Soichiro Honda

views updated May 17 2018

Soichiro Honda

A maverick in a country not known for its willingness to accept nonconformists, Soichiro Honda (1906-1991) created an automobile giant despite the opposition of the Japanese government. One of his company's cars, the Accord, was a best-selling model in the American market.

The first son of blacksmith Gihei Honda and his wife Mika, Soichiro Honda was born on November 17, 1906, in rural Iwata-gun, Japan. In 1922 he graduated from the Futamata Senior Elementary School and began his career as an apprentice auto repairman for Arto Shokai, after which he established a branch shop for the firm in Hamamatsu. Honda also participated in auto races and became interested in cars and motorcycles. Soon he was experimenting with engines, and in 1928 he organized the Tohai Seiki Company to manufacture piston rings, some of which were sold to Toyota. During the 1930s it seemed his would become one of the hundreds of small shops that supplied the major companies in what still was a small domestic market.

Honda's business thrived during World War II, and after the war he tried to enter the personal motor business, a difficult task since the industry was virtually nonexistent. Realizing this, he designed and manufactured a small engine that could be attached to a bicycle to create a motor-bike. The venture proved a great success. Encouraged, in 1948 he organized the Honda Motor Company. In the following year Honda manufactured a small motorcycle called the "Dream D" and prepared to enter the highly competitive (more than 20 firms at the time) Japanese market.

Once again Honda did well, also invading foreign markets effectively. This was made possible through his advertising campaign, in which he altered the image of motorcycling, then widely perceived as a rough way to travel for young males and identified with gangs. Hondas were advertised as a proper vehicle for middle-class individuals of both sexes and all ages. Because of this, within a decade Honda was the leading motorcycle manufacturer in the world and had a larger share of the American motorcycle market than Toyota and Nissan (with its Datsun cars) had in automobiles.

Now Soichiro Honda attracted press attention, and, unlike most Japanese businessmen, he loved it. A small, individualistic, loquacious man, he was the antithesis of what westerners imagined Japanese tycoons to be. For example, he promoted executives on the basis of performance rather than age, an unusual practice at large Japanese firms. Honda continued racing autos and motorcycles, wore slacks and red shirts to work, and took pride in maintaining his independence from the Japanese business establishment. He was quite democratic in his approach. "I associate with anybody—rich, poor, it doesn't make a difference. I prefer to have the principle of egalitarianism rather than a class distinction of people, " he told a reporter, and this could be seen in his free and easy way of living. Honda openly voiced his admiration of American business practices and way of life. In fact, there are few large Japanese companies more American in style than Honda.

Honda branched out into other industries in the late 1950s. In 1958 he brought out a successful electric generator, but, more important, considered entry into the automobile industry.

This was a time when the powerful Ministry of Trade and Industry (MITI) was trying to unite several small companies into a third large one to compete with Toyota and Nissan. MITI and the Department of Transportation tried to dissuade Honda from adding to the number of companies, but he persisted. The government and he were at odds ever thereafter. "Probably I would have been even more successful had we not had MITI, " he said. "MITI was incapable of making automobiles, but I was."

He won MITI's grudging permission by coming out with a very low-priced small sportscar, the S 500, which was different from anything produced by the other companies. He followed it up with other sports models. His company was still very small. In 1966 Honda produced 3, 000 cars, half of what Toyota was turning out in a week.

That year Honda tested the international market by sending its sportscar, the S 800, to Europe. It was not popular. This was followed by forays into the minicar market, which in Japan traditionally was for first car buyers, and experienced another relative failure. Meanwhile, research on new engines produced the compound vortex controlled combustion engine (CVCC), based on a dual combustion chamber, which produced significantly less pollution and greater fuel economy than any other than in production.

Honda sent his cars to America in 1970. The N 600 was far too small to attract many buyers, and the same was true of its successor, the AN 600. But its CVCC engine met all of the Environmental Protection Agency's requirements at a time when other cars had to use expensive and initially inefficient pollution control devices.

Honda introduced the Civic to the American market in 1972. It was smaller than all other Japanese models sold in the United States, but, at a time when gasoline prices were starting to rise, it got 39 miles per gallon (mpg) on the road and 27 mpg in city driving. It did better than the earlier Hondas, but in that year only 20, 500 sedans were sold. However, the consistently improved model sold more units each year in the 1970s. In 1980 Honda sold 375, 000 cars in the American market, almost three times as many as Subaru and twice as many as Mazda but behind Toyota and Nissan.

The reasons for this success were obvious. Honda combined high quality with efficiency and economy. But his small cars still appealed to a limited market.

Always a maverick in the Japanese industry, Honda was the first to accept the idea of manufacturing in the United States. Part of the reason was his perception of the coming market for automobiles. Honda felt that in time the Americans might clamp down on imports, so he wanted to make certain he had production facilities in the United States which would enable him to escape such restrictions. Then too, he knew there was no possibility of taking leadership of the Japanese auto industry from Toyota and Nissan, so the logical place to seek sales was in Europe and the Americas.

In the late 1970s and early 1980s Honda set out to transform his car into a major exporter and producer overseas. He planned to become a true multinational or transnational, highly unusual for a Japanese company at that time. Honda succeeded admirably. In 1979 it opened a plant near Columbus, Ohio, to produce motorcycles, and an auto plant followed soon after, prompting other Japanese companies to follow his lead. In the late 1970s Toyota and Nissan sold one-third of their cars to the United States, while Honda sold half of his in that market.

Honda Motors also enlarged the Civic to the point where it was approximately the same as the Toyota and Datsun and introduced successfully the larger Accord and sporty Prelude.

Soichiro Honda did not directly supervise these introductions or the development of overseas plants in the United States and Europe. He resigned in 1973, but stayed at the company as "supreme adviser." In 1988 he became the first Japanese carmaker to be inducted into the Automobile Hall of Fame. Honda died of liver failure August 5, 1991, in a Tokyo hospital.

Honda, Soichiro

views updated May 18 2018

Soichiro Honda

Born: November 17, 1906
Iwata-gun, Japan
Died: August 5, 1991
Tokyo, Japan
Japanese businessman

An independent person in a country not known for its willingness to accept nonconformists (those that do not cooperate with customs), Soichiro Honda created an automobile giant despite the opposition of the Japanese government. One of his company's cars, the Accord, was a best-selling model in the American market.

Early life

The first son of blacksmith Gihei Honda and his wife Mika, Soichiro Honda was born on November 17, 1906, in rural Iwata-gun, Japan. In 1922 he graduated from the Futamata Senior Elementary School. Honda had little tolerance for formal education and jumped at every opportunity he had to work with his true love: motors. Throughout his life Honda never forgot the impression that was made on him when he sighted his first automobile.

After leaving school Honda began his career as an apprentice (a person who works to gain experience in a trade) auto repairman for Arto Shokai in Tokyo. In 1928 he returned to his hometown as a master mechanic and soon established a branch shop for the firm in Hamamatsu, Japan.

Building an empire

During this time Honda also participated in auto races and became interested in cars and motorcycles. Soon he was experimenting with engines, and in 1928 he organized the Tohai Seiki Company to manufacture piston rings, some of which were sold to Toyota, a major Japanese car manufacturer.

Honda's first attempts at the personal motor business came in the mid-1940s when he designed and manufactured a small engine that could be attached to a bicycle to create a motorbike. The venture proved a great success.

Encouraged by his early success, in 1948 he organized the Honda Motor Company. The following year Honda manufactured a small motorcycle called the "Dream D" and prepared to enter the highly competitive Japanese market, which he did through effective advertising. Within a decade Honda was the leading motorcycle manufacturer in the world and had a larger share of the American motorcycle market than Toyota and Nissan (with its Datsun cars) had in automobiles.

Now Soichiro Honda attracted press attention, and, unlike most Japanese businessmen, he loved it. A small but talkative man, he was the opposite of what westerners imagined Japanese businessmen to be. For example, he promoted executives on the basis of performance rather than age, an unusual practice at large Japanese firms. Honda continued racing autos and motorcycles, dressed casually, and took pride in maintaining his independence from the Japanese business establishment. In addition, Honda openly voiced his admiration of American business practices and way of life.

Automobiles

This was at a time when the powerful Ministry of Trade and Industry (MITI) was trying to unite several small companies into a third large one to compete with Toyota and Nissan. MITI and the Department of Transportation tried to discourage Honda from adding to the number of companies, but he persisted. He won MITI's permission by coming out with a low-priced small sportscar, the S 500, which was different from anything produced by the other companies. He followed it up with other sports models. His company was still very small, producing only three thousand cars in 1966—half of what Toyota was turning out in a week.

Honda introduced the Civic to the American market in 1972. It got thirty-nine miles per gallon (mpg) on the road and twenty-seven mpg in city driving, remarkably efficient for an automobile. The popularity of the Civic rose throughout the 1970s, and in 1980 Honda sold 375,000 cars in the American market—almost three times as many as Subaru and twice as many as Mazda, but still behind Toyota and Nissan. The reasons for this success were obvious: Honda combined high quality with efficiency and economy. But his small cars still appealed to a limited market.

Transforming Honda

In the late 1970s and early 1980s Honda expanded his car company overseas. In 1979 he opened a motorcycle plant near Columbus, Ohio, and an auto plant followed soon after, prompting other Japanese companies to follow his lead. In the late 1970s Toyota and Nissan sold one-third of their cars to the United States, while Honda sold half of his in that market.