Honda Motor Co., Ltd
Honda Motor Co., Ltd., founded in 1948 by Soichiro Honda, is a renowned Japanese manufacturer specializing in automobiles, motorcycles, and power equipment. With its corporate headquarters in Tokyo, Honda has established itself as a global leader in the automotive industry, particularly recognized for its popular models like the Civic and Accord. The company operates thirty-three production plants across twenty-two countries, making it a significant player in both the motorcycle and automobile markets. Honda is the world’s largest motorcycle manufacturer and has a notable presence in the United States, where it began automobile production in the early 1960s.
Over the decades, Honda has adapted to changing market demands, introducing innovative technologies such as hybrid and fuel-cell vehicles. Despite facing challenges, including a high-profile airbag recall linked to supplier Takata, Honda has maintained strong sales, driven by its commitment to quality and environmental responsibility. The company’s focus on electric vehicle production is a key part of its ongoing strategy, exemplified by its 2030 Vision plan. With a workforce of over 218,600 people globally as of 2022, Honda continues to influence the automotive landscape while fostering a reputation for reliability and efficiency.
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Honda Motor Co., Ltd.
Company Information
- Date Founded: 1948
- Industry: Automobile and motorcycle manufacturing; financing services; power equipment production
- Corporate Headquarters: Tokyo, Japan
- Type: Public
Honda Motor Co., Ltd., or simply Honda, consistently ranks as one of the world's leading automobile and motorcycle manufacturers. Additionally, Honda manufactures power equipment, such as generators, boat engines, snowblowers, and lawn mowers, and provides loans and leasing options to dealers and customers. Since the early 1980s, Honda has maintained manufacturing plants in the United States. Honda is particularly popular in Japan and the United States. The Civic and the Accord are the company's best-selling models. Honda operated thirty-three production plants in twenty-two countries in 2022. The company was the world's largest manufacturer of motorcycles in 2022 and was one of the largest Japanese car manufacturers.
Founded by Soichiro Honda in 1948, Honda employed over 218,600 people globally as of 2022. Forbes ranked Honda seventh on its The Halo 100 list (2022), thirty-fourth on the World's Best Employers list (2022), and eleventh on the Customer Experience list (2023). Toshihiro Mibe took the reigns as Honda's president and chief executive officer (CEO) in 2021.
History
Soichiro Honda, a Japanese engineer, auto mechanic, and motorcycle enthusiast, established Honda Motor Co., Ltd. on September 24, 1948, in Hamamatsu, Japan, with one million yen. During its initial months, Honda produced engines for motorcycles. In 1949, the new company designed and released its first motorcycle, the Dream D-Type. That same year, Takeo Fujisawa joined the company as managing director, becoming Honda's longtime partner. Honda motorcycles quickly became a popular and important means of transportation in post–World War II Japanese society, as Allied bombing campaigns had damaged much of the nation's manufacturing industry during the war. Furthermore, Honda motorcycles started attracting international attention from motorcycle enthusiasts during the 1950s and 1960s, particularly as a result of increased exposure from motorcycle shows and racing competitions. Honda opened its first store in the United States on June 11, 1959, with the American Honda Motor Company in Los Angeles, California. This shop was Honda's first subsidiary established outside of Japan, and the Honda 50 motorcycle soon became the best-selling motorcycle in the United States.
Honda did not begin producing cars and trucks until the early 1960s. In June 1963, Honda released its first non-motorcycle vehicle, the T360, a small pickup truck, and in October of that year, the company released its first car, the S500, a small sports car. Honda continued to expand its car production throughout the 1960s, although it refrained from exporting its cars to the American market for some time. At that point, Japanese cars were considerably smaller than American cars, such as Fords and Chevrolets, and their design looked quite different from that of US models.
Anticipating that American consumers would not be interested in Japanese cars, Honda did not introduce a car in the United States until 1969 (the N600 minicar) and did not truly begin to sell cars in the country until 1973, when the Civic hit US markets. With a smaller engine and greater fuel efficiency than typical American models, the Civic quickly gained popularity among American drivers, as the energy crisis of the 1970s led to gasoline shortages and rising gas prices as the decade progressed. The Civic's environmental friendliness also contributed to its appeal in the United States, as it was the first automobile that met the standards of the Clean Air Act of 1970 without using a catalytic converter. Honda released the Accord, a mid-size sedan, in 1976, which also became popular in both Japan and the United States as a result of its fuel efficiency and more spacious interior.
The 1980s, like the 1970s, was a significant decade for Honda's operations in the United States. Honda opened its first production facility outside of Japan in 1982, when the company began manufacturing cars at a plant in Marysville, Ohio. Over time, Honda established additional assembly plants in Alabama, Indiana, Georgia, and South Carolina. In 1986, Honda introduced Acura, a brand of luxury cars—the first produced by a Japanese manufacturer. Throughout the 1980s, Honda and other Japanese automobile manufacturers had attained such success in the US car market that American automobile manufacturers Ford, Chrysler, and General Motors were forced to lay off large numbers of workers due to declining sales and the effects of an economic recession.
After initially struggling to adapt to the rise in popularity of pickup trucks and sport utility vehicles (SUVs) in the late 1980s and early 1990s, Honda successfully launched new models and fended off a hostile takeover attempt by rival Mitsubishi. Focused on making technological, comfort, and safety advancements, Honda continued to achieve success worldwide during the 1990s, including the introduction of its aircraft division. It introduced the first production hybrid car in North America with the Insight in 1999. Honda's success and innovation continued into the twenty-first century, with a growing number of models including hybrids, all-electric vehicles, and a hydrogen fuel-cell car.
In 2015, Honda rejoined the Formula 1 auto racing circuit, which it had participated in earlier in its history but left in 1992. The company achieved record sales of 1.59 million vehicles in the United States that year, an increase of 3 percent that surpassed its previous US sales record established in 2007. Furthermore, the Honda CR-V stood as the best-selling SUV in the United States.
Despite this success, Honda faced notable challenges. Beginning in 2013, several automobile manufacturers—including Honda—issued recalls of certain vehicle models released during certain years because of defective airbags produced by their supplier, the Takata Corporation. When deployed, the defective airbags risk exploding during inflation, sending shards of metal into passengers. While several car manufacturers use Takata airbags, Honda, the company's biggest partner, was most affected by the recall. By June 2016, Honda had recalled millions of vehicles worldwide, and the company had set aside $2.45 billion toward recall efforts. Multiple US deaths and more than one hundred injuries specifically linked to Honda vehicles were reported.
However, while the airbag scandal affected the company's profits, it was not seen to significantly impact sales. In 2017, for example, the auto industry as a whole saw a decline in sales but Honda realized another record-breaking year with 1.64 million automobiles sold. This success was driven by redesigned versions of popular models such as the Civic, Accord, and CR-V.
In 2017 Honda released an outlook plan known as the 2030 Vision. It laid out both the successes and challenges the company faced having grown into a major international corporation serving more than 30 million customers annually. Perhaps one of the most notable aspects of the plan was the goal of drastically increasing its focus on electric vehicles. Honda also responded to the changing economic landscape of the late 2010s by scaling back operations in some areas. In 2019 it confirmed it would close its British manufacturing plant within two years, in part due to the complications posed by Great Britain's withdrawal from the European Union (Brexit), and it also announced plans to close a plant in Turkey.
Following stalls in production due to COVID-19, Honda partnered with Sony and General Motors in the early 2020s to increase production of electric and hydrogen fueled cars. Though its assets decreased slightly to $193.2 billion in 2022, Honda's profits totaled $7.2 billion. In early 2023, the company recalled half a million vehicles in the United States.
Impact
Despite some setbacks, Honda has demonstrated an ability to maintain its status as one of the leading car producers in Japan, the United States, and the world as a whole. Along with its chief competitor, Toyota, the company played a key role in bringing Japanese cars to the US market, and its designs have influenced the automobile industry since the 1970s. It has been a pioneer of hybrid cars and fuel-cell technology, showing a commitment to environmental responsibility.
Honda has found success in learning from its mistakes and adapting to what consumers demand. For example, car dealers, automobile experts, and customers deeply criticized the 2012 Honda Civic for a choppy ride, loud engine noise when driving at higher speeds, poor quality of steering control, and allegedly cheap-looking cabin interior and bland-looking exterior. Honda's corporate office responded to these sharp criticisms by announcing a series of redesigns for the 2013 Honda Civic ahead of schedule. Thanks in part to the company's respected reputation, Honda models, especially the Civic, have consistently had strong resale value and used sales. In the 2010s, the company consistently ranked among the top manufacturers of fuel-efficient vehicles, and in the 2020s, the company continued to expand its line of electric vehicles.
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