Japan: Honda’s New Wheels

In the whizzy world of two-wheeled transportation, Honda Motors Co. of Japan has long since lapped the field. Honda’s U.S. export models are the fastest selling numbers since the salad day of the Harley-Davidson. Its cycles take home most of the prizes in international racing. Its new, lightweight “Little Honda” motor bike sells like soy sauce in Japan, will be introduced in the U.S. next year at about $100. And now the world’s largest motorcycle manufacturer is tooling up for a sharp turn into the international auto market.

This month Honda announces production of a 500-cc. midget car that will be available in Japan, Europe and the U.S. Early next year, the company plans to enter its 5800 sports car in the U.S. and European markets. Convertible and hardtop versions of the S-800, a small, four-cylinder, four-carburetor model that resembles the Austin-Healey Sprite, will sell for slightly less than $2,000 in the U.S. The pint-sized Honda 500 will cost about $1,100, will compare with British Motors’ Mini Minor and the Fiat 600. Both the 5800 and the 500 derive from a four-cylinder Honda Formula II racer that won all ten of its Grand Prix starts this year.

Shacho-San Is Oya)!. The man behind the company’s success is 60-year-old Shacho-san (President) Soichiro Honda, who thinks of his racing-car engines as “moving laboratories.” Honda, the eldest of seven sons of an impoverished blacksmith, grew up in a tiny village 140 miles southwest of Tokyo, dropped out of school at 13, developed an early interest in engines. He opened his own auto repair shop at 22, raced cars, set national speed records, then quit the track at 31 after a serious smashup. Recuperating from his injuries, Honda conceived plans for his own motor company, soon began manufacturing piston rings for autos, naval vessels and planes.

At the close of World War II, he bought up small surplus army engines that had been used to operate communications equipment, adapted them for Honda-built power bikes that ran on fuel extracted from pine roots. When the supply of engines dwindled, Honda began building his own, and the groundwork for the present-day company was completed. Honda incorporated in 1948 with working capital of $2,777 and 34 employees. Cycle sales accelerated, the company grew, but Honda quickly tired of administrative and marketing chores, eventually turned them over to Takeo Fujisawa, an intense sales executive who has since risen to vice president and managing director of the company.

Honda now spends all his time and energy perfecting products in the company’s research and development labs on the outskirts of Tokyo. Balding, quick to laugh, he wears a white mechanic’s coat, eats in the company cafeteria with subordinates who affectionately call him Oyaji (Pop). “When I am wearing the white coat,” says Honda, “I’m just one of the employees.” Although Honda retains a controlling 7% of the company’s stock, his only contact with the downtown Tokyo office is a monthly telephone conversation with Fujisawa, “to decide policy” that usually lasts five minutes. Although they have worked closely together for 19 years, the two executives rarely relax with one another outside the office. Honda likes to spend his spare time golfing, while Fujisawa is an enthusiastic bowler.

Something Alive. The unusual managerial approach has paid off. With five plants in Japan, a joint venture in Thailand, and subsidiaries in seven foreign countries, Honda reported $331.6 million in sales for the year ending Aug. 31, up $15.4 million from fiscal ’65. Net profits are up $3,500,000 for the same period. In addition to cycles and cars, Honda produces a profitable range of products including small trucks, multipurpose engines, portable generators, power tillers, outboard motors and lawn mowers. Honda’s plans for the future include a full range of automobiles and an airplane engine.

Motorcycles still account for 80% of the company’s sales, and their throaty purr is the sound the Shacho-san loves best. “Driving a car,” says Honda, straddling one of his new motor bikes, “is like sitting in a living room. Driving a motorcycle is like controlling something almost alive.”