Honda Motor Company (Japan)

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Western consumers know Honda mainly for its cars - it is the #3 Japanese auto manufacturer worldwide behind Toyota and Nissan. But throughout Asia the company is famed for the motorbikes on which the business was originally built. Honda is the world's leading bike manufacturer, selling almost 20 million of them in 2017, nearly four times the number of automobiles it shipped. In the car division, Honda's top models are the ever-popular Civic and the Accord, a huge hit for 40 years in America where it represents around 20% of the company's unit sales. Until the crisis which enveloped virtually all the world's auto manufacturers during 2008, Honda had demonstrated strong growth because of its emphasis on affordable, reliable, cheap-to-run vehicles. However it has lagged a little behind Toyota and Nissan in Western markets, partly because it offers a smaller passenger car range. One rare but significant misstep has been its inability to convert an early lead in hybrid fuel technology into actual sales. It aimed to make up for that error with an aggressive rollout of other hybrid models between 2009 and 2012. Honda is also a leader in what could become the next cutting edge alternative of hydrogen powered fuel cells.

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Adbrands Company Profiles provide a detailed analysis of the history and current operations of leading advertisers, agencies and brands worldwide, and include a critical summary which identifies key strengths and weaknesses. Adbrands Account Assignments tracks account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets. Subscribers may access the following website links:

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Brands

Honda Civic Honda ASIMO Robot
Acura Automobiles Honda Racing
Honda S2000 Honda Insight
Honda Motorcycles Honda Engines
Honda Power Equipment  Honda Finance
Honda HR-V Honda Marine

Recent stories from Adbrands Weekly Update:

Adbrands Social Media 9th Oct 2018: "See Where Different Takes You". Wieden & Kennedy London engages in some visual and aural word jazz for Honda with the assistance of rapper and artist Kojey Radical. It's not perhaps a jaw-dropping as some of the agency's other recent work for the carmaker, but striking nonetheless. In a shock decision earlier this year Honda actually moved their main account out of W&K into a new dedicated shop under the management of Japanese agency Hakuhodo. However, no work has yet materialised. W&K remain on board for special projects, and also, for the time being it seems, the main creative account as well.

Adbrands Weekly Update 4th Oct 2018: Honda is joining Japanese investor Softbank as a key supporter of GM Cruise, the self-driving technology being developed by General Motors. Honda will acquire will invest $2.75bn in the project, in return for a 6% stake. $750m is being paid now, with the rest in stages over the next decade. Softbank pledged $2.25bn earlier this year, for a near-20% stake in the venture. GM Cruise is being established as a separate standalone business in order to attract technology investors who are wary of the traditional automobile industry.

Adbrands Weekly Update 27th Sep 2018: Ads of the Week "Dreammakers: Jungle". It never ceases to amaze us how creatively interesting Honda's ads are all over the world, considering how boring their cars are. Here's a perfect example: the latest sponsorship ident from Wieden & Kennedy London for Honda's partnership with Channel 4 and Film On Four. Thankfully, W&K retained Honda's sponsorship duties in the handover of the main creative account to Hakuhodo. Sadly, it's only 23 seconds - let's hope a longer version is on its way in due course - but that's still 23 seconds of pure pleasure.

Adbrands Weekly Update 3rd May 2018: American companies aren't the only ones enjoying the benefits of US tax reforms. Honda reported record profits for the year to 2018 as a result of a near-$3bn one-off gain. Net attributable profits soared by 59% to the equivalent of $9.6bn. Pretax income, by comparison was up by only 11%. At the same time, exchange rates gave an additional lift to revenues which rose by almost 10% to the equivalent of $138.6bn.

Adbrands Weekly Update 5th Apr 2018: Honda confirmed the appointment of Japanese agency Hakuhodo as its new marketing partner across Europe, replacing a collection of different agencies including Wieden & Kennedy and McGarryBowen. A new dedicated unit, Hakuhodo Collective, is being assembled to manage the business, with personnel drawn from its various existing operations in Europe including Sid Lee in France, and Southpaw in the UK.


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Background

Free for all users | see full profile for current activities: In its current form, the company was founded just after the end of World War II by former mechanic Soichiro Honda. Previously, Honda had set up a bike repair shop in 1928, tinkering with motors as a hobby and building his first car around a discarded American airplane engine. Eventually he established a small factory, and during World War II made propellers for the Japanese airforce. In 1945, he sold the factory to Toyota, and set up a new firm converting bicycles into motorised scooters. His dream was to manufacture cheap bikes that would serve the new market of war-impoverished Japanese customers moving from their farms to cities in search of work. Business boomed and Honda began making its own motorbikes, starting with the E-Type Dream. By the early 1950s the company was responsible for almost three-quarters of Japanese motorcycle manufacturing.

Honda was quick to identify the US market as a key part of his gameplan. In 1959, the American Honda Motor Company set up shop in Los Angeles, importing Japanese-made motorcycles and targeting a clean-living, outdoors market, very different from the traditional US perception of bikers. A German outpost followed two years later. In 1963, the company branched out into automobiles, one of the last of the current Japanese manufacturers to do so, launching the S500 sports car and T360 light truck in the domestic market. To demonstrate the power of its own engines, Honda quickly established a Formula-1 racing division (teaming up successfully with the Williams and McLaren teams in the 1980s), and established subsidiaries in Europe, Latin America and Asia.

Honda launched its first US automobile in 1970, the N600 sedan, but the real leap forward came two years later with the launch of the Civic, designed to compete in the US market against Volkswagen's hugely successful Beetle. More important still was the launch of the Accord in 1976. The company sold more than a million Accords in the first four years of production. The Prelude followed in 1978. In 1979, Honda began making motorbikes in the US for the first time, followed by automobiles from 1982, becoming the first Japanese car company to establish a US manufacturing base. By 1988, the Ohio factory was exporting Accords for sale in Japan and by the mid-1990s the US factories were shipping out more than 100,000 automobiles round the world. By 2000, Honda was making more cars in the US than in Japan.

In Europe, the company set up a joint venture with Peugeot to make bikes in France, and formed an important alliance in the UK with British Leyland (later to become Rover) to begin technical cooperation. The state-owned British company had originally approached Honda in a bid to improve its productivity and quality, but the relationship developed rapidly after the UK government sold British Leyland to British Aerospace in 1988. In 1990, Honda UK and Rover tightened the bond by swapping 20% equity stakes in each other, and by 1993 the companies not only shared suppliers and technology but three out of Rover's four models depended on Japanese technology. Rover's 600 model was simply the Honda Accord with different bodywork. 

But British Aerospace was tiring off the car business, still struggling to achieve more than breakeven, and attempted to persuade its Japanese partner to buy the business. Honda declined, suggesting a 50:50 joint venture. As a result BAE turned around and made an agreement with BMW instead. Outraged, Honda warned that there was more to the two companies' working relationship than met the eye. At the time BMW dismissed this as sour grapes, but the German manufacturer was subsequently forced to concede that the problems at Rover were more serious than they had anticipated. 

Founder Soichiro Honda died in 1991, the same year the company celebrated the production of its 20 millionth car, and the same number of its leading Super Cub motorbike. See full profile for current activities


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