Soichiro Honda Had A Great Interest In Automobiles Commerce Essay

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From a young age (7), Soichiro Honda had a great interest in automobiles. He worked as a mechanic at a Japanese tuning shop, A self-taught engineer, he later worked on a piston design which he hoped to sell to Toyota. The first drafts of his design were rejected, and Soichiro worked painstakingly to perfect the design, even going back to school and pawning his wife's jewelry for collateral.

Eventually, he won a contract with Toyota and built a factory to construct pistons for them, which was destroyed in an earthquake. Due to a gas shortage during World War II, Honda was unable to use his car, and his novel idea of attaching a small engine to his bicycle attracted much curiosity. He then established the Honda Technical Research Institute in Hamamatsu, Japan, to develop and produce small 2-cycle motorbike engines. Calling upon 18,000 bicycle shop owners across Japan to take part in revitalizing a nation torn apart by war, Soichiro received enough capital to engineer his first motorcycle, the Honda Cub. This marked the beginning of Honda Motor Company, who would grow a short time later to be the world's largest manufacturer of motorcycles by 1964.


Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan.

The company was incorporated on November --, 1992 and joint venture agreement was signed on August ---, 1993. The ground breaking ceremony was held on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was completed. The first car rolled off the assembly line on May 26, 1994. Official inauguration was done by President of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr.Kawamoto, President of Honda Motor Company Limited Japan was also present to grace the occasion. The company is listed on Karachi, Lahore and Islamabad Stock Exchanges.


Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan.The company was incorporated in 1992 and joint venture agreement was signed in 1993. The ground breaking ceremony was held on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was completed.

The first car rolled off the assembly line on May 26, 1994. The company is listed on Karachi, Lahore and Islamabad Stock Exchanges.On July 14, 1994, car bookings started at six dealerships in Karachi, Lahore, and Islamabad.

Since then the DealershipsHYPERLINK "" HYPERLINK ""Network has expanded and now the company has sixteen 3S (Sales, Service and Spare Parts) and thirty 2S (Service and Spare Parts) Pit stops network in all major cities of Pakistan.

Honda Atlas Cars (Pakistan) Limited has Dealership Network covering all of Pakistan, and Dealership are equipped with all the facilities a modern dealership should have. The facilities include Sale, Service and Spare parts.


"We see the world not as it is, but as it could be."


We see the world through the eyes of dreamers. Because we are a company founded by a dreamer. And we are a company built on dreams.


We see the pursuit of impossible dreams as an empowering force, capable of producing revolutionary ideas. Dreams inspire us to create innovative products that enhance human mobility and benefit society. Honda encourages all of its associates to pursue their dreams. And it's our mission to share these dreams with others and to make them a reality.


We see "The Power of Dreams" as a way of thinking that guides us and pushes us forward. The strength of our company comes from this philosophy - which is based on the visionary principles of our founder, Soichiro Honda.


We see things from a global perspective, always striving to create and produce products of the highest quality at a reasonable price for worldwide customer satisfaction. The power of Honda's dreams will continue to lead to new insights and technologies in automobiles, motorcycles, power products, parts and other fields of mobility.


We see it as our responsibility to serve humanity through our global commitments to helping protect the environment and enhancing safety in a mobile society. In every endeavor we pursue, we strive to be a company that people all over the world want to exist.


We see a bright future fueled by the Power of Dreams. Can you see it, too?

Company Philosophy:

Dynamic Manufacturing and marketing of prestigious products to the entire satisfaction of customers.

Create ideal working environment for continuous development of product and personnel.

Provide adequate return to shareholders and fulfil corporate civic and fulfil corporate civic obligations.

Image of Company:

Zero line stop and zero defect.

No.1 customer satisfaction

Fair rules.

Profitable organization

Market leader.

Respect for all.

Self reliant, exceeding the goal.

Open and frank atmosphere.

Believe in originality

Encourage localization

Environment friendly

Environment conditions

Honda conducts its businesses in Pakistan and throughout the world (including North America, Europe and Asia). A continued economic slowdown, recession and the sustained loss of consumer confidence in these markets, which may be caused by rising fuel prices or other factors, could trigger a decline in demand for automobiles, motorcycles and power products that may adversely affect Honda's results of operations U.S financial crisis has affected the economics over the world.

Some commentators argue that Pakistan is already in recession-an appraisal that was reinforced by the biggest fall in five years in corporate capital spending for the last quarter of 2008. Shares in Pakistani manufacturing corporations dropped sharply. Not only Honda lost 4.1 percent but also Toyota lost 5.1 percent too


The competitors of HONDA includes all the local and foreign Cars manufacturers including






Major type of competition:

Brand competition TOYOTA, MITSUBUSHI.

Product Competition Other automotive manufactures.

Generic Competition Rental cars, motor bikes, bicycles.

Totals Budget Competition Vacations, Debit Reduction, Home remodeling.


In this globally competitive business world, every firm has to face many challenges, and Honda does, too. There are four common challenges that Honda has to face: problems that cannot be solved, managing intangibles, managing diversity, and addressing new issues for which managers and organization are ill-prepared.

SWOT Analysis



Brand name image

Smoother drive as compared to competitors

Market leadership - Enjoying 56% share in motorcycles.

Efficient performance


Quality - ISO Certification

Easy availability of Spare Parts

Strong asset position/increased profits with each year

High resale value

Low maintenance costs

Technical expertise - Benchmarking Honda, Japan.


Reasonable price of genuine parts

Cheap maintenance


Successful Promotional campaigns via TV and Newspaper channels enjoying extensive viewer ship


Management/non-management work as a single unit, as a team

Highly loyal, committed and motivated employees

Hardworking, experienced and qualified staff

Technological and managerial know-how

Job evaluation which is totally performance based, gives staff incentive to work harder each time

Bonuses and reward system for employees

Trainings given to dealers, motorcycle mechanics and users


TQM principles practiced in work processes

Kaizen (continuous improvement) principle in all processes

State of art plants and equipment

ISO 9002 certified

Physical Environment

Frank and congenial work environment

Positive work climate and organization culture - single code of dress supports to maintain discrimination free work environment


Customer loyalty

Old and established brand name

Safety guidance given to customers.


After sales customer service not up to the level actually expected by the customer.

Less of a proactive approach to different matters, reactive approach applied more

Limited investment in high technology equipment

Price higher than prevailing competition in market, which gives customer thoughts about nearest substitutes available

Bike launching new features as those of new entrants in market

From customer point of view, in case brand is unavailable for a long time, high pending level allows customer to switch brand

Credit availability schemes no well managed and customer not informed about them

Customer conscious of bike as a status symbol refrain from buying available Honda brands. It is considered more of a family bike

No safety measures installed in bikes against snatching dilemma.


Growing motorcycle market - Estimated bikes 500,000 by the end of 2007 compared to 300,000 in 2005/2006

Customers realizing quality matters, as problems are already cropping up in new entrants models

Initiatives and proposals in process for coping with increased demand of bikes

Newer segments introduced with entry of new models, design, which still have huge potential for growth

Karachi, a segment which has tremendous potential for growth and profitability.


Many new features inherent in latest bike models increasing customer expectations a great deal for the future.

Crucial economic conditions of Pakistan can lead to the decreased sales.

WTO (World trade Order) opening local markets for global competition

Competitors launching newer models with stress on reduced price for our price-sensitive economy proving serious threat in near future

Theft and snatching of bikes increasing, reaching 2500 bikes in period of January -May 2007.

Management strategies and approaches

Enterprise Strategy

The Mission Statement of Honda is try to maintain a global point of view, with the dedication to supply the highest quality products at a reasonable price for worldwide customer satisfaction.

Moreover, taking new challenges with the pursuit of Initiative, Technology and Quality, Honda is pursuing their 2010 Vision: Striving to be a company society wants to exist through creating new value, globalization, and commitment for the future.

Business Strategy

R&D is sharpening the business advantage of Honda, together with the fierce competition between Honda and competitors, and they all define the B u s i n es s S t r a t e g y of Honda. One of the proudest things about Honda is its R&D system. With the systematic way of approaching, focus on durability, reliability and basic performance to establish a creative and innovative technical foundation. With the wisely approach to the future, the Honda products do care about the economical, environmental, and social issues - This leads to a increase steady in Pakistan recently meanwhile the whole industry is going down by some external factors such as depreciation, Oil price raising, political recession … etc

Honda is keeping involving in the research and development that benefit people in the future through leading-edge technology and commitment to innovation that opens up new possibilities in mobility.The dealership of Honda is also one of its strengths. Through creating products and services that provide the core values that make Honda unique, the Honda's associates around the world keep creating such inspiring experience for its customer.

Honda put heartfelt endeavors into services, responding to changing values and increasingly complicated needs of customer . Its services focus on improving customer relations, with friendly and attentive sales, responsive service support, thorough maintenance and repairs. Honda began unifying its multiple dealership channels into a single Honda sales channel, seeking to strengthen the Honda brand, enhance customer satisfaction, and help ensure lifetime customer loyalty.

The manufacturing and distributing system of Honda are also sources for the succession of Honda. With the global network, Honda's global strategies somehow include the globalization characteristic. Honda has established independent local operation in Pakistan and pushed local autonomy and proactive efforts to localize the needs regional with mutual understanding. The competition between Honda and others speed up year by year. This is somehow carry the win/lose characteristic.

Planning And Development

Currently, Honda Atlas Cars (Pakistan) Limited is not in a position to make major changes in its cars. Only minor changes can be made here and decisions about these changes are made at the top level. Marketing & Production people play an important role in this regard.

Research & Development Department:

The role of research and development is to introduce innovative ways to achieve the objectives especially through production facilities. Unfortunately, there is no research and development department in HACPL. This function is performed by Honda Motor Company, Japan. All major changes in models of Honda cars are introduced there. Employees of HACPL are sent to Japan, where they are trained according to new conditions. Later on, these changes are introduced in the models offered in Pakistan.

Deletion Programme:

"Deletion is to replace the imported parts of vehicles with the parts either manufactured in house or purchased through local vender industries."

Honda Atlas Cars (Pakistan) Limited is pursuing a realistic and progressive deletion programme for indigenisation of assemblies, parts and components. This dynamics programme is being implemented through in-house assemblies and manufacturing operations, and is being supplemented by vendor development.

HACPL is almost same as that of its major competitor, i.e. the manufacturer of Toyota Cars. Efforts are being made by top management to increase this percentage.

Achievement of Objectives through Operations:

The production department of HACPL is playing a vital role in achieving the overall objectives of the company through efficient utilization of resources.

HACPL is achieving production efficiency through:

Evaluation & improvement of quality control.

Training of production employees.

Modernization of plant and machinery.

Similarly cost minimization objective is being achieved through:

Deletion programme

Avoiding poor quality products, which are a loss for the company. As mentioned earlier, HACPL is achieving excellent quality levels through giving training to personal plus proper use of technology.

Total Quality Management

Total Quality Management: (T.Q.M.)

T.Q.M. stresses three principles:

Customer Satisfaction

Employee Involvement

Continuous Improvement

Attaining quality in all areas of a business is a difficult task. It is necessary for an organization to provide its customers with best or even consistent quality products in order to survive in the environment. The success of any business depends upon how accurately the company perceives the expectations of Customers plus its ability to bridge the gap between consumer expectations & operating capabilities.

Customer Satisfaction:

HACPL's employees try at their level best in satisfying the customers & hence stepping forwards the objective of the company. The contribution of Marketing & Production department is very important in this regard. These departments continuously go for the ways to improve the features of existing HACPL's products and hence satisfying the customers.

Employee Involvement:

HACPL's management considers its employees a great asset. The employees along with sales dealers are part of the large "Honda Family" and they form an integral part of policies and decisions that help shape the future of the company.

The management of HACPL considers the proposals/Suggestions of its employees up to a great extent. It appreciate the employees in this regard through Monetary or Non Monetary benefits. Management of HACPL put great emphasis on creating and maintaining an enterprise environment in the company that maximizes the interest and motivations of its employees which is very vital to enhance labour productivity and efficiency.

Training of Personnel:

HACPL puts great emphasis on training and development of employees to help them realize their full potential. Employees from all departments especially form production, finance and marketing attend training courses in their respective fields. This has greatly contributed in improving employees performance and efficiency at all level.

Continuous Improvement:

The Management of HACPL has a view of continuous improvement in order for the better Utilization of resources and improving Honda brand image in the market. HACPL is trying at its level best to introduce and implement better quality control procedures, redesigning the production process, automating the whole plant etc. Employees involvement is playing vital role in this regard.


Efforts should be made to reduce the cost of Honda cars.

There should be more coordination between HACPL and its suppliers.

A low-priced model should be introduced to capture the market share of SUZUKI.

Deletion programme should be implemented rapidly.

Although HACPL has taken some steps for environmental protection, more efforts should be made in this regard.

The dealership network should be widened.

Employees should be encouraged to give suggestions.

Some sort of research should be done at HACPL.

Efforts should be made for better utilization of capacity.