Honda Motor president and CEO Takanobu Ito

Honda Motor president and CEO Takanobu Ito

The next 10 years will be critical for Honda to survive in the midst of major changes that are sweeping the global auto industry in terms of increasing environmental awareness and changes in the economic structure, its top executive said in a speech in Tokyo.

President and CEO Takanobu Ito said Honda would step up development of its original and advanced environmental technologies and accelerate more widespread introduction.

It also plans to strengthen its business in emerging nations and the competitiveness of its small vehicles.

In his mid-year speech, Ito said Honda had reached the stage where it needed to draw up and execute a new growth strategy.

“In the past several years, consumer preference has quickly shifted toward smaller sized vehicles in every automobile market around the world due to increasing environmental awareness on a global basis, as well as the structural changes that happened to the global economy. Honda must quickly respond to such changes in the times to achieve further growth and expansion in the future.

“Our highest management priority is to establish a corporate structure that ensures a profit while we develop and commercialise advanced environmental technologies, strengthen our business in emerging markets and take prompt action to respond to the market shift toward small-sized vehicles.

“Honda will have no future unless we achieve a significant reduction of CO2 emissions.”

The company, he said, would focus on three core areas:

  • Advancement of environmental technologies
  • Strengthening of the manufacturing system and capability
  • Strengthening of business operations in emerging nations

Ito said Honda would increase the number of hybrid models starting with the Fit [Jazz] Hybrid which will be introduced in Japan this autumn. He added that that the next generation Civic Hybrid would have a high output, compact lithium-ion battery supplied by Blue Energy, a joint venture company between GS Yuasa and Honda which will begin production later this year.

A new plug-in hybrid system for mid-size to larger vehicles is currently under development. Vehicles equipped with this are scheduled to go on sale in 2012 in Japan and the US.

Ito added that, in the mid-term, internal combustion engines would remain the main source of power for vehicles and Honda would continue advancing technology to improve performance and fuel economy. It would begin renewing its engine and transmission line, starting in 2012, to further improve fuel economy.

In addition to the currently available 2.2-litre diesel engine, Honda is developing a smaller diesel which will be introduced in Europe in 2012.

He said: “In the long-term, fuel cell electric vehicles will provide the ultimate mobility. And Honda will continue working on the technological advancement of the FCX Clarity as well as our hydrogen refueling systems.

“We will make progress in the development of a battery EV with a goal to put it in real world use as soon as possible. Honda’s battery EV is scheduled to go on sale in Japan and the US in 2012.”

Ito said Honda management had also looked at the roles its factories in Japan must play in the future and was cancelling the construction of one of two planned new factories.

The Yorii plant in Saitama, due to begin operations in 2013, would play a role in establishing highly sophisticated next generation manufacturing technologies related to the production of environmentally responsible products and low CO2 emissions production. Yorii would also be responsible for spreading this technology to other production operations around the world.

The plant would start with small volume production of environmentally responsible vehicles and, to accommodate the global shift toward smaller vehicles, Honda would begin production of minivehicles at its Suzuka factory in 2012 and has consequently cancelled the planned construction of a new minivehicle plant with Yachiyo Industry. Minivehicle production at Yachiyo’s existing plant would continue, however.

Ito said: “In emerging nations, where continuous growth is expected, Honda will leverage its strength of having access to a wider range of customers through its motorcycle, automobile and power products businesses and thoroughly be committed to deliver products that customers want with more speed and affordability.

“For the automobile business, Honda will leverage the strength it has obtained through its localised motorcycle business in Asia and will further accelerate its effort to localise automobile production based on the concept to produce locally using locally produced dies, materials and components.”

Honda is already planning to introduce a new entry model in India next year. Its also plans a new ‘eco-car’ in Thailand, based on the Indian vehicle, which also will be introduced in 2011.