ASSIGNMENT

OF
Research
Methodology

Submitted To: - Submitted By:-

Ms. Sonia Gupta Khalid Akbar

BBA-IV (42)
 Honda Motor Company, Ltd. is a Japanese multinational corporation primarily
known as a manufacturer of automobiles and motorcycles.

Honda has been the world's largest motorcycle manufacturer since 1959, 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 surpassed
Nissan in 2001 to become the second-largest Japanese automobile manufacturer. As of
August 2008, Honda surpassed Chrysler as the fourth largest automobile manufacturer in
the United States. Honda is the sixth largest automobile manufacturer in the world.

Honda was the first Japanese automobile manufacturer to release a dedicated luxury
brand, Acura, in 1986. Aside from their core automobile and motorcycle businesses, Honda
also manufactures garden equipment, marine engines, personal watercraft and power
generators, amongst others. 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 Honda Jet, scheduled to be released in 2011. Honda spends about 5% of its
revenues into R&D.

HISTORY:-

From a young age, Honda's founder, Soichiro Honda had a great interest in
automobiles. He worked as a mechanic at a Japanese tuning shop, Art Shokai, where he
tuned cars and entered them in races. A self-taught engineer, he later worked on a piston
design which he hoped to sell to Toyota. The first drafts of his design were rejected, and
Soichiro worked painstakingly to perfect the design, even going back to school and pawning
his wife's jewelry for collateral. Eventually, he won a contract with Toyota and built a factory
to construct pistons for them, which was destroyed in an earthquake. Due to a gasoline
shortage during World War II, Honda was unable to use his car, and his novel idea of
attaching a small engine to his bicycle attracted much curiosity. He then established the
Honda Technical Research Institute in Hamamatsu, Japan, to develop and produce small 2-
cycle motorbike engines. Calling upon 18,000 bicycle shop owners across Japan to take part
in revitalizing a nation torn apart by war, Soichiro received enough capital to engineer his
first motorcycle, the Honda Cub. This marked the beginning of Honda Motor Company,
which would grow a short time later to be the world's largest manufacturer of motorcycles
by 1964.
 The first production automobile from Honda was the T360 mini pick-up truck, which
went on sale in August 1963. Powered by a small 356 cc straight-4 gasoline engine, it was
classified under the cheaper Kei car tax bracket.[citation needed] The first production car
from Honda was the S500 sports car, which followed the T360 into production in October
1963. Its chain driven rear wheels point to Honda's motorcycle origins.

Corporate profile and divisions:-

Honda is headquartered in Minato, Tokyo, Japan. Their shares trade on the Tokyo
Stock Exchange and the New York Stock Exchange, as well as exchanges in Osaka, Nagoya,
Sapporo, Kyoto, Fukuoka, London, Paris and Switzerland.

The company has assembly plants around the globe. These plants are located in
China, the United States, Pakistan, Canada, England, Japan, Belgium, Brazil, New Zealand,
Indonesia, India, Thailand, Turkey and Perú. As of July 2010, 89 percent of Honda and Acura
vehicles sold in the United States were built in North American plants, up from 82.2 percent
a year earlier. This shields profits from the yen’s advance to a 15-year high against the
dollar.

Honda's Net Sales and Other Operating Revenue by Geographical Regions in 2007

Geographic Region Total revenue (in millions of ¥)

Japan 1,681,190

North America 5,980,876

Europe 1,236,757

Asia 1,283,154

Others 905,163

¥: Japanese yen
 American Honda Motor Company is based in Torrance, California. Honda Canada
Inc. is headquartered in the Scarborough district of Toronto, Ontario, and is building new
corporate headquarters in Markham, Ontario, scheduled to relocate in 2008; their
manufacturing division, Honda of Canada Manufacturing, is based in Alliston, Ontario.
Honda has also created joint ventures around the world, such as Honda Siel Cars and Hero
Honda Motorcycles in India, Guangzhou Honda and Dongfeng Honda in China, and Honda
Atlas in Pakistan.

Current market position:-

With high fuel prices and a weak U.S. economy in June 2008, Honda reported a 1%
sales increase while its rivals, including the Detroit Big Three and Toyota, have reported
double-digit losses. Honda's sales were up almost 20 percent from the same month last
year. The Civic and the Accord were in the top five list of sales. Analysts have attributed this
to two main factors. First, Honda's product line-up consists of mostly small to mid-size,
highly fuel-efficient vehicles. Secondly, over the last ten years, Honda has designed its
factories to be flexible, in that they can be easily retooled to produce any Honda model that
may be in-demand at the moment.

Nonetheless, Honda, Nissan, and Toyota, were still not immune to the global
financial crisis of 2008, as these companies reduced their profitability forecasts. The
economic crisis has been spreading to other important players in the vehicle related
industries as well. In November 2009 the Nihon Keizai Shinbun reported that Honda Motor
exports have fallen 64.1%.

At the 2008 Beijing Auto Show, Honda presented the Li Nian ("concept" or "idea") 5-
door hatchback and announced that they were looking to develop an entry-level brand
exclusively for the Chinese market similar to Toyota's Scion brand in the USA. The brand
would be developed by a 50-50 joint-venture established in 2007 with Guangzhou
Automobile Industry Group.

Current News:- Honda's U.S. retail market share tops Toyota

SAN FRANCISCO (Market Watch) -- Honda has taken advantage of Toyota's

recall nightmare in recent weeks to emerge as the top selling brand in the U.S.
in terms of retail sales, according to a survey published on Friday.
As of Feb. 15, Honda's market share jumped to 13%, excluding corporate and
rental car sales, while Toyota's fell to 12.1% from 17.5% about a month earlier.

The only other decliner among the top nine brands was Chevrolet, General
Motors' top brand, which saw its share dwindle just fractionally to 10% over
the period from mid-January to mid-February.

Smith International shares rallied more than 14% Friday, pacing

gains on the Philadelphia Oil Service Index on a day when most energy stocks
are in the red. Schlumberger is reportedly in advanced talks to buy the oil-
services company.

Both Nissan (NSANY 21.10, -0.08, -0.38%) and Hyundai added almost one
percentage point.

Toyota President Akio Toyoda will face the U.S. government next week,
changing course after his initial reluctance to confront the apparent safety
issues that have led to millions of recalls, including some of the company's best
sellers.

U.S. Transportation Secretary Ray LaHood said publicly that the Japanese
auto giant was "a little safety deaf" as problems with various models surfaced.

Toyota shares were mostly flat on Friday but are still down almost 13% at
$73.50 since the beginning of the year.

Leadership:-
1948–1973 Soichiro Honda

1973–1983 Kiyoshi Kawashima

1983–1990 Tadashi Kume

1990–1998 Nobuhiko Kawamoto

1998–2004 Hiroyuki Yoshino

2004–2009 Takeo Fukui

Since 2009 Takanobu Ito

Products:-

Automobiles

2008 Honda Accord (USA spec)

Eight Generation Honda Civic (Asian Version)

Honda's global line-up consists of the Fit, Civic, Accord, Insight, CR-V, and Odyssey.
An early proponent of developing vehicles to cater to different needs and markets
worldwide, Honda's lineup varies by country and may feature vehicles exclusive to that
region. A few examples are the latest Acura TL luxury sedan and the Ridgeline, Honda's first
light-duty uni-body pickup truck. Both were engineered primarily in North America and are
exclusively produced and sold there.

The Civic is a line of compact cars developed and manufactured by Honda. In

North America, the Civic is the second-longest continuously running nameplate from a
Japanese manufacturer; only its perennial rival, the Toyota Corolla, introduced in 1968, has
been in production longer. The Civic, along with the Accord and Prelude, comprised Honda's
vehicles sold in North America until the 1990s, when the model lineup was expanded.
Having gone through several generational changes, the Civic has become larger and more
upmarket, and it currently slots between the Fiat and Accord.

Honda increased global production in September 2008 to meet demand for small
cars in the U.S. and emerging markets. The company is shuffling U.S. production to keep
factories busy and boost car output, while building fewer minivans and sport utility vehicles
as light truck sales fall.

Honda produces Civic hybrid, a hybrid electric vehicle that competes with the Toyota Prius,
the Insight and CR-Z.
 Its first entrance into the pickup segment, the light duty Ridgeline, won Truck of the
Year from Motor Trend magazine in 2006. Also in 2006, the redesigned Civic won Car of the
Year from the magazine, giving Honda a rare double win of Motor Trend honors.

It is reported that Honda plans to increase hybrid sales in Japan to more than 20% of
its total sales in fiscal year 2011, from 14.8% in previous year.

Five of United States Environmental Protection Agency's top ten most fuel-efficient cars
from 1984 to 2010 comes from Honda, more than any other automakers. The five models
are: 2000-2006 Honda Insight (53 mpg-US/4.4 L/100 km; 64 mpg-imp combined), 1986-1987
Honda Civic Coupe HF (46 mpg-US/5.1 L/100 km; 55 mpg-imp combined), 1994-1995 Honda
Civic hatchback VX (43 mpg-US/5.5 L/100 km; 52 mpg-imp mpg combined), 2006- Honda
Civic Hybrid (42 mpg-US/5.6 L/100 km; 50 mpg-imp combined), and 2010- Honda Insight (41
mpg-US/5.7 L/100 km; 49 mpg-imp combined). The ACEEE has also rated the Civic GX as the
greenest car in America for seven consecutive years.

Motorcycles

Honda is the largest motorcycle manufacturer in Japan and has been since it
started production in 1955. At its peak in 1982, Honda manufactured almost 3 million
motorcycles annually. By 2006 this figure had reduced to around 550,000 but was still
higher than its three domestic competitors.

During the 1960s, when it was a small manufacturer, Honda broke out of the
Japanese motorcycle market and began exporting to the U.S. 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 U.S. 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 explanation was offered in 1984 by Richard Pascale, who

had interviewed the Honda executives responsible for the firm’s entry into the U.S. 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 U.S. 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 long term strategy. For example,
Honda’s initial plan on entering the U.S. was to compete in large motorcycles, around 300
cc. It was only when the team found that the scooters they were using to get themselves
around their U.S. base of San Francisco attracted positive interest from consumers that they
came up with the idea of selling the Super Cub.

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 U.S. motorcycle market during the 1960s is
used as a case study for teaching introductory strategy at business schools worldwide.

Power Equipment

Production started in 1953 with H-type engine (prior to motorcycle).

Honda power equipements reached record sales in 2007 with 6,4 million units. By 2010
(Fiscal year ended March 31) this figure had decreased to 4,7 million units. Cumulative
production of power products has exceeded 85 million units (as of September, 2008).
Honda power equipment include:

Engine

Tiller

Lawn mower

Riding mower

Trimmer

Mower

Blower

Sprayer

Hedge trimmer

Snowthrower

Generator, welder

Water-pump

Power-carrier

Outboard engine

Inflatable boat

Electric 4-wheel Scooter

Compact Household Cogeneration Unit

Mountain bikes

Honda has also built a Downhill racing bike, known as the Honda RN-01. Honda has taken
on several people to pilot the bike, among them is Greg Minnaar. The team is known as
Team G Cross Honda. The key feature of this bike is the gearbox, which replaces the
standard Derailleur found on most bikes.
Sales

Calendar year Total US sales

1999 1,076,893

2000 1,158,860

2001 1,207,639

2002 1,247,834

2003 1,349,847

2004 1,394,398

2005 1,462,472

2006 1,509,358

2007 1,551,542

2008 1,284,261

2009 1,150,784

2010 1,230,480

U.S. Honda models

Cars Accord Civic Fit -

Energy/Hybrid/Other Civic FCX Clarity Insight CR-Z

Hybrid
SUVs Pilot Element - -

Vans Ridgeline - - -

Crossovers CR-V Crosstour - -

Trucks Odyssey - - -