Honda CEO says 'fundamental transformation' is needed

Honda CEO Takahiro Hachigo: “Management, including myself, must lead in changing our mindset.”

by Hans Greimel of www.autonews.com

TOKYO -- When Takahiro Hachigo was abruptly named Honda Motor Co. CEO last year amid spiraling quality problems, he pledged to revive the troubled automaker through a back-to-basics focus on better cars and streamlined production.

Nearly a year later, with Honda still battling quality issues, the veteran engineer is revamping that comeback plan.

The fix, says Hachigo, 56, will come from rekindling the company's pioneering r&d spirit, once the envy of the industry with its knack for churning out innovative vehicles.

"We recognize the need for a fundamental transformation," he said last week while outlining the strategy. In designing cars for multiple regional markets, Honda was growing at "a pace and scale beyond our means," he conceded.

The recalibration targets the initial stages of r&d, creating new posts committed to design and performance. It is a return to Honda's roots, a DNA Hachigo knows well from his days as a lead engineer on the popular Odyssey minivan and CR-V crossover.

Reinvigorating Honda's originality won't be easy.

The redesigned Civic shows why. When the car was launched late last year, it was hailed as a taste of Honda's glory days. In January, it won the North American Car of the Year title.

But the afterglow dimmed last week, when Honda recalled some 42,000 of the new cars to fix a piston problem that can cause the engine to seize and possibly catch fire.

Honda's image has been further tarnished by soaring recalls due to faulty airbag inflators made by affiliated supplier Takata Corp., which have been linked to nine fatalities in Honda vehicles. Honda has recalled 30 million inflators worldwide.

Meanwhile, Honda must tackle other structural problems, including bloated overcapacity in Japan. Because it had shifted so much production overseas in recent years, Honda failed to cash in on exports when the yen finally began to weaken.

Hachigo now aims to rebalance global production by ramping up output in Japan for exports to North America and Europe.

"The key issue will be how far the company can square the circle between controlling product quality and ramping up models simultaneously worldwide," J.P. Morgan auto analyst Akira Kishimoto wrote in a report after Hachigo's news conference.

Quality over quantity
Hachigo's answer: Prioritize quality over quantity.

"Rather than set up a sales target, we first put importance on creating Honda-unique products," Hachigo said. "After that, we will explore how to increase sales."

The reboot offers a reality check on Honda's unfinished realignment of the carmaker's global operations around six regional hubs, each wielding its own r&d and production power.

Hachigo spent years setting up the structure under his predecessor, Takanobu Ito, before taking Honda's reins last June. But Hachigo said the rapid expansion put too much strain on r&d resources in Japan and needed clearer lines of control.

"We have come to see some issues in the front lines of our development and production facilities," Hachigo said. "This could seriously harm the engine behind Honda's creativity."

To steer the next phase, Hachigo replaced nearly a third of the board and promoted younger executives for new blood. He appointed new people to key roles in charge of r&d, North America and automotive operations. The changes clear the top ranks of some prominent, older-generation executives under Ito.

"It still looks like a work in progress," Chris Richter, an auto analyst with CLSA Asia-Pacific Markets, said of Hachigo's reforms. "Maybe a fresh set of eyes on the problem will help."

Hachigo said electrification will play a big role in Honda's new aura. By 2030, he wants two-thirds of Honda's global sales to come from green cars such as hybrids, plug-ins, fuel cell vehicles and pure electric vehicles. That's up from just 5 percent today.

Production shuffle
Honda also is cranking up production of crossovers to meet demand.

Canada, which currently ships the CR-V to Europe, will cease those exports and channel its production to North America. Honda will add production of the Acura MDX to its plant in East Liberty, Ohio, in 2017, supplementing MDXs from Honda's Alabama factory.

Bigger production shifts are afoot. Hachigo said he wants to tap extra capacity in Europe and Japan by having plants there export more vehicles to other markets.

In the next three to four years, Hachigo aims to boost annual output in Japan to around 950,000 vehicles, from around 730,000 last year. Up to 20 percent of the total will be exported, compared with around 9 percent in 2015.

Japan may begin shipping Civics and CR-V crossovers to North America, after beginning exports of the Fit to North America last year. Japan will also export the CR-V and HR-V compact crossover to Europe. Europe will become the export hub for the new-generation Civic hatchback debuting at this week's Geneva auto show.

Lifting output from Japan is key, Hachigo said. It strengthens a production base that is not only the cradle of Honda's corporate culture but the template for overseas operations.

"We need to realize renovation of Honda's manufacturing," Hachigo said. "Management, including myself, must lead in changing our mindset, and every associate needs to change their perception and the way they work."

Source;
http://www.autonews.com/article/20160229/OEM02/302299970/honda-ceo-says-fundamental-transformation-is-needed

This Honda concept replaces the car's head unit with a smartphone

by Chris Welch of www.theverge.com

Car infotainment systems are slowly improving nowadays, but the vast majority remain unintuitive and quickly grow out of date. So what if, instead of being stuck with whatever your carmaker thinks is right, everything could just run on your smartphone instead? That's partly the idea behind CarPlay and Android Auto, sure, but both of them run on your existing head unit. Drivemode is doing things a bit differently; the company's Android app can turn your mobile device into the central screen in your vehicle. It's not mirroring anything onto a larger display; you just plug your phone into the empty head unit slot, and then it'll start displaying your speedometer, navigation, music apps, incoming calls / texts, and so on.

Since your phone is smaller than most infotainment displays, the Drivemode app puts simplicity first with oversized buttons and easy-to-read text. But reaching for something that's not the steering wheel is less than ideal, so the company has partnered up with Honda and Panasonic to make a concept car with full steering wheel controls. Things like music controls and voice search work just as they would on a regular infotainment system, and Drivemode will even display the feed from the vehicle's backup camera. All of the companies involved note this is still years from being a shipping product, but it's easy to see the appeal — especially in lower end vehicles that might not even offer the popular Apple and Google solutions. For now, Drivemode is available on Android only, though an iOS version could be coming down the line.

Source;
http://www.theverge.com/2016/2/23/11100652/drivemode-honda-android-phone-head-unit

Honda aims for green cars to make up two-thirds of line-up by 2030

Honda FCV

By Naomi Tajitsu

TOKYO (Reuters) - Honda Motor Co Ltd 7267.T on Wednesday said it aimed for new-energy vehicles to account for two-thirds of its line-up by 2030 from around 5 percent now, as increasingly stringent global emissions regulations prompt automakers to make greener cars.

Japan's third-biggest automaker by sales said in its latest strategy update that its petrol-battery hybrid, plug-in hybrid, battery electric and fuel cell vehicles (FCV) would collectively outnumber its petrol-only offerings in less than 15 years' time.

Plug-in hybrids - which can also be recharged via household wall sockets - will be "at the core of electrification in the future" for Honda, said Chief Executive Takahiro Hachigo.

Honda will release a plug-in hybrid in North America by 2018 that shares the same production platform as its Clarity FCV announced in October, Hachigo said. It will then make plug-in versions of its major models and raise model numbers, he said.

The announcement makes Honda the latest automaker to set dramatic long-term emissions-related targets. In October, Toyota Motor Corp 7203.T said it aimed to cut new vehicles' average carbon dioxide emissions by 90 percent from 2010 levels by 2050.

Behind the push are governments globally rapidly raising emissions standards. But limited infrastructure such as charging stations make some green cars a hard sell, while low oil prices have sparked demand for sport utility vehicles and other petrol-guzzlers.

R&D FOCUS
Honda's new-energy target featured in the automaker's strategy update, the first under Hachigo. The CEO, who assumed the job almost a year ago, has restructured personnel and operations to revitalize research and development (R&D).

On Tuesday, Honda said managing officer Yoshiyuki Matsumoto would direct R&D, moving on from leading automotive operations.

"Our appointment of a new head of the R&D center is intended to position R&D at the center of all product development, and make it responsible for the design and performance of each and every vehicle," Hachigo said on Wednesday.

The strategy update also included a shift to standardized vehicle platforms to increase production flexibility - in line with an industry trend - and a focus on global models such as the Fit compact, Civic and Accord sedans.

"The key to improving sales is our global models ... which are so central to the company's brand. If we develop these models to raise their appeal, it will translate into higher sales," Hachigo said.

Separately, Honda repeated at the strategy update that it did not plan to offer further financial support to long-time supplier Takata Corp 7312.T, whose airbag inflators are at the center of a deepening global recall.

(Reporting by Naomi Tajitsu; Editing by Christopher Cushing)

Source;
http://ca.reuters.com/article/businessNews/idCAKCN0VX0TT

Honda CEO to shift gears, distance sales teams from car design process - sources

Nearly a year into his job, Honda Motor Co CEO Takahiro Hachigo plans a back-to-the-future shift at the Japanese automaker, driving clearer demarcation lines between those who develop cars and those who sell them, two senior company insiders told Reuters.

TOKYO: Nearly a year into his job, Honda Motor Co CEO Takahiro Hachigo plans a back-to-the-future shift at the Japanese automaker, driving clearer demarcation lines between those who develop cars and those who sell them, two senior company insiders told Reuters.

The thrust of the changes, to be unveiled by Hachigo in Tokyo on Wednesday, will be to reduce the influence ofsales and marketing teams on car design, reversing moves by previous chief Takanobu Ito, the people said.

"Over the years, our product development process became overly complex and slow, involving a huge number of engineers and sales and marketing people," said one of the two Honda executives. As a result, "we began producing watered down, uninspiring, what you might call designed-by-committee, cars."

Hachigo, 55, has taken soundings internally and set up a small task force of mainly younger fifty something executives, said the insiders, who did not want to be named as they are not authorized to speak to the media.

As a result, he plans a re-balance of power between engineers and marketing on car design, they said, noting sales people focus more on a car's affordability than its performance.

"Sales people involved in product planning are more focused on customers' immediate needs. We need to stay focused on that, but it's not much help in figuring out what kind of car we should be putting out 5-10 years down the road," the second executive said.

"Tech people should design cars more freely, but take responsibility if the car isn't successful."
Hachigo, who has an engineering background, is likely to limit sales executives' participation at key product planning meetings, including the annual "long-term strategic conference" that usually is held in the spring, they said.

Honda's chief spokesman Kaoru Tanaka declined to comment.

TECH AUTONOMY
Hachigo will give more autonomy to Honda R&D Co, the technology unit, and rein in some of the independence at the group's regional blocs in Japan, North America, Latin America, Asia-Pacific, Europe and China.

Increased localization has led to regional differences in engine size and features such as hybrid systems and all-wheel drive trains in global models including the Accord, Civic, Fit and CR-V in order to be cost-competitive, the executives said.

Hachigo is also likely to return to Japan the planning and development work on vehicle platforms and core technologies that had begun to flow to the regions in past years, they added.

In a management reshuffle announced on Tuesday, Yoshiyuki Matsumoto, Hachigo's rival for the top job last year, moved from automotive operations chief to head of Honda's Research and Development center, a key technology post.

Hachigo is expected to restructure Honda's global Automotive Operations headquarters, which looks after product planning among other functions. Senior engineers previously relocated to the Tokyo head office to promote cooperation with sales divisions are now likely to move back to Honda's tech center near Utsunomiya, north of the capital, the executives said.

The strategy overhaul will also see Honda revert to a concept of 'sogo hokan', or mutual interdependence among production facilities around the world, they said.

They noted that Honda failed to make the most of last year's strong U.S. market growth and a weaker yen because it had not set aside enough capacity in Japan to produce cars to sell in the United States, which accounts for around a third of global sales.

The immediate target, the executives said, is to boost sales globally with more innovative and distinctive cars, and eliminate excess capacity of around 750,000 cars a year.

Honda, which is battling the fall-out from a massive global recall over faulty Takata Corp air bags, sold around4.75 million vehicles last year and had the capacity to produce5.5 million.

(Reporting by Norihiko Shirouzu; Editing by Ian Geoghegan)

- Reuters

Source;
http://www.channelnewsasia.com/news/business/exclusive-honda-ceo-to-s/2542964.html

Car and Driver: Honda Americas R&D Chief: Our Cars Won’t Crash After 2040

by Davey G. Johnson of www.caranddriver.com

Honda, like other automakers, has taken to calling itself a “mobility company.” Which sounds a bit highbrow until you consider the sheer number of things the company makes. Outboard motors. Riding mowers.
Motorcycles. Minivans. A freaking jet airplane. Speaking at the SAE World Congress last week, Honda R&D Americas president Frank Paluch outlined Honda’s vision for the next 35 years of vehicular travel. Let’s just say that it’s ambitious.


Thirty-five years ago, we were just coming out of the haze that was the ’70s. BMW had yet to introduce the E30 3-series. GM was finalizing development on its J platform, which reached its ultimate evolution in the form of the Cimarron. Chrysler’s K-cars were just about to appear. “Minivan” was a term yet to be coined. “SUV” wasn’t even a thing, much less “SAV” or four-door coupe. “Hybrid” was something to do with horticulture. AMG was a little hot-rod/race shop in Affalterbach, and C3 Corvettes were down to making exactly zero horsepower at any rpm. The Camry had yet to be unleashed upon the world. Elon was a mere Musklet, and you could read Car and Driver only once a month. All Paluch is suggesting is that the next 35 years will see Honda vehicles talk to each other, talk to infrastructure, stop killing people, ease congestion, and send you hurtling down the San Joaquin Valley at 186 mph like you’re Don Prudhomme at Famoso.

Paluch envisions the rollout in phases, the first only five years out, which suggests that Honda is very close to production deployment. By 2020, he suggests that we’ll see vehicles connected to each other and to infrastructure in such a way that will see a 50-percent reduction in accidents involving Honda vehicles.

Ten years after that, all road users will be connected, including bicyclists, pedestrians, and motorcyclists. By 2040, Honda-connected vehicles would be accident-free, which allows for things like express lanes for connected vehicles, enabling automated travel at autobahn-grade speeds between San Francisco and Los Angeles. In thirty-five years’ time, cars will merge into a semi-sentient hive mind, a direct precursor to the rise of the machines, which will send all of us to our ultimate end as slaves of Hondanet.

We made up that last bit; Paluch sees it in a much more positive light, saying, “With the advancement of learning, sensing, and communication, in both cars and infrastructure, we will move into a new realm, a cooperative car society, in which the highly automated vehicle becomes a platform for the transformed mobility experience.”

And despite the battery-electric vehicle being the clean machine of the moment, Paluch is still betting on hydrogen fuel cells as the power source of the future, paired with smart grids and photovoltaic arrays. Paluch sees it something like this: “My FCV is connected to my smart home energy system, supplementing the grid and acting as part of a distributed energy network that includes wind and locally generated solar power. In the event of a blackout, my car functions as a home backup generator. And now I am living the low-carbon dream, driving and living with net-zero grid energy and zero CO2 emissions.”

For the rest of the article;
http://blog.caranddriver.com/honda-americas-rd-chief-our-cars-wont-crash-after-2040/

(I couldn't resist....)