Takanobu Ito believes the ‘Lehman Shock’ of 2008 has dramatically changed the mindset of his company’s customers.
The President & CEO of Honda Motor Company, in his annual message to shareholders, says these changes have further increased the importance of enhancing global competitiveness. Yet, it has also helped proactively focus on identifying and fulfilling the needs of customers. “We believe that true globalisation of our business means doing these two things simultaneously,” Ito says.
Eye on competitionFrom Honda’s point of view, it is imperative for each of its business operations to build and maintain a “highly competitive and robust structure” . This means that these operations must have a complete understanding of their environment and make quick decisions.
“We will advance our corporate structure and accelerate our initiative to create the most appropriate products for customers in each field of business and geographic region,” Ito says. The idea is to make Honda products the top choice for customers globally.
In two-wheelers , the company wants to improve fuel economy of scooter models and reduce manufacturing costs by sharing common components. “We believe it is critical for us to be creative and take on new challenges,” Ito says. As part of a new organisational structure, the company also plans to strengthen development of 250-400cc motorcycles with an eye on emerging markets. In cars, Honda has realised the benefits of a cost-competitive production system combined with an efficient global parts sourcing structure. “Going forward, we will increase our competitive strengths in small-sized vehicles by renovating every aspect of production,” Ito says.
Thinking locallyIn addition, the company is promoting a regional production approach which fuses together development, production and purchasing in each region. This has helped make models like the Amaze in India a reality.
Fitted with the 1.5-litre i-DTEC diesel engine, the car has been doing brisk business. “We expect new growth opportunities for Honda with this highly competitive diesel powertrain in India,” Ito notes.
Likewise, the Mobilio, which was recently launched here, is already a big hit in Indonesia as a multipurpose vehicle. As in the case of the Amaze for India, Honda carried out a thorough survey for the Mobilio to understand local needs in Indonesia. The next step was to realise affordable prices through higher localisation.
According to Ito, the company has advanced its product development capability beyond what it could possibly do under the traditional development system. The focus was traditionally on major markets in advanced nations.
“The new approach enables us to deliver products that accommodate the needs of our customers in each region and further increases the growth potential of our automobile business,” the Honda chief says.