FRANKFURT — Rather than give its six global business units a fixed platform for upcoming products, Honda will give each region a toolbox of component sets from which to develop products that best suit their individual markets, CEO Takanobu Ito said.
Honda, which will redesign its entire European engine lineup within the next few years, will allow regions to develop their own technologies, he said.
Ito said that Honda has recently "transformed" its product development mechanism and system.
"Until now, we developed new technology in Japan and disseminated it to the U.S. and Europe," he said. "Now, we are encouraging our regions to develop their own technologies and utilize the best materials in their region."
For instance, Honda's regions – Japan, Europe, the U.S., China, Asia and the Middle East – might have a different idea for what would make the best Fit or Jazz subcompact hatchback.
Having separate development in each region would allow a more tailored approach to the local customers. It also could allow for simultaneous launches globally, unlike currently where the U.S. and Europe trails the home market launch by a year or two.
"Each region will have its own technologies and materials. This kind of evolution is necessary," Ito said at the Frankfurt auto show.
The automaker will also give more supplier contracts to companies outside of Japan, as a reaction to the March earthquake that devastated its supply chain.
New diesel for Europe
Ito said that a 1.6-liter diesel engine coming in 2012 will lead Honda's renewal of its entire engine and transmission lineup in Europe over the next three or four years.
He said that, despite increased interest in hybrids here, Honda "spent significant money to reserve this [diesel] in the lineup," due to the high demand for diesel engines in Europe.
"We are slightly behind in some kinds of technologies, but we have evolved our powertrains, especially for petrol engines," Ito said. "For the next year after year, we are going to change our petrol engines, so our competitiveness will be even stronger than today."
New European Civic
Manabu Nishimae, president of Honda Motor Europe, said the redesigned Civic, which goes on sale this autumn, should sell about 100,000 units annually, about equal to its 2007 peak but double its present volumes.
Ito took direct aim at the VW Golf in describing the new Civic.
"It has a more fun-to-drive experience than the Golf, and once you step into the car, you experience a space and utility which the Golf doesn't have," Ito said. "This is a great starting point for the Honda revolution."
Regarding Honda's reliance on a single source for key components, Ito said, "We have learned a big lesson from the earthquake. Toyota, Nissan and Honda were all affected, but Honda was affected the most."
The big hit was with a downed Tier 2 microchip supplier – whom Ito declined to identify – connected the engine and transmission control units and airbag deployment. Honda thought it had alternative sources, but not at a price-competitive level. Now Honda has backup from suppliers in China and Asia.
Said Ito: "For our global business, we have to have multiple suppliers."