Japanese success in a car industry

September 14, 2008

Japanese car industry is with its philosophy and organization s specific positive phenomenon on the global market of a car industry. Honda and Toyota are two significant representatives of a modern management and at the same time great competitors when we are talking about the development of a hybrid cars for massive production.

Honda is one of Japanese car producers that have not been affected so much by the influences of a global car industry crisis as some bigger brands. People are still continuing to buy them, get them insured with Aviva (http://www.aviva.co.uk/car-insurance/) or whoever, as much as they ever did before. It is not only a question of a smaller and for this reason more flexible corporation as Honda is, but also the ability to predict future trends before the competitors. Some bigger car brands all around the world are struggling with bad business outcomes because of essential mistakes they have done in the past (some of them relied much on the oil and big wasteful personal vehicles). New trends on the global car market lead to more economic engines with low consumption of fuel, hybrid cars(fuel-battery), alternative drives(hydrogen fuel cells) and new principles of management. Success can expect only these car brands, which understand the essential turnabout in the production and marketing process of a car.

Legendary father of a mass production Henry Ford established the main relation principle between producer and customer, where the producer with his offer already determine customer possibility of choice. Japanese Toyota was the first who put the customers needs and wishes on their primary list. That was the crucial turnabout, which represents all the superiority of Japanese management and marketing accession. Honda also followed these strategic actions.

Because of their flexibility, Japanese assume the status of pioneers in the development of hybrid cars. Although the global car industry is in recession, Honda announced 14% rise of sale activities for July. On the other hand, also Honda authorities admit that sale activities will fall down until the end of the year. Car industry experts speculate that Honda and Toyota should step on the throne of hybrid car producers in the close future. Both are in a very advantageous position on the global market especially Honda with its extreme flexibility can step to the top although Toyota is still in front. This is partly the result of engineer superiority, innovativity and high quality standards of Honda cars. Some is also in a well-considered business strategy, genuine understanding for wishes of a contemporary customer and a little bit of luck is always welcome.

After 60 years, Honda is still gaining the power from its dreams

When the Second World War influenced positively on the American car brands, Europeans and Japanese car industry because of devastation have to start from the beginning. Japanese took all the advantages of new beginning and until now have become one of the leaders in the car industry.

Soichiro Honda, the establisher of a Honda corporation showed his extreme talent and sense for improvisation as a 15-year schoolboy when he started with his work in Art Shokai car workshop. His master Juzo Sakakibara admired him and beside the mechanical works taught him the basic business principles. Later, whenever he got question who he respected the most, he always and without exception mentioned his master. Soon Soichiro established his first company, but when Second World War began, the Japanese authorities nationalized his workshop.

After the war, there was a problem, how to find cheap personal transport in demolished Japan and genial Soichiro Honda got an bright idea. He placed small generator of a radio station on the bicycle. That two-tact device, which drives the first prototype of Honda’s motorcycle, meant the beginning of realization of his dreams. After that, he had also done a few improvements and he sold out first 500 motorcycles immediately. On twenty-fourth of September 1948, Soichiro Honda established a well-known Honda company with 34 employees. After 60 years of dreaming about mastery, technological and quality superiority Honda brand has an excellent opportunity to realize its ecological superiority too.

The competition of hybrid David and Goliath

Although the situation in a car industry is not optimistic for all car brands, Honda is trying to benefit all the advantages of unexpected good position of itself on the global market of more compact and economical cars. Honda’s disadvantage at present is that they currently have only one hybrid car on the market, while hybrid cars are becoming essential products for a long-term successful business. Nevertheless, you will not find Honda Corporation among those who are complaining because of bad situation on the global market. This is very important fact for further successful business operation and their reputation. Car brands will have to form not only ecological reputation but also the good name in the sense of reliable car producer that have understanding for a wider social context, where they work.

In a car industry, Toyota is one of the most superior producers, which fits most of ecological demands with its hybrid model Prius (1,5 million of sold cars), when Honda sold about 277.000 hybrid Civics. Toyota is still on the top when we take in to account ecology and the image of the producer but Honda’s marketing is as successful as Toyota’s although it is obviously smaller corporation as Toyota. In time of car industry recession, also Toyota and Honda could not avoid some problems. The cause for some unexpected results was too much reliance on a sale of sport terrain vehicles and pick-up trucks on the biggest market in USA. Honda has the advantage of its flexibility and smaller production capacities, what is crucial for fast response on current changes.  
The second good thing for Honda is that most of its production cars have economic engines and they are very rational in general. These characteristic put Honda in a very competitive position on the market. Honda is looking very optimistic in the future when chasing bigger Toyota. Their close aim is to sell 500.000 hybrids Civics to the end of 2010 and to low down the price difference between standard internal combustion engines and hybrid engines (they announced that possible price difference is only about 1400 euro). Honda also moved off the production its two-seat Insight two years ago (2006), but they are already planning production of new global hybrid with the same name which will as big as Civic and cheaper as its close rival Prius. The official representation of new Insight should be on 22nd of April (day of the Earth).

Three more hybrid Honda cars will come until the end of the year 2010 and these are sport CR-Z, new Civic and Jazz.

On the other side, Toyota is not sleeping and next year new Prius will come with higher production capabilities (480.000 vehicles per year). Toyota mentioned that all its models would also have hybrid variety until the year 2020. This is a clear announcement to their competitors, that they want to stay in front…