Honda CEO Mid-Year Speech Focuses on Growth
20 July 2007
In his annual mid-year speech, Honda President and CEO Takeo Fukui described a set of plans and initiatives designed to accelerate the company’s activities in three main areas: growing internationally; accelerating efforts to strengthen the company’s “core characteristics”; and strengthening its effort to reduce its environmental footprint.
The current 3-year plan began in spring 2005, when Fukui outlined plans for the major next-generation powertrain technology and fuel economy targets for automobiles, motorcycles, and power products. (Earlier post.) In the mid-year speech in 2006, Fukui announced the development of the new, low-cost hybrid and Tier 2 Bin 5 diesels. (Earlier post.)
The 2007 speech, by contrast, contained little in the way of new technology or product, but focused more on execution—primarily the worldwide development and expansion of production capabilities and of sales channels.
Honda is putting extra focus on developing markets.
Honda’s production in India will double from 50,000 to 100,000 by the end of 2007, and exceed more than 150,000 by 2010 with the addition of a second auto plant.
Honda’s production in Thailand will double from 120,000 to 240,000 by the latter half of 2008 with the addition of a second auto plant there. An engine parts plant that began operation this April will be joined by a subsidiary which produces stamped body panel service parts in the fall. These parts and components produced in Thailand will be supplied to other countries, primarily in the Asia/Oceania region.
Honda is expanding its production capacity in Brazil to 100,000 units by the end of this month.
Honda is building a new production plant in Argentina with an annual capacity of 30,000 units, due to become operational in the latter half of 2009. The new plant will also begin exporting products to other countries in the South America region and play a key role in Honda’s production network in South America along with the Honda auto plant in Brazil.
Guangzhou Honda Automobile Co., Ltd., a Honda joint venture company in China, will establish a wholly-owned automobile R&D subsidiary, Guangzhou Honda Automobile Research & Development Co., to build a full-scale automobile R&D facility with a test course. This company will develop a product which will be marketed under an original brand of Guangzhou Honda targeting the start of sales in 2010. In China, Honda currently has a total automobile production capacity of 530,000 units.
In Vietnam, Honda is building a second motorcycle plant in response to increasing overall demand for motorcycles in Vietnam. The new plant is scheduled to begin mass production in the latter half of 2008, with initial annual production capacity of 500,000 units. Combined with the existing plant’s one million units in annual production capacity, Honda’s annual motorcycle production capacity in Vietnam will be expanded to 1.5 million units.
Honda Aero, Inc., is building a jet engine manufacturing plant in Burlington, North Carolina, adjacent to the Burlington-Alamance Regional Airport. The new facility will produce advanced jet engines developed and marketed by GE Honda Aero engines LLC. (Earlier post.)
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