Honda focuses on R&D, Unique and Fuel-efficient Cars

[gmsickofan]

Honda focuses on R&D to keep its creative edge

Carmaker to focus on unique and fuel-efficient cars as competition in that area increases.
By Chang-Ran Kim / Reuters
Monday, April 4, 2005

TOKYO -- Since it began knocking together motorbikes at the end of the Second World War, Honda Motor Co. has striven to keep pace with bigger and wealthier auto makers by its creativity and focus on innovative technology.

Now, more than ever, Japan's number-three car maker says a renewed drive to bring its R&D and production operations closer together are crucial to thriving in an industry where the race to develop unique and fuel-efficient cars has intensified.

"We're at a critical juncture where we have to really fortify the link between R&D and production," said Motoatsu Shiraishi, a senior executive who took over Honda's R&D unit last Friday.

"For example, when hybrid and fuel-cell cars become more common, it won't be enough to come up with a better product at the research level. We have to make it commercially viable when it's mass-produced," he said in a recent interview.

On the research front, Honda, ranked eighth in the world in car sales volume, is well ahead of the pack.

In 1999, the maker of the popular Accord saloon released the U.S. market's first gasoline-electric hybrid car; most rivals have yet to offer one. It is also alone with a marketable fuel-cell vehicle that can be driven in freezing temperatures.

But as rivals gear up to bring their next-generation cars to market, Honda expects to face heightened competition. While most of its peers have formed capital and technical ties to speed up development, Honda has, typically, chosen to go it alone.

That independence means Honda can't reap the kind of cost savings that Nissan Motor enjoys by buying common parts with partner Renault to take on General Motors, Toyota and others.

"We are small and weak when it comes to scale. A company like ours has to compete by staying one step ahead of the rest in the field of technology," Shiraishi said, stressing that a closer link between R&D and production was a must.

His posting as president of Honda R&D is a case in point.

The 58-year-old Aichi native has spent all of his 36 Honda years in production engineering. He now replaces Takanobu Ito, who switches to head production at the Suzuka factory, Honda's biggest in Japan.

For Honda, the R&D field has never been too broad. It famously dabbles in jet engines and humanoid robots, while also conducting research into bio-fuels and solar power, among others.

While Honda has done well business-wise -- it has never posted a loss and is valued at $48 billion, second only to Toyota in the global auto industry -- some critics have wondered whether the quirky carmaker is spreading its resources too thinly.

But insiders point out that Honda's R&D spending is comparable to rivals', at around 5 percent of revenues. More importantly, the outlays yield dividends for its core motorcycle and car making businesses, they say.

As cars become more computerised, the technological know-how gained from developing robots -- such as voice and visual recognition skills -- comes in handy; the aircraft business gives Honda valuable insight into reducing the weight of cars.

That kind of edge and creativity are crucial for Honda, whose car business lacks the broad engine or chassis line-up to compete head on with bigger and deeper-pocketed rivals.

Kunimichi Odagaki, a senior official at Honda R&D and creator of the Odyssey, says that as an engineer, there's a certain sense of satisfaction from being imitated by a rival.

"But for competition's sake, it's also important to develop something that can't easily be copied," he added.

Article: http://www.detnews.com/2005/autosins...tos-138740.htm