Honda’s footsteps and decreased

their prices accordingly.

3.3.3 COMPETITORS BRANDS & MODELS

There are more than 70 motorcycles brands in Pakistan, to name a few top

competitors we can look at the following list.

Yamaha

Yb-100 Excellence

Yama-4

YBR 125

Suzuki

SD-110

SD-Flash

Sohrab

JS-70

JC-125 (china)

Pak hero

PH-70

Hero RF-70

RF-125

Star

DS-70

C-70 (CBU)

Lifan

LF-70

LF-150

Jailing

JH-70 (Remot-Self)

JH-70 (Without)

.


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SIX KEY PRINCIPLES OF ATLAS HONDA:

Back to basics:

The analysis of customer, competition, company, and cost is put in focus at the

start of each endeavor.

3Rs (Respect, Recognition, and Reward):

To be a great company, we need to put respect, recognition, and reward-and in

that order-at the core of our management practices.

Cash is king:

The company is cash rich, we will have the resources to beat the competition. We

must re-assess and re-vitalize the focus on generating and preserving cash.

Analysis, analysis and analysis:

The decision making procedure be supported by a combination of “data analysis”

backed by”genba” on the spot analysis.

Customer first:

The endeavor of our company need to be that we understand the company more

deeply and create market or financial solutions for him to buy his “dreams product -

our product”

850 k is must in 2015:It is our goal to sell a minimum of 850k in 2015. For this we must use revolutionary

path instead of evolutionary in everything we do.


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CHAPTER-4. INTERNSHIP PROJECT

INTRODUCTION OF PROJECT

I was assigned a project to study and analyze the various spare parts marketing

companies in the market and to compare them with HONDA and make necessary

comparisons in order to draw some conclusions and draft suggestions.

DESCRIPTION OF PROJECT

The current project is intended to explore the 2 wheeler automotive industry in

Pakistan with special focus on the spare parts sector of the industry. In this project

I explored the spare parts markets in Lahore and identified the market behavior

and studied the market structure. After classifying major market share holders and

competitors (Atlas Honda, Crown Lifan, Ishiwachi, Road prince), I studied each

company, their management practices, did their SWOT analysis and interviewed

their A class managers.

This helped me to do a comparative analysis of all these companies and identify

the gaps to derive conclusions, and to make suggestion to Atlas Honda limited.

FINDINGS OF PROJECT

Spare parts contribute almost 9% of the company’s sales revenue. This shows that

spare parts are an integral and important part of atlas Honda limited. So now that

we have judged and analyzed the importance of SPD in atlas Honda limited, I will

list down the major differences of atlas Honda limited and other companies.

1. Atlas Honda has a well reputed name and a great goodwill among the

consumers in market.

2. Honda gives highest margin to its dealers to enjoy.

3. Atlas Honda has largest market presence of 24%.

4. Atlas Honda has the slogan of proved quality and 100% genuine products.

5. Atlas Honda has a very strong distribution and retailer network.

But having said all that;


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Atlas Honda's spare parts are the highest priced parts in the market. This may

deprive company of the sale from the customers seeking low priced products.

Atlas Honda have largest amount of counterfeit products present in the market,

mainly because of the following reasons i identified

A) The brand name of Honda is sold a lot in market

B) The price of Honda is high in market so counterfeit will result in more

profits

C) Legal actions of Honda have been very soft in the recent past.

Although u can see Honda having highest or second highest sales in market, but

the presence of counterfeit brings down the original sales of AHL.

Atlas Honda has a week and stagnant marketing practices.

Atlas Honda has a no credit policy in contrast to the market trend

A DETAILED INTERNSHIP PROJECT REPORT IS ATTCHED

HERWITH THIS REPORT IN THE ANNEXURE-A.


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CHAPTER-5. LEARNING AS AN INTERN

DUTIES

I was placed in the spare parts division and my major duties included:

Market visit:

My first task was to visit the major spare part markets in Lahore and asses he

presence of different brands of spare parts in the market, and to enlist them and

also to communicate with the AHL shop managers as an outside person and to

inquire about the counterfeit in the market.

Market overview:

I was asked to make a market overview, with special focus on the 4 major spare

parts selling companies in Pakistan.

Customer Review:

In my visit to the markets I was supposed to identify target market and

demographic of the current customers of AHL spare parts.

Price Comparison:

A price comparison was assigned to me, collecting retail and wholesale price lists

of different companies and to make a comparison of the wholesaler margin and

customer retail price was included in this task.

PCMO Work

AHL is planning to launch Passenger car motor oil in the market, for that they

assigned us a task to visit the badami bagh market and the lorry ada market of

Motor oil and collect some initial information about them..

Internship project

An internship project was assigned to me the detail of which is attached with this

report as Annexure-A.


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ACCOMPLISHMENTS

Accomplished a major marketing survey for the

organization for their upcoming product PCMO

Completed my internship project assigned to me, and was

declared the best project in my department

NEW KNOWLEDGE ACQUIRED

I came across many things that were new to me, first of all the

industry was itself very much new to me. I never looked at the 2 wheeler industry

the way I look at it after completing my internship. Furthermore the spare parts

market was also very new to my knowledge. The practical and professionallanguage used in the market and the ways in which a dealer can be convinced and

how can u sell your desired product at your desired rate in the market also added

up as new additions in my mind.

Atlas Honda Limited is a great corporate giant in our country, being part of it was

itself a great honor and pleasure. The highly competitive and professional

environment of AHL host a very learning environment and the experienced and

trained staff help you a lot in your learning and grooming. AHL taught me a lot ofthings; AHL helped me in experiencing the practical aspects of the theoretical

knowledge we gained in our university. Following are the things to highlight;

i. Markets behavior

ii. Structures

iii. Selling techniques

iv. Distribution methods

v. Market dealing

vi. Corporate dealing

vii. Professional culture

viii. Professional dressing


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ix. New terminologies

x. Market response

xi. Marketing failures

xii. Marketing techniques

xiii. Survey techniques

xiv. Interview skills

xv. Summarization and classification.

The above listed are a few in many of the things I learned from AHL. I found this

internship full of learning, knowledge and new experiences.

PROBLEMS ENCOUNTERED

As an intern I faced many problems at my very first job. But the very friendly and

skilled staff of AHL was always there to help me and guide me through it.

I faced problems while identifying the markets, and penetrating it. Convincing

shopkeepers and dealers to even talk to you and then provide you your desired

information was also a very tricky job. Absorbing the organizational culture was

itself a big problem. Visiting different companies as a student and getting their

information was also a very difficult task.

But my mentors at AHL were always there to guide me through each and every

step and show me the right path to do things.

IMPACT ON CAREER

This internship left a great impact on my career goals and planning; I experienced

different fields and decided to change my specialization. It changed my perspective

of professional life industries. I learned how to survive in the very bursting lava of

professional competition and how to make your way up while leaving your place

vacant for new comers. I experienced interactions with many experienced

professionals of AHL as well as other companies and this helped me to alter my

perspective about the different level of managements in a hierarchy. This


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internship can be termed as a turning point in my career and will always be the

ground breaker for me till my professional life continues.

CHAPTER-6. RECOMMENDATIONS AND CONCLUSION

RECOMENDATIONS

Atlas Honda is a great corporate giant, however there are certain things which if

improved can lead to a better working of the company and improved performance

of the company.

1. Atlas Honda's spare parts are the highest priced parts in the market. This may

deprive company of the sale from the customers seeking low priced products.

2. Moreover Atlas Honda have largest amount of counterfeit products present in

the market, mainly because of the following reasons I identified

The brand name of Honda is sold a lot in market

The price of Honda is high in market so counterfeit will result in more

profits

Legal actions of Honda have been very soft in the recent past.

Although u can see HONDA having highest or second highest sales

in market, but the presence of counterfeit brings down the original

sales of AHL.

Atlas Honda has a week and stagnant marketing practices.

Atlas Honda has a NO credit policy in contrast to the market trend.

3. Marketing policies can be improvised by making them more mechanic focused

and by introducing more attractive schemes for them.

4. Atlas Honda have a large share in spare parts market but that is due to large

number of motorcycles the brand cater in the market, however this is not the

case with the other leading companies, by focusing more on non AHL bikes and

their parts, HONDA can acquire more market share.

5. A strong legal team should be taking actions against the counterfeit in market

and necessary actions like awareness about genuine products and security

steakers etc should be taken in order to reduce the counterfeit. Only reducing

counterfeit in market can boost up the sales.

6. Credit policy should be introduce, to cope up with the competitors in the market.


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7. Spare parts division should be decentralized and the order taking and delivering

process should be simplified and quick.

CONCLUSION

Atlas Honda Limited is a leading company in our country, It follows some of the

best organizational policies and practice them. This internship introduced me to

many aspects of the working of AHL in Pakistan. I observed some gaps in their

marketing policies of Spare parts division, and improving of which will help the

company to grow and expand in this sector as well.


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JARGONS & ACRONYMS

AHL Atlas Honda Limited

CRLF Crown Lifan

ISH IshiWachi

RP Road Prince

CPL Compensation Privileged leave

PBS Pakistan Beau rue of statistics

PCMO Passenger car motor oil

NOTE: IN THE COMPILATION OF ABOVE REPORT ATLAS HONDA

WEBSITE AND THEIR STANDARD OPERATIONG PROCEDURES WERE

WIDELY USED.(AHL 2015)


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BIBLIOGRAPHY

1. Admin (2015). "Bikes Articles." Retrieved 26/08, 2015, fromhttp://bikes.qeemat.com/news/.

2. AHL (2015). "ATLAS HONDA." Retrieved 26/08, 2015, fromwww.atlashonda.com.pk .

3. AHL (2015, August 24, 2015 @ 2:39 pm). "Company l Atlas Honda." Retrieved26/08, 2015, from http://atlashonda.com.pk/corporate/company/.

4. AHL (2015, August 24, 2015 @ 2:39 pm). "Strategic Goals l Atlas honda."Retrieved 26/8, 2015, from http://atlashonda.com.pk/corporate/strategic-goals/.

5. AHL (2015, August 24). "Vision & Mission l Atlas honda." Retrieved 26/08, 2015,from http://atlashonda.com.pk/corporate/vision/.

6. AHL, C. D. (1985). SOPs AHL, Atlas Honda Limited. 2: 234.

7. Bikez.com (2015, 2015). "2015 Atlas honda." Retrieved 26/8, 2015, fromhttp://www.bikez.com/motorcycles/atlas_honda_cbr_150_2015.php.

8. defence.pk (2015, 25-8-15). "Pakistan Two Wheeler Industry." Retrieved 26/8,2015, from http://defence.pk/threads/pakistan-two-wheeler-industry.31336/.

9. Honda, A. (2014). Annual Report 2014, Atlah honda Ltd. 1st: 103.

http://bikes.qeemat.com/news/http://bikes.qeemat.com/news/http://www.atlashonda.com.pk/http://www.atlashonda.com.pk/http://atlashonda.com.pk/corporate/company/http://atlashonda.com.pk/corporate/company/http://atlashonda.com.pk/corporate/company/http://atlashonda.com.pk/corporate/strategic-goals/http://atlashonda.com.pk/corporate/strategic-goals/http://atlashonda.com.pk/corporate/strategic-goals/http://atlashonda.com.pk/corporate/vision/http://atlashonda.com.pk/corporate/vision/http://atlashonda.com.pk/corporate/vision/http://www.bikez.com/motorcycles/atlas_honda_cbr_150_2015.phphttp://www.bikez.com/motorcycles/atlas_honda_cbr_150_2015.phphttp://defence.pk/threads/pakistan-two-wheeler-industry.31336/http://defence.pk/threads/pakistan-two-wheeler-industry.31336/http://defence.pk/threads/pakistan-two-wheeler-industry.31336/http://defence.pk/threads/pakistan-two-wheeler-industry.31336/http://www.bikez.com/motorcycles/atlas_honda_cbr_150_2015.phphttp://atlashonda.com.pk/corporate/vision/http://atlashonda.com.pk/corporate/strategic-goals/http://atlashonda.com.pk/corporate/company/http://www.atlashonda.com.pk/http://bikes.qeemat.com/news/


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ANNEXURE-A

Internship project presented at Atlas Honda


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Internship Project Atlas Honda LimitedSpare Parts Division

A comparative study of spare parts companies in Pakistan; with specialfocus on RP, CRLF, ISH & HONDA

Dated: 29/07/2015


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Contents………………………………………………………………… Sr. Description

1 Personal Statement

2 Introduction of Project

3 Executive Summary

4 Industrial Review

5 Market Review

6 Consumer Behavior

7 Detailed overview of selected companies

8 Comparative analysis of companies

9 Differences with Atlas HONDA

10 Personal Learning

11 Suggestions


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Personal StatementI am a student of BSBA (Hons.) at Department of Management Sciences,COMSATS Institute of Science and Technology, Lahore Campus. My degreemajors are Marketing and Finance. Before this I did my Intermediate fromGovernment College University, Lahore, through Lahore board of intermediate and

secondary education. Working for Atlas Honda limited as an intern was a wonderfulexperience, I learned a lot from the highly trained and experienced staff of thecompany and they helped me in exploring the practical aspects of the theoreticalknowledge we acquired in our university. Atlas Honda is a wonderful place forthose who want to learn and excel in the professional life, and it feels wonderfulbeing a part of such a well reputed organization.

Introduction of ProjectExecutive SummaryThe current project is intended to explore the 2 wheeler automotive industry inPakistan with special focus on the spare parts sector of the industry. In this projectI explored the spare parts markets in Lahore and identified the market behaviorand studied the market structure. After classifying major market share holders andcompetitors (Atlas Honda, Crown Lifan, Ishiwachi, Road prince), I studied eachcompany, their management practices, did their SWOT analysis and interviewedtheir A class managers.This helped me to do a comparative analysis of all these companies and identifythe gaps to derive conclusions, and to make suggestion to Atlas Honda limited.

Industry:Two Wheeler Industry In PakistanPakistan motorcycle industry is flourishing as it met 95% localization through stateof the art technology implementation, billions of investment and hundredthousands of skilled work forces. In this potential industry, contributors have playedtheir vital role to not only making it able to compensate local demand but also forexporting various models of motorbikes in different countries. Pakistan,motorcycles’ sales stood at 1.44 million units in first 10 months of FY14 accordingto Pakistan Bureau of Statistics (PBS) data.Presently there are 43+ motorcycle assemblers in the country. Out of these, thereare three Japanese assemblers (Honda, Yamaha and Suzuki), while the remaining40+ assemble Chinese motorcycles. These assemblers buy parts, sub-assembliesand assemblies from over 200 large, medium and small vendors located in Karachiand Lahore. It is estimated that the motorcycle industry employs to more than200,000 people directly and indirectly.The motorcycle industry in Pakistan has recorded strong growth over the pastdecade, mainly due to increased urbanization and induction of many new playersin the market who are manufacturing and providing motorbikes at much cheaperprices, but nobody has been able to beat the market leader, Atlas Honda.


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Two Wheeler Spare Parts Industry In PakistanLike the two wheeler vehicle industry in Pakistan, spare parts industry is also aleading industry as it generates a handsome amount of revenue for the automotivemanufacturers as well as local sole part dealers. There are three types of businesspresent in the industry, all having its own perks and privileges. First category is of

those multinational and national organizations who are manufacturing spare partsin Pakistan and is selling in the local market. Second category is of those who areimporting parts and selling in the market, however there is also a third type oforganizations who are both manufacturing locally and are also importing fromoutside countries.Whatever the source of production is the industry of spare parts is highlycompetitive and is currently in its growth stage, while the business in the saidindustry is highly profitable and stable, there are certain factors which threaten thisindustry in the near future. The detail of which will be discussed later in this report.

Market ReviewMarket in spare parts is not much dispersed, major transactions occur in the two

large cities of Pakistan, namely Lahore and Karachi. However different companieshave their production plants, ware houses and regional offices all across thecountry.Main CompetitorsWith a variety of large numbers of local and international brands available inmarkets I was able to identify following four major competitors in the market

1. Atlas Honda (AH)

2. Crown Lifan (CRLF)

3. Ishiwachi (ISH)

4. Road prince (RP)

Major MarketsIn my study I observed three main markets of Lahore city including Macleod Road,Lytton Road and Multan Road, among those I found Macleod road to be main hubor business center of the city in terms of two wheelers spare parts. Upon carefuland detailed study of the market I was able to calculate market presence ofdifferent brands of spare parts.

Market Presence


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Market : Macleod RoadVisit Date: 24/07/2015Total number of shops counted: 174Documented Reference: Pictures of each and every shop was taken.

Brand Number of

Outlets

Market

presenceApproximated

Mix(others) 65 37%

Atlas Honda 42 24%

CRLF 23 13%

Road Prince 15 9%

ISH 5 3%

Yamaha 5 3%

Eagle Eye 4 2.50%

United 4 2.50%

Ravi 3 2%

Kclf 2 1.50%

Suzuki 2 1.50%

Quingqi 1 0.50%RBX 1 0.50%

Sohrab 1 0.50%

Star Lf 1 0.50%

Totals 174 100%

Consumer Behavior


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Customer DemographicsCustomers in spare parts market are rather diverse instead of being close.Following customer demographics can be seen in the market;

Trait Detail

Gender Mostly males gender are the key consumer of the spare

parts, because in Pakistan it is considered that onlymales can ride the two wheeler vehicle.

Age 16years - 60years old

Geographic factor The market for spare parts is spread in all over thePakistan with consumption increasing as you movetowards more populated areas of Pakistan like Punjaband sindh.

Socio Economicfactor

Mostly customer want low priced products but moderateprice parts can also be seen in market .

Psychological Factor The mindset of the customer is more price oriented thenquality conscious, however there is a certain set of

people which are quality conscious as well.

Detailed overview of selected companies:Crown Lifan


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Basic IntroductionLifan Group China made an agreement with Crown-Lifans Group Karachi, planningahead to form a company named CROWN MOTORCYCLE COMPANY in 2003.Now the parts of Crown Lifan are available in each and every corner of Pakistan.These parts have same claimed qualities just like the Japanese parts but in price

wise it is too much cheaper than the Japanese parts. According to the crown Lifan, they are the market leaders and don’t have anycompetitor in market. They have 300 fast moving items. And more than 1000 partsof various brands of motorcycles like SOHRAB,YAMAHA, SUZUKI, HONDA,3Wheelers, Generators and some universal parts as well. With the sale ofuniversal parts on the top chart.Unique Selling PrepositionThe unique selling preposition of CRLF is the Crown Lifan FAMILY, it consists of150 members comprising of dealers, distributors, mechanics, retailers, companyofficials and executives. The members of this family have direct access to the CEOof the company and each and every one of them can contact each other through

this network and they meet at least once in a year.Marketing and Promotional ActivitiesCRLF is busy in some focused and planned marketing and promotional activities.It includes Incentives, shades, mechanics’ uniform, festivals celebrations, coolers,gifts, cakes on birthdays, foreign trips, dealer incentives, etc. In last year CRLFsponsored a group of 250 people to CHINA on a one week vacation and that tripis still very highly discussed and admired among the retailers and distributors inthe mar ket. According to the CRLF’s representative; OTHERS ARE DICTATORS,WE ARE EDUCATORS.SWOT AnalysisThese are the strengths, weaknesses, opportunities and threats listed by the

official of the company.1. Strengths: CRLF Family

2. Weaknesses: Variety short every time

3. Opportunities: Local Production

4. Threat: Govt. Policies

Market Share According to my observation CRLF enjoy 35% market share in terms of sales inmarket.CounterfeitThere is very low proportion of counterfeit of CRLF in market, the company officials

says it is the result of the rapid and strict action of their legal team against anylitigation that evolve in the market.

Distribution ChannelThey distribute and sell their products by the mean of the CRLF family and orderplacing and stock delivery take place from the head office. They have a creditcontrol system of 7-17-21 days.Ishiwachi (ISH)


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Basic IntroductionISH is a parts importing company with their products coming from Malaysia,Taiwan, Vietnam and China. It was established in 2004 and from since it is workingunder the umbrella of the slogan of quality parts and is considered as a quality partsupplier in the market. ISH listed Atlas HONDA as the competitors in the market

as they claim that both the companies are working on quality. Unique Selling PrepositionNo compromise on quality is what the Managing Director said while we interviewedhim and asked him about his company’s USPs. According to him ISH is determinedto provide high quality parts to the customers and for that they are willing to takethe price a bit higher.Marketing and Promotional ActivitiesISH is also doing detailed marketing activities, they are working on mechanics, andthey have these empty boxes schemes which are very popular in the market.SWOT AnalysisThese are the strengths, weaknesses, opportunities and threats listed by the

official of the company.1. Strengths: Quality

2. Weaknesses: Distribution and dealer Network

3. Opportunities: Regions Expansion

4. Threat: Local and low priced Industry

Market ShareISH enjoys 7-8% market share but is increasing day by day.CounterfeitISH is currently having no counterfeit in market, however there are risks in future.Distribution Channel

Super Distributor Distributors RetailersISH deals on 70 % cash and 30 % credit business.

Road PrinceBasic IntroductionOmega Industries came into existence in 1995. Today, It is one of the topmotorcycles & rickshaws manufacturer in Pakistan. They have a team ofprofessionals and our network of sales, service and spare parts is covering almostthe whole country.Road Prince listed Crown Lifan as their competitors as they follow them in theirmarketing and pricing strategies.

Unique Selling PrepositionMechanics Contacts and Reward systemMarketing and Promotional ActivitiesRoad Prince is investing heavily in marketing and promotional activities, they haveCash prizes, gold coin schemes, UMRAH tickets and foreign tours for mechanicsand dealers.SWOT Analysis


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These are the strengths, weaknesses, opportunities and threats listed by theofficial of the company.

1. Strengths: Financial Strength/Credit limit

2. Weaknesses: Stagnant marketing styles and strategies

3. Opportunities: Place to become market leader

4. Threat: Local Industry

Market ShareRoad prince enjoys 9%-10% of market share.CounterfeitRoad Prince have 12-13% counterfeit in market, they have a legal team workingon the only person supplying illegitimate RP products in market, but according tothe GM operations spare parts, the case is taking longer than expected and caseis about to settle.Distribution ChannelMega Distributor -> Distributor -> Sub Distributor -> Retailer

They give their mega distributor a credit of 60 days.

Atlas HondaBasic Introduction

Atlas Honda Limited (AHL) is a joint venture between the Atlas Group and HondaMotor Co. Ltd., Japan. The company was created by the merger of PanjdaryaLimited and Atlas Autos Ltd. in 1988. Both these motorcycle manufacturingconcerns were established by the Atlas Group.

Atlas Honda Limited offers state of the art OEM standard Parts with precision

technology for replacement market of all Honda Models produced indigenously.These spare parts are perfectly coordinated with one another and give safety,reliability and performance of optimum level.

Atlas Honda genuine Oil best suits all types of engines based on Japanesetechnology and is blended and formulated for maximum performance of your bike.Unique Selling PrepositionDealership and Service Network and high quality genuine parts.Marketing and Promotional Activities

Atlas Honda Limited is busy doing direct and indirect marketing and push and pullpromotional schemes, they have discounts for dealers and mechanics, however alack of incentives and gifts as compared to other companies.

SWOT AnalysisThese are the strengths, weaknesses, opportunities and threats listed by theofficial of the company.

1. Strengths: Quality and genuine products

2. Weaknesses: stagnant marketing strategies

3. Opportunities: 3 wheeler and car parts market

4. Threat: Counterfeit and local industry


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Market Share Atlas Honda enjoys the market share of 24-25% in terms of sales in market.CounterfeitThere is approximately 30-35% counterfeit of Atlas Honda in market, accordingtoofficials at atlas Honda they have a legal team to defend the copy rights and

trademarks they have, but the problem seems to prevails.Distribution Channel

Atlas Honda Distribute its products centrally from Karachi office and through theirdealership network mainly and also involving retailers as well.

Price Comparison of major PartsDue to large number of parts and product range offered by companies it is notpossible to compare each and every product, however a glimpse of theircomparison

Internship Report AHL 2015.

Documents

Transcript of Internship Report AHL 2015.