Honda drafts Vision 2030 to take on mobility challenges

Honda has set in place a blueprint for Vision 2030 as part of an aggressive growth plan for the future, said President & CEO, Takahiro Hachigo, at a presentation in Tokyo last week.

Within this vision statement are a host of components that go into defining the very core of Honda and how it proposes to evolve further and meet future challenges. As Hachigo reiterated, the ‘universal passion and strengths’ of the company are the two key elements of Vision 2030.

Here, value proposition in offering products and services that expand people’s dreams and potential form reflect Honda’s passion as well as taking on new challenges “while being driven by a strong passion to realise our value proposition”.

As for its strengths, said Hachigo, the Japanese automaker can make a broad range of products right from motorcycles and cars to power products. These traits have attracted nearly 30 million customers annually across markets around the world.

In addition, the company’s new strengths lie in its ability to create solutions, which include both Mono-zukuri (the art of making things), and Koto-zukuri (creating new experiences through brand storytelling). “Through this integration of further advanced Mono-zukuri and Koto-zukuri , we will continue creating the strengths of Honda,” said Hachigo.

Two areas where Honda proposes to create value are in advancement of mobility and value creation for people’s daily lives. This is another element of Vision 2030 where the idea is to bring the universal passion of Honda to “serve people worldwide with the joy of expanding their life’s potential”.

As Hachigo reiterated, it is towards this end that Honda will lead the advancement of mobility and enable people everywhere in the world “to improve their daily lives”. Hence, going forward, the company will focus on three areas: mobility, robotics (with a focus on artificial intelligence or AI), and energy solutions to usher in the freedom of mobility and the “joy of making lives better”.

This will get a further push by offering products and services that are optimised based on Honda’s desire to “utilise technology to help people, while putting them at the core”. Environment and safety are other focus areas where the objective is to become a company that leads the effort to realise a “carbon-free and collision-free society”.

Clearly, each of these goals will require a complete overhaul of the existing business and this was also articulated by Hachigo in the Tokyo presentation. As he put it, “We will transform and evolve our existing businesses and also create new value through efficient use of finite corporate resources.”

This, in turn, has led to identification of three new areas around, which the business foundation will be strengthened. The first of these is inter-regional coordination and collaboration, which will be further enhanced to increase efficiency of operations from a global perspective.

“Towards this end, we will grow our global models strongly so that they will be well received anywhere in the world,” said Hachigo. As for regional models, multiple regions with similar customer needs will work together to realise this goal “with a high level of product strength”. The ultimate objective is achieve more efficient business operations in each region.

The other priority component of Vision 2030 is to be proactive in getting into open innovation with external partners/third parties. Hachigo drove home the point that Honda’s strengths have traditionally been its competitive edge in technology and products centering around the powertrain and packaging. These include internal combustion engines as well as more recent electrified vehicles. These core technologies can now get a fillip through strong partnerships with customer worldwide from the perspective of both Mono-zukuri and Koto-zukuri .

The next step in Vision 2030 is to strengthen the business foundation and ensure sustainable operations, especially in the automobile business. Honda is at present moving forward with a project that will significantly advance its development system and capability.

The ‘SED development system’ in the automobile business is one of its strengths where teams from R&D, production and sales work as one and form a project team to pursue product development. “We will further advance this development system and introduce a new development process for Honda’s art of making automobiles, which will enable us to more efficiently create both products and services that appeal to people’s emotions,” said Hachigo.

As the first step in this initiative, a new planning division was created within Honda R&D last year to ensure that all products featured ‘perceived quality,’ which is not easy to quantify. In order to ensure that all car models consistently offer such perceived value, the Japanese automaker is considering introduction of modular strategies that include sharing of parts and units.

Additionally, said Hachigo, Honda will also establish and automobile cost planning division that will be in charge of “comprehensive cost reduction” by working closely among the divisions of R&D, purchasing and production while strengthening its capability in the area of cost planning.

“Through these activities, we will aim for creating attractive automobiles and achieving comprehensive cost reduction,” said Hachigo. We will begin applying these initiatives starting from automobiles scheduled to go on sale in 2019.”

It will be interesting to see how India will feature in Honda’s Vision 2030 drive. The fact that there will be greater inter-regional coordination augurs well especially when there are competencies to be offered on costing and quality. The WR-V, a regional model developed mainly by the Honda R&D centre in Brazil, is produced and sold in India as well. Going forward, there could be more such initiatives.

Where Honda needs a quick turnaround is in its car business where the growth story has been quite tepid in sharp contrast to its two-wheelers that have been growing from strength to strength. Perhaps, Vision 2030 could change things dramatically for Honda Cars India and give it the fillip that it needs at this point in time.

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