Honda Success Story

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Honda has been the world’s largest motorcycle manufacturer since 1959, reaching a production of 400 million by the end of 2019, as well as the world’s largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year. Honda became the second-largest Japanese automobile manufacturer in 2001. Honda was the eighth largest automobile manufacturer in the world in 2015.

Honda – Company Highlights

• Startup Name-Honda Motor Co., Ltd.
• Headquarters-Minato, Tokyo, Japan
• Industry-Automobile
• Founded-24 September 1948
• Founder-Soichiro Honda
• CEO-Takahiro Hachigo
• Areas Served-Worldwide
• Website-www.global.honda

Honda – About and How it Works?

Honda Motor Co., Ltd. engages in the manufacture and sale of automobiles, motorcycles, and power products. It operates through the following segments: Automobile, Motorcycle, Financial Services, and Power Product and Other Businesses.

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 Guangqi Honda.

Honda – Logo and its Meaning

The stylized design of the capital H had a certain influence on the print. It is distinguished by the absence of decorative details and minimalistic design bordering on austerity. At the same time, chromium coating of the innovated logo’s font makes it quite prestigious and valuable. The line width helps it stand out clearly on the background.

Honda – Founder and History

The engineer Honda Soichiro founded the Honda Technical Research Institute near Hamamatsu in 1946 to develop small, efficient internal-combustion engines.

It was incorporated as Honda Motor Company in 1948 and began producing motorcycles in 1949. The Honda C-100, a small-engine motorcycle, was introduced in 1953 and by 1959 was the largest-selling motorcycle in the world. In 1959 the company also established a U.S. subsidiary, the American Honda Motor Company, which began producing motorcycles in the United States in 1979 and automobiles in 1982.

Honda – Mission

Honda’s mission statement says, “Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction.”

Honda – Business Model

Motorcycle (~14%) – Honda derives $18.4 billion in revenues from the sales of its motorcycle units. This segment includes motorcycles, all-terrain vehicles (ATVs) and Personal watercraft (PWC). We expect higher sales volume of its motorcycle business to drive its top-line growth in 2019. The increased volume sales are expected in its key markets of Asia, including Indonesia, India, and Vietnam. Honda’s Activa and X-blade models continue to be the bestsellers in these markets in 1Q’19.

Power and Other business (~2%) – HMC manufactures and markets a complete range of power equipment products for commercial, rental, and residential applications. Its comprehensive product line, which includes tillers, portable generators, outboard engines, water pumps, lawn mowers, snow throwers, general purpose engines, electric four-wheel scooters, is powered exclusively by advanced 4-stroke engines. These products are sold by the company in its markets, mainly in Japan, and are also sold to Original Equipment Manufacturers (OEM).

Honda – Revenue and Growth

Year Amount Percentage Change from last year

2020 $137.365B -3.94%

2019 $142.998B +3.43%

2018 $138.25B +6.19%

Honda – Investments

Honda Motor has made 12 investments. Their most recent investment was on Jul 18, 2020, when Contemporary Amperex Technology raised CN¥19.7B.

Honda – Acquisition

Honda Motor has just one acquisition. Honda acquired ubitricity on Feb 27, 2019.

Honda – Competitors

Major names among Honda’s competitors include – Ford, General Motors, Toyota, Suzuki, Volkswagen, Hyundai, Nissan, FCA (Fiat Chrysler Automobiles), BMW and Mercedes.

Honda – Challenges Faced

The automobile crisis of 2008-2010 was the part of financial downturn, which affected automobile makers and suppliers around the world. The industry was weakened by the substantial increase in the prices of fuel linked to energy crisis of 2003-08 which discouraged purchases of automobiles with low fuel economy. In the year 2008 there were fewer fuel efficient models to offer to the consumers, the bigger automobiles including General Motors, Toyota, Ford, Chrysler, Nissan and Honda Motors experienced sliding sales.

Honda has used PEST and SWOT analysis to work harder to achieve the goal to make their sales go high, and have worked on the weakness in the market as well. Honda has studied their PEST analysis and the factors that are affecting their company, being the leading automobile industry has to know its strengths and weakness, when dealing with their customer. All they needed was to know their needs, wants and demands.

Honda – Future Plans

Honda is going bullish on its expansion plans. Honda currently holds the number two position in terms of domestic sales, behind Hero MotoCorp, and plans to become number one by December 2020. To achieve this, the company is expanding both, manufacturing and sales. Last year, the company added a fourth assembly line at their Narsapura manufacturing facility in Bengaluru. 

Honda is further accelerating its electrification plans for Europe by moving forward its goal for all of its European mainstream models to feature electrified powertrains by 2022. The bold new target announced during an ‘Electric Vision’ event in Amsterdam, is three years ahead of the previously announced 2025 goal, demonstrating the confidence Honda has in its electric and hybrid powertrain technology. This acceleration will see 6 electrified models launched over the next 36 months.