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Honda completed

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Honda completed

  1. 1. Group 6
  2. 2.  Est. 1948 with headquarters in Tokyo, Japan Moto cycles, automobiles, power products Principles- Respect for the individuals and three Joys
  3. 3.  Great market potential, automobile industry was booming in china Rapid increase in- Internal demand Vehicle production Exports Imports
  4. 4.  Equity participation by foreign automakers was restricted to 50% Separate sales channels for vehicle made in china, for those imported, and those manufactured by joint venturesNew Rules: Equity participation was same Min investment in a new project: US$ 292 million Min investment in R&D: US$ 73 million
  5. 5.  Highly fragmented market 80% were buying their first car In tier one cities- sporty and hatchback automobiles were preferred Other cities-branded automobiles were preferred Emotional factors Intangible attribute rather than tangible attributes such as fuel efficiency or engine equality
  6. 6.  An automobile that appealed not only to buyers with traditional brand association but also to modern consumers looking for individuality in their cars Word of mouth marketing through internet portal Chinese government subsidies- fuel prices in china were low, so luxury cars were affordable Strong cultural link between automobiles and social status
  7. 7.  Joint venture between Chinese companies & internationally recognized automakers Local automakers producing proprietary branded cars Competition from Toyota, GM and VolkswagenSuccess of Volkswagen- success of its joint venture in china - Product mix of not only traditional models but also modern modelsSuccess of Local automakers- They received a big boost from the Chinese government
  8. 8.  Invention and new Product development centre to honda’s culture Almost 5%revenue budgeted for R&D Honda R&D co. founded 1960, had been separate org. True sources of Honda were technology and innovation and hence independent financing for R&D. Same white uniform, for all to symbolize equality. Honda segmented its markets for growth, exemplified by Element Project, targeted for growth in Light truck market. Concept development team in US, in 1998, to create designs for target users at affordablw price.
  9. 9.  Observations from X-games supplemented traditional Market research for producing coherent profile of target users, with strong cohort identification, social behavior support for social ad environmental causes. Observations translated to designs, converted to products and tested. Driving performance, safety and value as themes were converted into key subsystem. To meet needs of local customers, R&D centers set up in various parts of world I Japan, North America, S. America, Europe, China and Asia. Headquartered in Japan. Set up HSV, Honda Strategic Venture Invested in technology venture companies to which had synergy with long term R&D strategy.
  10. 10.  Since economic development from 1980, JV and Wholly owned companies had 2 conflicting interests. JV relied on Foreign capital for branding and technology, while whole ownership provided full control on R&D, and branding. Phenomenon seen globally. Japan and S. Korea refused the JV model, Latin American countries allowed for the same. Top auto makers like VW, ford, GM who entered market, set up R&D labs with high education inst. GM was Leader among global automakers in R&D. However all RD facilities by international carmakers, focused on either improving specific technologies or tailoring international models to Chinese market, as opposed to CORE TECHNOLOGIES.
  11. 11.  Establishment of GHRD, and Li Nian, Honda was first automaker to develop products under original brand through JV in china. Guangnzhou Honda automobile Guangnzhou automobile and Honda, a JV, with 50%partnership, for 30 years. 5 other Honda affiliates, Japanese suppliers and additional 11 honda related factories opened up in Guangnzhou. Principle was “less input, faster output, and rolling development.
  12. 12.  Guangzhou Honda developed GHRD, as JV as independent juridical entity in china. Independent legal identity so as to create favorable R&D environment, free from daily sales and production activities. Hoped to become INSPIRING , free energetic, and open research environment. Purpose was to become a whole car R&D centre. Public interest had risen to develop proprietary brands. GM, VW and others pledged for the same, and developed many improved and MADE in CHINA models.
  13. 13.  But core technologies were still controlled by foreign manufacturers rather than Chineese partners. Hence GHRD was pioneer in china. GHRD had 2 R&D systems:: technological research and Product Development. R&D staff would step in shoes of Customer and to examine development trends, lifestyle, and preferences, GHRD planned to recruit talents from china and overseas to create advanced technologies, and products for Chinese society. Environment characterized by open and free discussion was encouraged to develop hih quality and creative products. Entertainment facilities built for leisure o staff.
  14. 14.  Li Nian represented a brand that will continue to pursue lofty ideals with a challenging spirt. Li Nian meant a dynamic, stylish and high quality life for a new generation. GHRD responsible to develop Li Nian, with Honda Motors, Japan. Core technologies of Li Nian was of GH, and sold via GH sales network in contrast to oters, Though Li Nian targeted to Chinese customers, but it sought to be a top international automobile brand. Li Nian was to be supported by honda’s technologies and meet its quality standards.

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