Atlas Honda Limited (ATLH), a leading local motorcycle manufacturer, is poised to embark on an exciting new venture as it eyes the promising markets of Iran and Iraq. With an ambitious target of $25 million in exports for MY24, the company plans to expand its reach and penetrate these potential markets. In a recent corporate brief session, Atlas Honda revealed its plans to cater to the growing demand for motorcycles in the region, aiming to make a significant impact on its financial performance.
Steadfast Performance in MY24:
Despite facing challenges in the market, Atlas Honda showcased commendable performance in MY24. The company reported selling 1.1 million units, only slightly lower than the 1.3 million units sold the previous year. For MY24, Atlas Honda sets a target to sell around 1 million units, with the industry volume projected to range between 1.3 to 1.5 million units.
Market Dynamics and Domestic Demand:
During the briefing session, the company's management highlighted the prevailing demand patterns. Two-thirds of the demand, which primarily comes from rural customers and remittance recipients, remains stable. However, urban demand has been affected by inflationary pressures, resulting in some challenges for the motorcycle market in the region.
Localization and Raw Materials:
Atlas Honda demonstrated its commitment to localization efforts, with prominent bikes like CD70 reaching an impressive 94.4% localization, while CG125 and Pridor stand at 92% and 84.3%, respectively. The company also assured investors that it faces no hindrances in importing raw materials, maintaining a stock that can last up to 4 months. This strategic approach ensures stable production and supply despite potential fluctuations in the global supply chain.
Chinese Bike Makers' Exodus:
One notable development in the industry is the departure of 80% of Chinese bike makers, primarily driven by the prevailing economic challenges and import embargoes. Atlas Honda's resilience and ability to weather these challenges have set it apart as a reliable and established player in the market.
Electric Bikes: A Future Journey:
Addressing the topic of electric bikes, the company acknowledges the growing interest in these environmentally friendly alternatives. However, the widespread adoption of electric bikes may take several years, primarily due to the global shortage of lithium, a critical component in electric vehicle batteries. While the company recognizes the potential of electric bikes, it continues to focus on its conventional offerings to meet current market demands.
Venturing into Iran and Iraq:
The announcement of Atlas Honda's plans to export its bikes to Iran and Iraq comes as a strategic move to explore new markets with significant growth potential. Industry analysts view both Iran and Iraq as promising markets for Atlas Honda, as the company has already established a presence in these regions. Leveraging its brand reputation and proven product quality, Atlas Honda aims to make a strong impact in these territories, contributing to its targeted $25 million in exports for MY24.
Atlas Honda Limited's decision to expand its export footprint to Iran and Iraq signifies a bold step towards growth and diversification. As the company continues to excel in localization, secure raw materials, and maintain steady performance, it stands well-positioned to capitalize on the opportunities presented by these potential markets. As Atlas Honda embarks on this new chapter, the journey promises to be an exciting one, forging lasting partnerships and driving the motorcycle industry forward in the region.