When someone uses the term “automobile,” it’s hard not to imagine a large, four-door car with a steering wheel in the driver’s hand. However, cars are not the only kind of motor vehicle. Motorcycles also have wheels and are designed for long-distance travel or commuting. They’re also useful for sports, such as racing and motorcycle rallies.
Honda is one of the world’s largest motorcycle manufacturers. It has a huge presence in Asia, largely because of its scooters. In fact, Honda’s market share in Asia is more than 75%. But it is lagging behind its peers in the cost-heavy business of building automobiles. The company is trying to rectify this situation, which has led to a reduction in the number of trim variations for global models.
Honda is also making major advances in supply chain efficiency. This includes integrating affiliated firms with Hitachi Automotive Systems, which is a key part of Honda’s global production network. As a result, Honda has increased its global manufacturing capabilities.
Honda has a big presence in Latin America and Africa, with a particular focus on emerging markets. It also has a strong foothold in Brazil. And it has a promising entry into neighboring markets, like Argentina and Colombia. Although Honda isn’t yet ready to fully enter these markets, it is confident that it will eventually.
The company’s R&D team has been working on innovative technologies to improve safety. This includes an Advanced Safety Vehicle program in cooperation with the Ministry of Land Infrastructure and Transport, and a cutting-edge Honda Riding Simulator, which lets users experience riding a motorcycle in simulated conditions.
Honda is investing in the future with a wide array of futuristic concept vehicles. These include the IMAS, KIWAMI, and HSC. They combine clean fuel cell technology with Japanese aesthetics. Some of these vehicles are even powered by electric batteries. Honda also plans to roll out standardized replaceable batteries for mid-sized motorcycles.
Honda has also invested in new safety and powerplant technologies. Some of the innovations are aimed at carbon neutrality. Honda will introduce a new version of the Odyssey minivan with a low-floor platform, which will help reduce its center of gravity and provide a low-roofline design.
While the automobile business has had a rough ride in recent years, it is expected to pick up in the future. The automobile industry experienced a 70 percent drop in automobile production in 1998, due to a severe Asian economic crisis. But auto sales jumped to a record 1.43 million in 2012, thanks in part to pent-up demand after flooding in late 2011.
The company’s R&D may be directing more resources toward new business areas, like carbon-neutrality, autonomous driving, or other technologies that could change the way people travel. Ultimately, Honda management is confident that it can improve its margins over the long-term.
Despite the tough challenges of today’s automotive industry, the company is still highly exposed to the North American market. In FY3/2020, 47% of Honda’s sales came from the U.S. The Japanese manufacturer has seen success in the Southeast Asian region. A strong economy and government subsidies have helped boost automobile sales in Thailand. Increasing the company’s production in this region has enabled it to expand its market share.