KARACHI - Honda Atlas Cars Pakistan Limited, the second biggest car assemblers in 1300cc (cubic centimeters) car segment, has been suffering huge losses for the last 7 quarters (Sep 2008) mainly due to negative margins and higher cost of production. Despite few major car assemblers who have started to show profits amid sharp recovery in car sales, the company posted record losses of Rs852 million (loss per share of Rs5.97) during the year ended March 2010 as against loss per share of Rs2.8 last year. However, the bottom-line of the company is expected to improve to some extent in the months to come on account of availing short-term financing from the commercial banks to meet its working capital requirements. According to a Report, released by Topline Reserach recently, the company, having 10 per cent market share in total car sales, did not witness any change in volumetric sales this year when compared to previous year. In terms of volumetric sales 12,305 units sold in Apr-Mar 2010 versus 12,345 units in the same period last year. Topeline report, while quoting Companys financial accounts said Atlas Hondas sales revenue increased by 12 per cent to 15.8 billion, cost of production increased by 15 per cent which turned gross margins to negative 1.5 per cent during April-March 2010, compared with gross margin of 1.2 per cent a year earlier. Besides, gross losses, increase in financial expenses by 104 per cent to Rs455 million also affected bottom-line of the company. With continued losses from last year, the company availed short-term and long-term loans of Rs1.3 billion. By the end of March 2010 the company was able to retire short term borrowings of the banks. Topeline Report disclosed that the Company incurred capex of Rs1.9 billion for the launch of new model (Sedan) which was mainly financed through long-term financing. Thus with no growth in volumetric sales yet, higher depreciation cost and financial expenses would be the key factors in determining overall profitability of the company. Interestingly, the growing car demand (up 39pc in 11MFY10), have allowed car assemblers to pass on any abnormal increase in cost to customers. However, it is believed that the Companys pricing would be dependent upon larger players like Indus Motors in 1300cc segment, Report predicted.