Honda boss scratches ambitious plans

Takahiro Hachigo, Honda's new CEO, has made his first press conference one for the history books.

And that's fitting, because Hachigo seems bent on taking Honda back to happier times. First, however, the company must suffer some pain.

The 55-year old executive and former engineer announced plans to scuttle Honda's short-term sales targets, saying that the manufacturer has abandoned its 2017 goal of six million units, an ambitious figure set by former president, Takanobu Ito.

For the 12 months up to the end of March 2015, Honda sold 4.4 million vehicles – making the figure of six million more than just a stretch target. In recent years, Ito's extreme sales targets translated into long working hours and overtime, as staff rushed to meet deadlines. His management style came under attack from critics who claimed he pushed R&D teams too hard.

Hachigo's back-pedalling is likely to be welcomed by both engineers and executives on the sales and marketing side of the fence.

During the press conference Hachigo played up the importance of teamwork and communication, promising to create an environment that incorporates more ideas from people actually involved in projects. He wants to ensure employees have sufficient time to develop strong competitive products and consolidate Honda's position as the number three car maker in Japan, behind Toyota and Nissan.

"We need to prioritise the development of unique Honda products rather than expanding sales volume," he said. "The team that's involved in development needs to spend time to create more effective products, and I want to support our R&D by making sure that time is secured."

The vehicles under development at the present time are the new NSX, the Civic Type R, the S660 and the replacement for the FCX Clarity fuel-cell vehicle. In addition, development of the HondaJet is proving to be a heavy burden on resource.

The rapid model roll-out under Ito led to excess manufacturing capacity and a spate of recalls. Honda's recalls have been recently 'blown out' by manufacturing defects at the Takata factory supplying Honda with airbags.

According to overseas reports, improper deployment by Takata airbags has resulted in injury to vehicle occupants after shrapnel from a disintegrating inflator assembly was expelled from the airbag on each occasion.

Honda has been one of the worst affected brands, but Hachigo said during the press conference that Honda will not bail out Takata – another Japanese company, now in financial strife due to the global airbag issue.

Hachigo plans for Honda to soak up its excess production capacity world-wide by shipping more cars between regions. Honda's global supply network will see some North American Fit and European Jazz models supplied from Japan, the next generation Civic five-door will be sent to other regions from Europe, and the next generation CR-V for Europe will be sourced from Canada.

But there's still room for market-specific design and production – especially if that market is as big as China. Joint venture Dongfeng Honda – based in Wuhan, China – has developed the seven-seat Jade MPV for that market, providing Hachigo with one example of future products tailored uniquely for certain regions and built where they're sold.

Cultural change doesn't end with manufacturing and logistics. Known for its go-it-alone approach to product development, Honda will continue to develop technologies on its own as far as possible, but Hachigo declared he is open to cooperation with other manufacturers, provided benefits can be realised. Honda currently partners with General Motors on fuel-cell vehicle technology, as one example.

Just last week, Honda announced English will be its new corporate language by 2020, hinting at a new, outward-looking Honda in future.