Honda overhauling its sourcing strategy to better compete with Hyundai

Article by Christian Andrei, on September 22, 2010

Honda Motor Co. will scrap its one-spec-fits-all method as it moves to overhaul its sourcing strategy. According to Masaya Yamashita, head of Honda's purchasing operations, this is being done on global car models to make them more competitive against Hyundai Motor and other carmakers in emerging markets.

Until now, Honda had been using a common blueprint for components on cars built and sold globally in order to raise efficiency. It was also done so that consumers throughout the world would receive the same specifications for those models. 

Yamashita said that this strategy is outdated and only makes some of the models more expensive in China, India and other regions especially at this time when sales of Hyundai and other competitors are increasing as they sell cars that fit the needs of local consumers better.

In a Reuters interview, Yamashita said that its rivals are growing fast “because they're looking at components from a new angle.” He explained that the old stereotype had been that cheap vehicles offer lower quality but that this isn’t the case now.

He said that Honda would have to operate with a brand new standard for components. Honda’s plan to create several different blueprints on vehicle components is expected to cut purchasing costs on the next-generation Fit subcompact, one of its top sellers, by about 20 to 30% in emerging markets.

He said that the first car to be equipped the new sourcing method is the fully remodeled Fit, which is set to arrive at around 2012 or later. For example, the Fit (named the Jazz in Japan, China, India, Thailand, Indonesia, Britain and Brazil) currently uses the same design and materials for most components in all seven countries.

But this leads to high costs as this means that the components have to meet the highest common denominator for specifications. [via autonews - sub. required]

Topics: honda, hyundai

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

The highlight of this year’s Consumer Electronics Show may be based on some of these keywords---connectivity, integration and partnership. Just like in the previous year, you’ve probably heard and read...
by - January 16, 2017
Less than three weeks to go and the Super Bowl LI – one of the most awaited and most watched sports events in television – will commence on February 5,...
by - January 16, 2017
New Tesla vehicles will have to pay when charging at any of the carmaker’s Supercharger stations once they exceed their annual limits. This comes as Tesla Motors announced revisions in...
by - January 16, 2017
Off-road driving with an open air vehicle provides another kind of experience for many off-road enthusiasts and fans. For this sake, Ford is planning to offer a version of the...
by - January 16, 2017
For those who love driving, future autonomous cars should be like the Toyota Concept-i that is drawing in a multitude of visitors at the 2017 Consumer Electronics Show in Las...
by - January 15, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries