TALK FROM THE TOP: Hachigo steers back-to-basics strategy at Honda

Hachigo steers back-to-basics strategy at Honda

Honda is on the rebound, and CEO Takahiro Hachigo is pushing a back-to-basics strategy to stoke the momentum.

TOKYO — Takahiro Hachigo took over as Honda Motor Co. CEO last June as the company was recovering from several body blows.

The carmaker’s reputation had slumped to ho-hum, with critics less than enthused by some recent products. It was broadsided by the global recall of millions of vehicles to replace faulty Takata airbags. And a series of recalls of the redesigned Honda Fit prompted a global r&d overhaul.

But Honda is on the rebound, and the veteran engineer is pushing a back-to-basics strategy to stoke the momentum.

Hachigo, 56, spoke through an interpreter Oct. 26 with News Editor James B. Treece, Asia Editor Hans Greimel and Staff Reporter David Undercoffler about his thoughts on alliances, Acura and autonomous driving.

Q: Honda is staging a comeback with fun-to-drive cars, but it has been said that it lost its way in recent years. What happened?

A: As a result of the recession, sales went down. Because we had to stop the bleeding, we came up with various solutions. My predecessor, [CEO Takanobu] Ito, took various measures to make this happen, including the termination of some models that were under development. In parallel, we focused on six regions worldwide, including emerging markets, and tried to ensure that these businesses became more autonomous.

What role does North America play in this strategy?

North America should lead the way in building such regional autonomy. As a result, our American r&d branch started to promote and develop various models.

Even prior to that, within Honda, we had the feeling some products lacked Honda’s unique originality. Therefore, we thought models developed in North America should emphasize fun features. Meanwhile, other regions — India, China, Thailand — were becoming capable of developing their own cars.

We started new initiatives. But it takes around three years to develop new cars. So, finally, we are now starting to see the fruits of the efforts.

Honda once envisioned global sales of 6 million by 2017. But you swore off volume goals. How important is volume?

The 6 million units was not a sales target. Instead, the initial thinking was we wanted to become a company that had that kind of scale.

The world economic situation changed unexpectedly. As a result, we could not achieve that initial sales volume. When I became president, I said rather than focus on volume, we should put top priority on delivering good products. If we do that, the volume will follow.

Is 6 million enough scale for Honda to remain independent?

In the past, there was talk that unless you achieve 4 million units globally you were not going to be able to survive.

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