Honda

Honda became the second-largest Japanese automobile manufacturer in 2001. Honda was the eighth largest automobile manufacturer in the world in 2015.

Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda also manufactures garden equipment, marine engines, personal watercraft and power generators, and other products. Since 1986, Honda has been involved with artificial intelligence/robotics research and released their ASIMO robot in 2000. They have also ventured into aerospace with the establishment of GE Honda Aero Engines in 2004 and the Honda HA-420 HondaJet, which began production in 2012. Honda has three joint-ventures in China: Honda China, Dongfeng Honda, and Gianggi Honda.

In 2013, Honda invested about 5.7% (US$6.8 billion) of its revenues in research and development. Also in 2013, Honda became the first Japanese automaker to be a net exporter from the United States, exporting 108,705 Honda and Acura models, while importing only 88,357.

History

Honda also aided the war effort by assisting other companies in automating the production of military aircraft propellers. The relationships Honda cultivated with personnel at Toyota, Nakajima Aircraft Company and the Imperial Japanese Navy would be instrumental in the postwar period. A US B-29 bomber attack destroyed Tōkai Seiki's Yamashita plant in 1944, and the Itawa plant collapsed on 13 January 1945 Mikawa Earthquake. Soichiro Honda sold the salvageable remains of the company to Toyota after the war for ¥450,000 and used the proceeds to found the Honda Technical Research Institute in October 1946.

With a staff of 12 men working in a 16 m² (170 sq ft) shack, they built and sold improvised motorized bicycles, using a supply of 500 two-stroke 50 cc Tohatsu war surplus radio generator engines. When the engines ran out, Honda began building their own copy of the Tohatsu engine, and supplying these to customers to attach to their bicycles. This was the Honda A-Type, nicknamed the Bata Bata for the sound the engine made.^[11] In 1949, the Honda Technical Research Institute was liquidated for ¥1,000,000, or about US$5,000 today; these funds were used to incorporate Honda Motor Co., Ltd. At about the same time Honda hired engineer Kihachiro Kawashima, and Takeo Fujisawa who provided indispensable business and marketing expertise to complement Soichiro Honda's technical bent. The close partnership between Soichiro Honda and Fujisawa lasted until they stepped down together in October 1973.

The first complete motorcycle, with both the frame and engine made by Honda, was the 1949 D-Type, the first Honda to go by the name Dream. In 1961, Honda achieved its first Grand Prix victories and World Championships in 125cc and 250cc. Honda Motor Company grew in a short time to become the world's largest manufacturer of motorcycles by 1964.

CEO Tadashi Kume was succeeded by Nobuhiko Kawamoto in 1990. Kawamoto was selected over Shoichiro Irimajiri, who oversaw the successful establishment of Honda of America Manufacturing, Inc. in Marysville, Ohio.. Irimajiri and Kawamoto shared a friendly rivalry within Honda; owing to health issues, Irimajiri would resign in 1992.

Following the death of Soichiro Honda and the departure of Irimajiri, Honda found itself quickly being outpaced in product development by other Japanese automakers and was caught off-guard by the truck and sport utility vehicle boom of the 1990s, all which took a toll on the profitability of the company. Japanese media reported in 1992 and 1993 that Honda was at serious risk of an unwanted and hostile takeover by Mitsubishi Motors, which at the time was a larger automaker by volume and was flush with profits from its successful Pajero and Diamante models.

Kawamoto acted quickly to change Honda's corporate culture, rushing through market-driven product development that resulted in recreational vehicles such as the first-generation Odyssey and the CR-V, and a refocusing away from some of the numerous sedans and coupes that were popular with the company's engineers but not with the buying public. The most shocking change to Honda came when Kawamoto ended the company's succesfull participation in Formula One after the 1992 season, citing costs in light of the takeover threat from Mitsubishi as well as the desire to create a more environmentally friendly company image.

Motorcycles

Honda is the largest motorcycle manufacturer in Japan and has been since it started production in 1955.^[11] At its peak in 1982, Honda manufactured almost three million motorcycles annually. By 2006 this figure had reduced to around 550,000 but was still higher than its three domestic competitors.

In 2017, India became the largest motorcycle market of Honda. In India, Honda is leading in the scooters segment, with 59 percent market share.

During the 1960s, when it was a small manufacturer, Honda broke out of the Japanese motorcycle market and began exporting to the U.S. Working with the advertising agency Grey Advertising, Honda created an innovative marketing campaign, using the slogan "You meet the nicest people on a Honda." In contrast to the prevailing negative stereotypes of motorcyclists in America as tough, antisocial rebels, this campaign suggested that Honda motorcycles were made for the everyman. The campaign was hugely successful; the ads ran for three years, and by the end of 1963 alone, Honda had sold 90,000 motorcycles.

Taking Honda's story as an archetype of the smaller manufacturer entering a new market already occupied by highly dominant competitors, the story of their market entry, and their subsequent huge success in the U.S. and around the world has been the subject of some academic controversy. Competing explanations have been advanced to explain Honda's strategy and the reasons for their success.

The first of these explanations was put forward when, in 1975, Boston Consulting Group (BCG) was commissioned by the UK government to write a report explaining why and how the British motorcycle industry had been out-competed by its Japanese competitors. The report concluded that the Japanese firms, including Honda, had sought a very high scale of production (they had made a large number of motorbikes) in order to benefit from economies of scale and learning curve effects. It blamed the decline of the British motorcycle industry on the failure of British managers to invest enough in their businesses to profit from economies of scale and scope.

The most recent school of thought on Honda's strategy was put forward by Gary Hamell and C.K. Prahalad in 1989. Creating the concept of core competencies with Honda as an example, they argued that Honda's success was due to its focus on leadership in the technology of internal combustion engines. For example, the high power-to-weight ratio engines Honda produced for its racing bikes provided technology and expertise which was transferable into mopeds. Honda's entry into the U.S. motorcycle market during the 1960s is used as a case study for teaching introductory strategy at business school worldwide.^[51]