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Honda

 
Honda Motor Co., Ltd.
 
Type Public TYO: 7267
Founded September 24, 1948
Location Tokyo, Japan
Key people Soichiro Honda, Founder
Takeo Fukui, CEO
Industry Automobile & Truck manufacturer
Products automobiles, trucks, motorcycles, scooters, ATVs, electrical generators, robotics, marine equipment, and lawn and garden equipment
Revenue image:green up.png$79.222 billion USD (2004)
Operating income {{{operating_income}}}
Net income {{{net_income}}}
Employees 131,600
Website www.honda.com
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Honda Motor Co., Ltd. (本田技研工業株式会社 Honda Giken Kōgyō Kabushiki Kaisha) TYO: 7267 (NYSE: HMC), is a Japanese manufacturer of automobiles, trucks, motorcycles, and scooters. They also make ATVs, water craft, electrical generators, marine engines, and lawn and garden equipment. With more than 14 million internal combustion engines built each year, Honda is the largest engine-maker in the world. In 2004, the company began to produce diesel motors, which were both very quiet whilst not requiring particulate filters to pass pollution standards. Honda's high-end line of cars are branded Acura in North America. Many Japanese automakers have well-earned reputations for dependability and longevity, with production being well quality-controlled. Honda automobiles are well known around the world to be very reliable, with many Hondas going through their lives without needing a single major repair, and many people believe that these cars last "forever" because after 20 years, their [Honda] cars are still running. It is arguable, however, that the foundation of Honda's success is the motorcycle division, for which the name is still probably the best known.

Honda is headquartered in Tokyo. Their shares trade on the Tokyo Stock Exchange, the New York Stock Exchange, as well as exchanges in Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland. American Honda Motor Co., is based in Torrance, CA. Honda Canada is based in Toronto, Ontario.

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Company history

 

Soichiro Honda began by manufacturing piston rings in November 1937. He quickly became a sub-contractor to Toyota, and then expanded into other engine parts.

On September 24, 1948 the Honda Motor Co. was founded. Soichiro Honda took advantage of a gap in the Japanese market that was Decimated by World War II, Japan was starved of money and fuel, but still in need of basic transport. Honda, utilizing his manufacturing facilities, attached an engine to a bicycle, creating the cheap and efficient transport that was required.

The Honda piston manufacturing facilities were almost completely destroyed. Soichiro Honda created a new company with what he had left, giving it the unusual name of "Honda Giken Kōgyō Kabushiki Kaisha" which translates to "Honda Research Institute Co. Ltd." Despite its grandiose name, the first facility bearing that name was a simple wooden shack where Mr. Honda and associates would fit engines to bicycles. Interestingly, the official Japanese name for Honda Motor Co. Ltd. remains the same, in honor of Soichiro Honda's efforts.

Honda quickly began to produce a range of scooters and motorcycles and Soichiro Honda quickly recovered from the losses incurred during the war. By the late 1960s, Honda had conquered most world markets. The British were especially slow to respond to the Honda introduction of electric starters to motorcycles. By the 1970s, Honda was the largest producer of motorcycles in the world, a title it has never relinquished.

Honda began producing road cars in 1960, mostly intended for the Japanese market. Though participating in international motorsport (see Racing), Honda was having difficulty selling its automobiles in the United States. Built for Japanese buyers, Honda's small cars had failed to gain the interest of American buyers.

Honda finally established a foothold in the American market in 1972 with the introduction of the Civic—larger than their previous models, but still small compared to the typical American car—just as the 1970s energy crisis was impacting worldwide economies. New emissions laws in the US, requiring American car makers to affix expensive catalytic converters to exhaust systems, noticeably increased sticker prices. However, Honda's introduction of the 1975 Civic CVCC, CVCC being a variation on the stratified charge engine, allowed the Civic to pass emissions tests without a catalytic converter.

In 1976, the Accord was immediately popular because of its economy and fun-to-drive nature; Honda had found its niche in the United States. In 1982, Honda was the first Japanese car manufacturer to build car plants in the US, starting with an Accord plant in Marysville, Ohio. They now have plants in Marysville, Anna, and East Liberty, as well as in Lincoln, Alabama (Honda Manufacturing of Alabama), and Timmonsville, South Carolina, and plan to open a new plant in Tallapoosa, Georgia. Honda's North American and U.S. headquarters are located in Torrance, California. Honda's Canadian and many US-market Civics are manufactured in their plant in Alliston, Ontario since 1985.

Honda was also the first Japanese automaker to introduce a separate luxury line of vehicles. Created in 1986 and known as Acura, the line is made up of modified versions of Honda vehicles usually with more power and sportiness than their Honda counterparts.

1989 saw a move that was set to revolutionalize the way carmakers tuned their engines. Honda launched their VTEC variable valve timing system in its production car engines, which gave improved efficiency and performance across a broader range of engine speeds. One of the first of its kind in passenger vehicles, it worked on the premise of tuning one engine to operate at two different 'settings' depending on load. Normal driving would use a "shorter" cam lobe that resulted in more efficient operation. A more aggressive, longer duration, cam engages when engine RPM reaches a set point resulting in more power during hard acceleration. The driver gets the best of both worlds; high efficiency and high power on demand. Many automakers have introduced their own versions of variable valve timing. The technology is now standard across the whole Honda range.

For the 2007 model year, Honda plans to improve the safety of its vehicles by providing front-seat side airbags, side-curtain airbags, and anti-lock brakes as standard equipment in all automobiles available in North America (except the Insight, S2000, and Acura NSX, which will not have side-curtain airbags). By 2006, Honda plans to have as standard equipment Vehicle Safety Assist and rollover sensors in all light trucks, including the CR-V, Odyssey, and Acura MDX. Honda also plans to make its vehicles safer for pedestrians, with more safely-designed hoods, hinges, frame constructs, and breakaway wiper pivots.

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Racing history

See also Honda F1

Soichiro Honda, being a race driver himself, could not stay out of international motorsport. In 1959, Honda entered five motorcycles into the Isle of Man TT race, the most prestigious motorcycle race in the world. While always having good power, it took until 1961 for Honda to tune their chassis well enough to allow Mike Hailwood to claim their first race victories in the 125 and 250 cc classes. Hailwood would later pick up their first senior TT win in 1966.

In 1968, Jo Schlesser was killed in a Honda RA302 at the French Grand Prix. This racing tragedy, coupled with their commercial difficulties selling automobiles in the United States, prompted Honda to withdraw from all international motorsport that year.

In 2003, Honda became an engine supplier to the Indy Racing League. In 2004, Honda-powered cars won 14 of 16 IRL events, including the Indianapolis 500, and claimed the IRL Manufacturers' Championship, Drivers' Championship and Rookie of the Year titles.

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Honda's strategy

During the 1960s, when it was a small manufacturer, Honda broke out of the Japanese motorcycle market and began exporting to the US. 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 US 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 second story is told in 1984 by Richard Pascale, who had interviewed the Honda executives responsible for the firm’s entry into the US market. As opposed to the tightly focused strategy of low cost and high scale that BCG accredited to Honda, Pascale found that their entry into the US market was a story of “miscalculation, serendipity, and organizational learning” – in other words, Honda’s success was due to the adaptability (and hard work) of its staff, rather than any tightly formed, long term strategy. For example, Honda’s initial plan on entering the US was to compete in large motorcycles, around 300cc. It was only when the team found that the scooters they were using to get themselves around their US base of San Francisco attracted positive interest from consumers that they came up with the idea of selling the Supercub.

The most recent school of thought on Honda’s strategy was put forward by Gary Hamel 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 US motorcycle market during the 1960s is used as a case study for teaching introductory strategy at many business schools worldwide.

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Robots

Past Robots E0 E0 (1986) Honda E1 E1 (1987 - 1991) E2 (1987 - 1991) E3 (1987 - 1991) E4 (1991 - 1993) E5 (1991 - 1993) E6 (1991 - 1993) P1 (1993 - 1993) P2 (1993 - 1993) P3 (1993 - 1993) ASIMO (2000 - Today)

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See also

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External links