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Summary of Honda CEO speech on business direction

Honda has been working on two top-priority management challenges in the midst of abrupt changes in the global business environment surrounding the automobile industry

Honda has been working on two top-priority management challenges in the midst of abrupt changes in the global business environment surrounding the automobile industry: to strengthen the structure of our automobile business and to further increase the speed of business transformation for future generations.

So, today, I would like to introduce some initiatives we are taking for our automobile business, especially how we are strengthening the structure of our automobile business, the direction we are taking with electrification, as well as some progress we have made to date.

Strengthening automobile business structure

Ever since I became the president of the company, I have been conveying the message that we will make Honda strong by creating strong products and also by strengthening our inter-regional coordination and collaboration. We put special emphasis on the strengthening of our global models, which have been the source of Honda’s core competence, and also the enhancement of our regional models.

As a result, we currently have the five global models, namely Civic, Accord, CR-V, Fit/Jazz and Vezel/HR-V, and these five strong models now account for 60% of our global automobile sales. At the same time, our regional models such as the N Series for Japan, Pilot for North America and Crider for China are playing an important role as a source of growth for each respective region.

However, as a result of accommodating regional needs somewhat excessively in each individual region, we recognize that the number of models and variations at the trim and option level have increased and our efficiency has declined.

So, we will undertake initiatives to further strengthen our inter-regional coordination and collaboration and evolution of vehicle development in order to simultaneously increase the attractiveness and efficiency of both global and regional models.

Strengthening inter-regional coordination and collaboration

As for inter-regional coordination and collaboration, under the new operational structure we adopted for our automobile operations starting from April, we began reviewing and sharing the product lineup by grouping some of our six regions outside Japan based on a similarity of key factors, such as market needs and environmental regulations. With this initiative, by 2025, we will reduce the total number of variations at the trim and option level for our global models to one-third of what we have now. In addition, we will increase efficiency by eliminating and consolidating some similar regional models into even more competent models shared across multiple regions.

Evolution of vehicle development

As for the advancement of automobile development, since I became the president, we have been increasing the efficiency and speed of our art of making things by innovating the entire process, from planning and development all the way through production, by enabling the S-E-D-B (sales, manufacturing, R&D, purchasing*1) functions to collaborate beyond the boundaries of their divisions.

Moreover, we have already introduced the Honda Architecture in our development.
The Honda Architecture is a company-wide initiative which will increase the efficiency of development and expand parts-sharing for our mass-production models. The first model being developed with this new method will be the global model we are launching next year. And we will continue increasing the number of models to which we apply this new architecture.

With the strengthening of global and regional models through inter-regional coordination and collaboration and with the introduction of the Honda Architecture, by 2025, we will reduce the number of manhours we use for the development of mass-production models by 30%, and we will repurpose those manhours to accelerate our research and development in advanced areas for the future. In this way, we can continue creating new technologies which will support the future of Honda.

Please click here to view the full press release.

SOURCE: Honda

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