Big changes lie ahead for Honda as the Japanese company aims to streamline its global operations and make manufacturing more efficient.
The automaker announced that it will cut the number of model variants available in North America and other regions and reorganize its production base. Honda is pushing for improved efficiency as increasing investments in next-generation technologies take a toll on its profits. On May 8 Honda reported a 13 percent decline in fiscal full-year operating profit.
Also read: Honda Wants To Electrify Its Entire European Range By 2025
In a speech on the company’s business direction, Honda CEO Takahiro Hachigo said the carmaker will also launch a new vehicle platform next year and roll out its two-motor hybrid system across the entire range. He said global models such as the Fit/Jazz subcompact, Civic compact, Accord midsize sedan, HR-V/Vezel subcompact SUV and CR-V compact SUV will represent a third of the present model variations, by 2025. These global nameplates currently account for 60 percent of Honda’s global automobile sales.
The automaker’s CEO stressed that Honda won’t reduce the number of nameplates, just the number of trim options. For example, variations in color combinations and control panel layouts will need to be reduced. As for regional nameplates, such as the N Series for Japan, Pilot for North America, and Crider for China, they will also be consolidated to streamline production and product development. In the future, Honda will merge some of its regional models into new models shared across multiple regions.
Honda also wants to simplify model allocation at its plants, including those in North America. The target is to achieve 100 percent capacity utilization worldwide by 2020 — up from 90 percent currently. As a result, the company aims to reduce global production costs by 10 percent by 2025, compared with 2018 levels.
Honda’s global architecture launching in 2020 will also help the company cut costs. Takahiro Hachigo said the new platform, dubbed the Honda Architecture, will debut in a global model that the automaker will launch next year. He did not offer additional details but said the models based on the new platform will share about 70 percent of the components that customers don’t see, such as the engine bay, passenger cabin, and rear storage. Obviously, the exterior and interior designs will be different depending on the model.
The new platform will also help Honda cut the number of man-hours allocated to the development of mass-produced vehicles by 30 percent by 2025. The work will be repurposed for research and development of vehicles with next-generation technologies.
Finally, Honda CEO Takahiro Hachigo said the company will step up the rollout of electrified vehicles by deploying its two-motor i-MMD (Intelligent Multi-Mode Drive) hybrid system across the entire vehicle range. The automaker has also developed a more compact i-MMD system for small cars that will debut in the redesigned Fit/Jazz subcompact model at the 2019 Tokyo Motor Show.
By 2030, Honda aims to electrify two-thirds of its global lineup.