JAPAN'S HONDA: INTO THE FAST LANE. It's selling US-made Accords back home as it sets out to become a truly global company
AT Honda's sprawling Suzuka factory, a white-jacketed worker puts the finishing touches on a bright red Integra. Across the ocean, in Marysville, Ohio, another Honda worker drives a gleaming Accord Coupe off the line. The two cars could well cross paths somewhere in the middle of the Pacific, as the Integra heads to an American dealer and the Accord to a Japanese showroom.Skip to next paragraph
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Honda's decision to export its American-made cars to Japan and elsewhere seems at first a stunt aimed at attracting favorable publicity in the United States, but Honda insists that it is a natural consequence of its corporate philosophy of looking at the world market as one. This outlook, Honda officials say, has governed the company since its early days when its entrepreneur founder, Soichiro Honda, began making motorcycle engines in 1946.
``Mr. Honda said that without becoming a worldwide company, you cannot become a winner,'' recalls senior managing director Tetsuo Chino. ``So in our organization, the world-oriented mind is very important. We treat the Japanese market as just one of the world markets.''
Honda represents the leading edge of a trend toward multinationalization among Japanese corporations.
It was among the first to move plants overseas to get closer to their markets. Honda set up a motorcycle- and then an auto-production facility in the US long before the threat of protectionism and the high yen made that an obvious move.
With this latest decision, Honda appears to be entering the next stage of multinationalism: creating an international division of labor to make products that are marketed globally.
``These are steps in Honda's plan to establish a truly global network,'' announced Tadashi Kume, president of Honda Motor Company, at a New Year's press conference.
Honda started setting up overseas plants in the early 1960s, and the company now has 65 plants in 34 countries, making products from portable generators and motorcycles to automobiles.
Critics argue that Honda's globalism is simply a case of making a virtue out of a necessity. Honda did not start making four-wheeled vehicles until 1963, when auto giants Toyota and Nissan already dominated the domestic market.
From the beginning Honda looked to foreign markets, particularly the US, where it already had extensive experience selling its motorcycles. Honda's experience is similar to that of electronics leader Sony.
Both are ``postwar'' companies, founded by strong-willed men who came from outside the prewar structure of zaibatsu, or large conglomerates. They have built their markets by producing high-quality new products that often define entirely new markets.
``Honda's evolution reflects an exceptionally clearsighted management,'' writes Geoffrey Wilkinson, a Tokyo-based industry analyst with the American securities firm Salomon Brothers.
``Throughout its history, Honda has demonstrated a willingness to take radical steps in pursuit of growth,'' he says.
This has been exemplified, he says, by Honda's engineering triumphs, such as the low-emission, fuel-efficient CVCC engine, which was built to penetrate the US auto market in the energy crisis of the 1970s.
Honda's popularity has been built on its reputation for superior engineering and styling.
``Its evolutional styling comes from its global perspective,'' says Benjamin Moyer, an analyst in Merrill Lynch's Tokyo office.
``Honda is the only Japanese company which designs a new model based on what can attract consumers of the world,'' Mr. Moyer says. ``Most Japanese carmakers only think about the Japanese market first, and then target the foreign market with domestically popular models.''