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Design & Quality Concerns at Honda Motors
EXCERPTS
TROUBLE AT HONDA MOTORS
In October 2014, Honda Motors reported a 17.9% increase in net income for the second quarter of FY 2015 compared to the same quarter of FY2014. This was due to the high automotive sales in Europe and Asia (excluding Japan). Total revenues for the quarter increased by 4% to ¥3,000.2 billion (US$27.8 billion) but operating income for the same period declined by 4.1% to ¥164.4 billion (US$1.52 billion). The decrease in operating income was due to a decrease in automobile unit sales in North America and Japan as Honda Motors struggled with product recalls in these two countries. On account of the lower operating income, the company lowered its FY 2015 earnings forecasts from 4.83 million vehicle sales to 4.62 million, citing challenging business environments in North America and Asia.... |
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PRODUCT PORTFOLIO
Honda Motors’ global automobile lineup had three units, namely, the Acura premium brand, mid-sized vehicles, and small cars, and consisted of the Acura, Fit, City, Amaze, Brio, Civic, Accord, Insight, CR-V, CR-Z, Legend, Mobilio, Jazz, and Jade among others (Refer to Exhibit V for Honda Motors Automobile Product Line Up)...
LAGGING BEHIND IN POWERTRAIN TECHNOLOGIES
Applauded globally for its CVCC, VTEC, and i-VTEC engines, Honda Motors could not keep pace with innovations like six-speed transmissions and direct fuel-injection systems. The company, which had once surprised global automakers with reasonably priced, fuel-efficient cars like the original Civic, became complacent. Its later powertrain technologies failed to keep up with advancements including turbocharging, direct injection, as well as 7-, 8- and 9-speed automatic transmission to enhance performance as well as fuel economy...
OVEREMPHASIS ON OVERSEAS OPERATION
Honda Motors had always focused on its overseas operations rather than on its domestic market. In its domestic market, it was trailing Toyota Motors. Its sales in Japan declined by 25% in the third quarter of FY2015 compared to the previous year. In FY2014, Japan had accounted for 18% of its total sales compared to 21% in FY2010. However, during the same period, the share of North America in its total sales had increased from 46% to 51%...
NEW INITIATIVES
Since Honda Motor was sourcing its parts and materials globally, ,it established the Global Honda Quality Standard (G-HQS) based on the ISO 9001 and ISO/TS 16949 standards in April 2005 in an effort to maintain a shared global quality assurance standard. “We have to aim for 120% product quality...
THE ROAD AHEAD
In January 2015, Honda Motors introduced the refreshed version of the Acura NSX at the North American International Auto Show. The 2016 ILX, Acura’s entry-level sedan, would be available for sale in the first half of 2015, with the aim of registering record US sales in 2015...
EXHIBITS
Keywords
Design,Quality,Operations management,Engineering,Product portfolio,Corporate image,Brand image,Innovation,Quality issues,Product recall,Quality Cycle,Quality enhancement systems
