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Summary of Honda CEO Speech at Honda Meeting 2017

TOKYO, Japan, June 8, 2017 – Honda Motor Co., Ltd. President & CEO Takahiro Hachigo held a press meeting (Honda Meeting 2017) to discuss the future direction of Honda, including various products and technologies and the company’s new 2030 Vision. Following is a summary of his formal remarks, with new announcements indicated with underlined text.

Speech Summary:

<<What Honda has achieved in the last two years and the direction Honda will take in the future>>
Since I became president, we have set and pursued the following two themes:

  • Development of challenging products unique to Honda
  • Advancement of our six-region global operation structure

1. Strengthening global models and regional models
We have been strengthening our global and regional models, which have long been strengths of Honda.

<Global models>

  • Civic: Sales of the all-new Civic with a refined design and driving experience are going strong everywhere. The announcement of this all-new Civic in Japan is planned in late July 2017.
  • CR-V: Sales of the all-new CR-V started in the U.S. With the addition of a hybrid version, we are going to further grow CR-V as a strong global model.
  • The next-generation Accord: Accord will undergo a full model change this year starting from the U.S. market, with a further advanced design and driving experience.

<Regional models>

  • Highly-acclaimed and continuously-growing regional models include the BR-V (Asia), the Ridgeline and Odyssey (North America), the Avancier and UR-V (China).
  • N-BOX mini-vehicle model (Japan) will undergo a full model change this fall.

2. Design and driving experience

  • Design: We are going to launch our new design direction at an auto show this fall.
  • Driving experience: Technologies to realize what Honda strives for -- further evolved “driving experience that performs at the will of the driver” – are currently under development.

3. Mutually complementary system for Honda’s global operations

  • Balancing supply and demand in global production and sales: We have been working to establish a flexible production system and mutually complementary production among six regions. We began seeing positive results from our efforts.
  • In North America, in order to enable us to accommodate the recent increase in demand for SUVs, we are in the process of establishing a production system where we can handle the production of light truck models such as the Honda CR-V and Pilot and the Acura MDX more flexibly.
  • As for Civic Hatchback, supply from the U.K. to North America has begun and export to Japan is being planned.
  • The WR-V, a regional model developed mainly by the Honda R&D center in Brazil, is now being produced and sold in India as well. We are facilitating inter-regional coordination to evolve our models more efficiently.

4. Enhancing the introduction of electrification technologies 
<Automobiles>

  • We strive to electrify two-thirds of global automobile unit sales in 2030.
  • Our development will put a central focus on hybrid-based models utilizing a high-efficiency plug-in hybrid system unique to Honda.
  • As for zero-emission vehicles (ZEV), we will strengthen the development of electric vehicles (battery EV) in addition to fuel cell vehicles (FCV).
  • Battery EV: In addition to a China-exclusive model scheduled to go on sale in 2018, a dedicated EV model for other regions are also currently under development. We will introduce this model at an auto show this fall.
  •  In order to further increase development speed, we are strengthening our system and capability for the development of electrified vehicles. In October of last year, we established within Honda R&D an Electric Vehicle Development Division, a specialized team which will be in charge of developing the entire vehicle including the powertrain and body.

<Motorcycles>

  • We are striving to promote the electrification of commuter models, and we are planning to introduce some new models including an electric scooter in 2018.
  • We are currently working on the research and development of a highly-convenient system for electric commuters, which feature a detachable mobile battery that is easy to replace and/or recharge. We are considering to conduct demonstration testing of this mobile battery in collaboration with the Japan Post Co., Ltd. in Japan.

5. Initiative toward the introduction of advanced safety technologies
<Increasing the number of vehicles that feature Honda SENSING technologies>

  • In Japan, starting with the all-new N-BOX, we will make Honda SENSING standard equipment on all new models we introduce in Japan from here forward, including mini-vehicles.
  • We will expand application of Honda SENSING for all-new models in other regions as well, including North America, China, and Europe.

<Development of automated driving technologies>

  • Through its automated driving technologies, Honda is striving to “serve people worldwide with the joy and freedom of collision-free mobility.”
  • There are three values we want to realize.

          1) Realization of a society where people do not get involved in accidents
          2) Offering mobility products which enable all people to always enjoy the freedom of mobility.
          3) Creating travel time and cabin space that make mobility fun for people.

  • Concept of Honda’s automated driving.

          1) We strive to provide our customers with a sense of confidence and trust by offering automated driving that will keep vehicles away from any               dangerous situation and also not make people around the vehicle feel unsafe.
          2) By featuring smooth and natural driving characteristics, our automated driving vehicle will realize occupant comfort that gives the driver                    complete trust and provides a fun of mobility that makes people naturally want to go driving.

  • We are going to realize automated driving technologies for use on highways in 2020. And then, we will make them usable in a broader area including regular roads.
  • As for automated driving on highways, we are striving to realize an automated lane-changing function which enables the vehicle to drive in multiple lanes without any command from the driver. And we also are going to realize an automated driving function which will free the driver from the need to monitor their surroundings while the vehicle is experiencing traffic congestion.
  • Moreover, we will strive to achieve the technological establishment of “level 4” automated driving for personal car use by around 2025.

<<2030 Vision>>

1. Concept behind formulating the 2030 Vision

  • In order to quickly respond and overcome rapid changes in our business environment, we set the direction we will take next and establish it as our vision.
  • For Honda to continue to be a company society wants to exist even in the year 2050, when Honda will be more than 100 years old, we envisioned what we want Honda to look like in such a future. And based on that, we determined what we want to look like in the year 2030, and we summarized that as our 2030 Vision.

<Constitution of the 2030 Vision>
      1) Vision statement
      2) Corporate attitude
      3) Direction of our initiatives toward the fulfillment of the 2030 Vision
      4) Business viewpoint to focus on

2. Introduction of the 2030 Vision Statement
    We first clarified the two key elements of the Vision – the “universal passion of Honda” and the “strengths of Honda.”

<Universal passion of Honda>

  • Value proposition: To provide products and services that expand people’s dreams and potential.
  • Corporate attitude: Our approach to taking on new challenges while being driven by a strong passion to realize our value proposition.

<Strengths of Honda>

  • Existing strengths of Honda: 1) Strength in manufacturing a broad range of products including motorcycles, automobiles and power products and 2) earning 28 million customers per year in markets around the world.
  • New strengths: Our ability to create solutions, which includes both Mono-zukuri, the art of making things, and Koto-zukuri – which is creating new experiences through brand storytelling about the art of making things.
  • Through this integration of further advanced Mono-zukuri and Koto-zukuri, we will continue creating the strengths of Honda.

<2030 Vision Statement>

  • Two areas where we are going to create new value: 1) advancement of “mobility” and 2) value creation for people’s daily lives.
  • In these areas, we will bring the universal passion of Honda to “serve people worldwide with the joy of expanding their life’s potential.” And toward this end, we will “lead the advancement of mobility and enable people everywhere in the world to improve their daily lives.” This is our 2030 Vision Statement.

3. Direction of our initiatives toward the fulfillment of the 2030 Vision
<1) Creating value for “mobility” and “daily lives”>

  • We will focus on three areas, namely mobility, robotics, with a focus on AI, and energy solutions in order to provide people with the joy and freedom of mobility and the joy of making their lives better.

<2) Accommodate the different characteristics of people and society>

  • We will strive to further expand the joy of people by offering products and services that are optimized based on Honda’s desire to “utilize technology to help people, while putting people at the core.”

<3) Toward a clean and safe/secure society>

  • Striving to become No. 1 in the areas of the environment and safety, we will invest more resources in these areas. And we will strive to become a company that leads the effort to realize a carbon-free and collision-free society.

4. Business viewpoint to focus on

  • Toward the fulfillment of this Vision, we will transform and evolve our existing businesses and also create new value through efficient use of finite corporate resources. To this end, we identified three areas we will focus on, and we will utilize our corporate resources effectively and strengthen our business foundation.

<1) Inter-regional coordination and collaboration>

  • We will further enhance our inter-regional coordination and collaboration and increase the efficiency of our operations from a global perspective.
  • Toward this end, we will grow our global models strong, so that they will be well-received anywhere in the world. As for regional models, with consideration of customers needs in each region, multiple regions with similar customer needs will work together to realize common regional models with a high level of product strength. Through this initiative, we will strive to achieve more efficient business operations in each region.

<2) Collaboration for Open Innovation with third parties>

  • We will clarify what we should do on our own, and we will focus on that. At the same time, we will be proactive in engaging in Open Innovation with external partners.
  • Since its foundation, Honda’s strengths have been advantages in technologies and products centering around the powertrain and packaging, which includes internal combustion engines as well as more recent electrified vehicles. In addition, our business foundation established all around the world also has been one of our strengths.
  • Identifying “powertrain” and “packaging” as core Honda technologies, we would like to strengthen partnerships from the perspective of both Mono-zukuri (the art of making things) and Koto-zukuri (new experiences drawn from the art of making things) with our customers worldwide.

<3) Strengthening foundation of existing businesses>

  • We are going to strengthen our business foundation and ensure sustainable operations, especially with our automobile business, in order to solidify existing businesses.
  • We are currently moving forward with a project that will significantly advance Honda’s development system and capability. The special merit of Honda’s automobile development is our “SED development system,” where teams from development (R&D), production and sales work as one and form a project team to pursue product development. We will further advance this development system and introduce a new development process for Honda’s art of making automobiles, which will enable us to more efficiently create both products and services that appeal to people’s emotions.
  • As the first step of this initiative, we created a new planning division within Honda R&D called the Product and Perceived Quality Planning Division in October of last year. This is a planning team that ensures that our products feature “perceived quality” which is not easy to quantify.
  • In order to ensure that all of our automobile models consistently offer such “perceived value” to our customers, we are currently considering the introduction of modular strategies which include the sharing of parts and units.
  • We will newly establish an Automobile Cost Planning Division that will be in charge of comprehensive cost reduction by working closely among the divisions of Research & Development, Purchasing, and Production in addition to strengthening our capability in the area of cost planning.
  • Through those activities, we will aim for creating the attractive automobiles and achieving the comprehensive cost reduction by making both developing and producing new automobiles more efficient.
  • We will begin applying these initiatives starting from automobiles scheduled to go on sale in 2019.

5. Corporate attitude

  • For the fulfillment of our 2030 Vision, we will set the corporate attitude to “pursue growth through the pursuit of quality.” We will increase the quality of Honda products and services, and at the same time, we will increase the quality of our corporate activities, which we will carry out based on the strong principle that we want to please our customers.