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Product and Brand Management

Group 7

Ambady J S 1501003 | Rahul Das 1501030 | Sathiya Singh 1501039 | Akhil Shan 1501063

Honda Today
Honda Motors Co. is the 10th biggest automobile manufacturer in the world with a production of 1.3
million units in 1998. Honda is renowned for its engineering excellence and its tenacious striving for
improvement. The micromini car market in Japan constitutes 4.1% of the car market in Japan, out of
which, 13.3% market share is held by Honda. Till 1988, microminis enjoyed a number of advantages
such as exemption from parking restrictions and tax law benefits.
Current Challenges
Changing environment: Rumours of a tax reform package to be effective from 1989 affects the
micromini segment directly as it plans to take away the advantages enjoyed by the vehicles. In its wake,
Japan Automobile Manufacturers Association (JAMA) has come up with recommendations to increase
engine displacement in the range of 650-690cc, which will directly affect Honda Today which has
engine displacement of 550cc.
Details: With the new tax laws, Honda Today will require a new engine design whose prototype options
needs to be completed within a month. This requires detailed design, experimentation and data gathering
on a large scale.
Time pressure: The estimated time for a minor development project of a scale which Today requires
is around 18 months. The tax laws are to be rolled out within 12 months.
Investment: Honda had spent 5 billion yen in revamping Today for its introduction in February 1988
and it is not justifiable to spend another 1.5 to 5 billion yen just months after.
Characteristics of Hondas Product Development
Product Quality: Unlike most automobile companies where engineers work exclusively in their
functional subspecialty, Hondas teams were assigned to individual products. The independent and
focussed organizational system helped Honda attain engineering excellence, winning several awards
for its product quality.
Development capability: Honda is involved in concurrent engineering, i.e., a new engine is developed
for a new car. In order to get the perfect body-chassis-engine match, engineers refine, reoptimize and
redesign continuously.
Customer preferences through emerging trends: Honda involves in minimal market research. In
order to understand new customer needs and preferences, Honda studies the emerging trends in the
markets and combines it with technical excellence.
Kamikuras options and Recommendation
While choosing between the four options available, Kamikura has to keep in mind the considerations
such as the extra investment which will be required, the project timeline which is extremely limited and
the engineering talent and resources which is being requested for other projects. Out of the four available
options, cylinder bore expansion is regarded as the easiest and cheapest as it would need relatively
minor tooling changes in machining process and an additional investment of 500 million yen.
The usual product development process which Honda follows (i.e., the concurrent engineering
developing new engine altogether) involves a lot of time and investment which Honda does not have at
its disposal. With MOT tax looming up within 12 months, this usual process will leave Honda far behind
in the race with its competitors.
The cylinder bore diameter increase, thereby changing the stroke/bore ratio from 0.95 to 0.87, is
expected to lower the fuel economy slightly. Nevertheless, this change results in an increased
horsepower than the previous engine version and Honda could market Today emphasising on the higher
power and torque.