31-07-2012, 09:39 AM
Honda : innovation the Chinese way
Innovator -- mohit negi.docx (Size: 22.22 KB / Downloads: 36)
Summery
This case is all HONDA and how they started ‘GUANGZHOU HONDA’S RESEARCH AND DEVELOPMENT (GHRD)’ which aims to develop and build up the technological capabilities to produce a completely new car from the ground up.
The case tells us about the entry of Honda in China, how it entered to the Chinese market and what all the external were and internal factors which leads Honda to become a success in China. Case discussed about the market potential, the consumers and about the competitor of Honda in Chinese market. China emerged as the largest automobile consumer market and the largest vehicle manufacturer. The Chinese automobile makers kept in mind the needs and preferences of their modern customers who look for the individually in their cars.
Honda spent a lot of its share of revenue towards research and development and focused on new product development and then came with some joint ventures in China by expanding its business. The profit of Honda was increasing with the expansion in China.
Analysis of the case
China’s automobile industry sees a promising future after years of development. In 1998, China produced 1.56 million automobiles, accounting for only one sixth of General Motor’s annual output and one third of Toyota’s yearly production. After less than one decade of development, China has emerged into the world’s fastest-growing major auto market, with an average annual growth of more than 22.2% from 1998 to 2006.
In 2006, it overtook Japan as the world’s second largest auto consumer after the U.S., with auto sales rising 25.1% year-on-year to 7.2 million units. Meanwhile, it surpassed Germany to become the third largest auto maker after the U.S. and Japan, with automobile production climbing 27.6% year-on-year to 7.3 million units.
In 2007, automobile production and sales jumped over 20%, despite soaring raw material prices, indicating continued robust growth in the world’s second largest auto market.
Automobile production amounted to 8.88 million in 2007, with an increase of 22.02% over 2006. This figure closely approaches the target of 9 million units set in the eleventh 5-year (2006-2010) plan for the automobile industry by China’s National Development & Reform Commission, the nation’s top economic planner. Auto sales totaled 8.79 million, representing a growth of 21.84% year-on-year. Figure 2.1.1 shows China’s automobile production and sales between 2001 and 2007.
As per the case the automobile market in china was booming. As per the exhibit 2, HONDA is the 6th largest automakers among the world’s top ten automakers in global sales in 2007.
Innovative technology has always been a Honda trademark, showcasing pioneering engine and design has set standards par excellence.
Honda’s innovation
At Honda innovation is the rule, not the exception. At Honda, they never stop looking for ways to maximize power, sharpen handling, minimize weight and optimize fuel efficiency while reducing emissions. No component is ever too minor to escape Honda’s R&D microscope.
Every technological and design advance is made keeping in mind the customer’s choice and preferences, the ultimate goal being to ensure the most rewarding and enjoyable riding (and ownership) experience possible. And that means not only striving to maximize the products’ performance capabilities, but their durability and dependability as well. They focused more on INVENTION and NEW PRODUCT DEVELOPMENT.
Honda’s R&D
The joint venture took place between Honda and Guangzhou and they together developed the research and development company i.e. Guangzhou Honda’s research and development co. ltd. (GHRD).
Guangzhou Honda is not only building a vehicle type or a brand, but opening up a new way of independent research and development, a way for joint ventures to maintain sustainable development.
To meet the needs of local customers, Honda setup regional R & D centers and operations in various regions around the world. These world wild initiatives were coordinated by the headquarters in Japan, which was also responsible for developing advance technologies. Honda encouraged the regional operations localize production using the expertise available in the local factories.
Although it has a high starting point, the independent research and development of Guangzhou Honda actually started from scratch. The company took the lead in building independent brands of joint venture in 2007, and released Chinese brand name, which is "Lineman” and its brand logo in April of 2008.
Guangzhou Honda adopted a down-to-earth and moderate attitude, started from the most basic R&D works and made great efforts to lay a sound foundation.
Guangzhou Honda has summed up the methods of carrying out independent R&D, and has preliminarily established a database for independent R&D; at the same time, the company has set up a developing and purchasing system for key parts and accessories, and promoted the development of self-support in terms of talents.