Honda’s Miseries Due to Absence of its Small Cars in Pakistan

In recent years, Honda has been facing significant challenges in the Pakistani market. Despite its strong brand reputation and loyal customer base, the company has been struggling with poor sales.

Honda struggles for two main reasons: expensive prices and a lineup of obsolete models. Expensive cars like the Civic and HR-V as well as the availability of globally retired models like the 1st gen BR-V and 6th gen City, while the rising cost of living has made affordability a growing concern for the target demographic, leading them to consider alternative options.

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If we look at the PAMA data, Honda sold just 700 units (combined) of Civic and City during the first 2 months of this fiscal year compared to the already dented figure of 3,844 units in FY22. This is an 82% decline in sales which is horrible, to say the least. Similarly, sales of BR-V and HR-V (combined) stood at just 468 units in the first two months of FY23.

Honda Civic

Honda sales clocked at 44,234 units in FY2018-19, however, in FY19-20 the sales were cut down to just 16,387 units (comprising 3 locally assembled models). In the recently concluded FY22-23, Honda again managed to sell just 16,879 units (comprising 4 locally assembled models), far from its glory days of above 40k units a year.

In the tougher economic conditions, the only car that’s doing rather well in Pakistan is the Suzuki Alto 660cc. Because of its smaller & practical size, and impressive fuel economy, and despite receiving multiple price revisions, it is the least expensive mass-produced car available in the market. As fuel prices continue to escalate, Pakistani consumers are increasingly prioritizing fuel efficiency. And with shrinking purchase power due to economic challenges, even entry-level sedan buyers are drifting towards fuel-efficient hatchbacks.

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The Honda Brio hatchback is yet to be offered in Pakistan

Honda’s lack of smaller, fuel-efficient models is a missed opportunity for the company to tap into this growing demand. Models like Brio and N-One, which are already successful in other regions, could provide Honda with a competitive advantage and attract a larger consumer base. By filling the void in Honda’s local portfolio, these models can actively compete against rivals (mainly Suzuki) in the small car segment and regain customer interest. The potential benefits of such additions include an expanded customer base and a stronger market presence.

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The 660cc Honda N-One can compete against the Pak Suzuki Alto

To overcome the challenges faced in the Pakistani market, Honda must consider several strategies. Firstly, reevaluating their pricing strategies to align with market expectations and competitors’ offerings can increase affordability and attract potential buyers. Secondly, updating the lineup with smaller and fuel-efficient models like Brio and N-One will enable Honda to address the evolving demands of Pakistani consumers and regain its competitive edge.

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By acknowledging and addressing these challenges, Honda can turn the tide and regain its market share. Understanding the importance of affordability, adhering to modern trends, and introducing suitable models are crucial steps toward securing a stronger position in Pakistan’s automotive market. What is your opinion regarding the launch of smaller cars by Honda in Pakistan, let us know with your comments.

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