Honda keeps step ahead of the pack

Honda’s ASIMO robot

TOKYO - Since it began knocking together motorbikes at the end of World War Two, Honda has striven to keep pace with bigger and wealthier carmakers by its creativity and focus on innovative technology.

Now, more than ever, Japan's number-three carmaker says a renewed drive to bring its R&D and production operations closer together are crucial to thriving in an industry where the race to develop different and fuel-efficient cars has intensified.

"We're at a critical juncture where we have to really fortify the link between R&D and production," said Motoatsu Shiraishi, a senior executive who has just taken over Honda's R&D unit.

"When hybrid and fuel-cell cars become more common, it won't be enough to come up with a better product at the research level. We have to make it commercially viable when it's mass-produced."

In 1999, Honda released the US market's first petrol-electric hybrid car; most rivals have yet to offer one. It is also alone with a marketable fuel-cell vehicle that can be driven in freezing temperatures.

While most of its peers have formed capital and technical ties to speed up development, Honda has, typically, chosen to go it alone.

That independence means it can't reap the kind of cost savings that Nissan enjoys by buying common parts with partner Renault to take on General Motors, Toyota and others.

"We are small and weak when it comes to scale. A company like ours has to compete by staying one step ahead of the rest in the field of technology," Shiraishi said, stressing that a closer link between R&D and production was a must.

His posting as president of Honda R&D is a case in point.

The 58-year-old has spent all of his 36 Honda years in production engineering.

For Honda, the R&D field has never been too broad. It famously dabbles in jet engines and humanoid robots, while also conducting research into bio-fuels and solar power, among others.

While Honda has done well business-wise - it has never posted a loss and is valued at US$48 billion, second only to Toyota in the global car industry - some critics have wondered whether the quirky carmaker is spreading its resources too thinly.

But insiders say the outlays yield dividends for its core motorcycle and carmaking businesses.

As cars become more computerised, the technological know-how gained from developing robots - such as voice and visual recognition skills - comes in handy; the aircraft business gives Honda valuable insight into reducing the weight of cars.

That kind of edge and creativity are crucial for Honda, whose car business lacks the broad engine or chassis line-up to compete head on with bigger and deeper-pocketed rivals.

When it comes to creativity, Honda is a trend-setter.

In the early 1990s, with observers wondering when Honda would enter the "one-box" van-type family car segment that was taking Japan by storm, its answer in 1994 was a whole new concept: the Odyssey, which ignited the minivan boom.

But being first hasn't always worked to Honda's advantage.

Competitors sometimes followed with similar products at a lower price and with more add-ons.

Kunimichi Odagaki, a senior official at Honda R&D and creator of the Odyssey, says: "Our goal is to come up with concepts that make people say, 'Why didn't anyone think of this before?'," Odagaki said.

"That's what's unique about Honda and that's where our strength lies."

Creating trends

* Technological know-how - such as voice and visual recognition skills - has been gained from developing robots.

* Aircraft design has provided valuable insight into reducing car weight.

* Bio-fuels and solar power are also being investigated.

- REUTERS