Honda details cost-saving measures, electrification strategy
Honda will funnel the money it saves into its R&D department.
Honda is the latest automaker to announce a series of sweeping changes implemented to slash operating costs. Company CEO Takahiro Hachigo outlined what the brand's future has in store in a speech.
Hachigo explained global models like the Civic, the Accord, the CR-V, the Fit, and the HR-V represent 60 percent of the company's annual sales. While an American-spec Civic looks a lot like a European- or a Japanese-spec model, it's available with different options, and buyers can choose from an array of region-specific trim levels that add or delete various features. To streamline its manufacturing process, Honda will eliminate two-thirds of the trim levels and options it offers globally by 2025.
Honda also plans to slash the number of model-specific parts in its portfolio by sharing components between vehicle lines when possible. It has already started applying this new way of thinking to the development of what Hachigo referred to as a new global model that's expected to make its debut in 2020. Again by 2025, Honda hopes sharing major parts across model lines will help it significantly reduce the amount of time and money it takes to develop a new model. It will funnel the resources saved to its research and development department. "In this way, we can continue creating new technologies which will support the future of Honda," Hachigo commented.
The Japanese firm remains committed to electrification. It wants electrified model to represent two-thirds of its sales by 2030, and it's betting on hybrid technology to achieve that goal. Every member of its line-up will be available with a variation of its two-motor gasoline-electric powertrain, including smaller cars. The next-generation Fit scheduled to make its debut this fall at the Tokyo auto show will inaugurate a small car-specific version of Honda's hybrid technology.
Honda is also committed to EVs. Its first purpose-designed electric car, the E ( pictured), will go on sale in Japan and in Europe in the not-too-distant future. It was previewed by a close-to-production prototype displayed at the 2019 Geneva auto show. The E won't be sold in the United States, likely due to its small size, but Honda confirmed it wants to develop electric cars for the American market.
"In North America, we will jointly develop battery components with General Motors and introduce highly-competitive battery EVs in the market," Hachigo said.
Photo by Ronan Glon.