Honda to reform six-region development strategy

Electrified vehicles to account for two-thirds of vehicles sales around 2030

2016/06/02

Summary
Revising the six-region global development strategy: A return to strengthening global models
Rebuilding production systems to support global models across regions
Introduction of electrification technology with launches of Clarity Series FCV, EV, and PHV
New models other than electrified vehicles
Sales forecast by LMC Automotive: Honda's light vehicle sales to reach 4.88 million units in 2019

Summary

2017 Accord Hybrid equipped with second-generation two-motor hybrid system (for the U.S. market)
(photo: courtesy of American Honda)

At a press conference held by its president in February 2016, Honda Motor Co., Ltd. announced that it has started taking initiatives to further build up its operational structures because the company believes its six-region global operation structure is in need of drastic reform.

For development, while the models exclusive to specific regions that resulted from the six-region structure have produced considerable results, Honda intends to revitalize its global models to reduce the burden resulting from increased development man-hours. The company also has made organizational changes to clarify roles and responsibilities in development processes.

Honda will modify its policy of "producing vehicles where needed" and form a system to mutually complement production among its regional bases around the world. The company's exports as a proportion of its production in Japan decreased to 3.4% (30,000 units) in fiscal year 2014 (ended in March 2015). Honda plans to increase the export proportion to between 10% and 20% in order to utilize its flexible production system in Japan and maintain the functions of its main plant.

The Japanese automaker will step up the introduction of electrification technology to reduce CO2 emissions. The company is aiming to have electrified vehicles account for two-thirds of its vehicle sales by 2030 so that zero-emissions fuel cell vehicles (FCVs) and electric vehicles (EVs) make up around 15%, and hybrid vehicles (HVs) and plug-in hybrid vehicles (PHVs) account for 50% or more. The company will focus on PHVs in particular for its future electrification strategy.

Honda will launch a number of electrified vehicles between 2016 and 2017. In Japan, the company began lease sales of the Clarity Fuel Cell (FCV) in March 2016. The company will release the Freed one-motor HV, a new Odyssey and Accord that are equipped with a revamped two-motor hybrid system, and the NSX and Acura MDX three-motor HVs by the end of 2016. In the U.S., Honda will launch the Clarity Fuel Cell in the second half of 2016, as well as EV and PHV variants built on the same platform underpinning the FCV in 2017.

Honda will scrap the plan to achieve global sales of 6 million units that it announced in 2012, and will give prioritize making products in its own unique way over increasing scale. The company expects this policy change to eventually lead to an increase in sales volume.

Honda shifts direction for development and production

	2012 to present	Post-revision
Concurrent development in all six regions	Emphasize developing models that meet regional needs	Return to strengthening global models
Production system	Do end-to-end production and sales in regions where there is demand	While maintaining the fundamentals of local production, rebuild inter-regional complementary relationships
Sales targets	Achieve global sales of 6 million units in FY 2016	Emphasize increasing product appeal over expanding scale

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