HOW HONDA GOT ITS GROOVE BACK

With the new Honda Fit, engineering solutions once again take priority

Makoto Konishi: “Sometimes added cost is necessary. To spend the money to beat the competition, it's worth it.”
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Editor's note: This story has been updated to clarify certain features of the 2015 Honda Fit’s rear seats.

SAN DIEGO -- If there is any question about whether smart engineering is on its way back at Honda Motor Co., one need look no further than the second-row "magic" seats of the 2015 Honda Fit.

In an impressive display of packaging, not only does the second row give plenty of legroom and headroom for a 6-foot-tall person to sit -- rare for a subcompact car -- but the seats fold down seamlessly to the floor of the hatchback's cargo area.

Sure, the seats cost more -- Honda declined to say how much -- to engineer and build than conventional seats. But a conventional rear seat -- as seen in the Ford Fiesta, Nissan Versa Note and Hyundai Accent -- has nowhere near the same occupant space and does not fold flat with the cargo area floor. To Honda's engineers, the seats are worth every penny.

"It depends on how you think about it," said Makoto Konishi, the Fit's chief engineer or "large project leader" in Honda parlance. "Sometimes added cost is necessary. To spend the money to beat the competition, it's worth it."

That level of confidence from a chief engineer has been sadly lacking from Honda for more than a decade, as purchasing-, finance- and regulations-obsessed executives ran roughshod over Honda's engineering culture.

But after a series of product-launch miscues and meltdowns -- starting with the 2001 Civic and culminating with the 2012 Civic -- Honda had its moment of clarity: The automaker that once was willing to spend a couple of extra bucks to deliver smart engineering needed to return to its roots. Cost-down and fuel economy solutions still would be important, but no longer paramount.

With the 2015 Fit, engineering detail after detail is done the way of company founder Soichiro Honda: elegant solutions based on customer-first decisions. Sometimes, it's visible, with better packaging taking priority over aerodynamics. Sometimes, it's felt in the driver's butt, such as the subtle change in the design of the torsion-beam rear suspension that makes the Fit's handling more responsive.

"If you go cheap, and it doesn't sell, you don't win. If it's going to cost $50 more, and you don't do it, you don't win," Konishi said. "We are trying to give birth to things that are different from the competition."

That this is happening with Honda's $17,000 entry-level car can only spark the imagination for when Honda cascades those improvements up through the model line.

If the 2015 Fit is any indication, Honda has its mojo back.

In its glory days of the 1980s and '90s, Honda's main mission was to engineer a better car that flattered the driver, even if it was slightly more expensive.

But after Japan's economic bubble burst in 1991, bean counters began playing a larger role in Honda's strategic and product planning. The culture of dynamic driving and smart packaging took a back seat to meeting cost and corporate average fuel economy and safety standards.

For Honda watchers, the turning point came when Honda ripped out the supple, double-wishbone front suspension in the 2001 Civic and replaced it with a cruder, cheaper MacPherson strut setup. Honda's rationale was that it improved the engine bay layout -- and it cost hundreds of dollars less per unit. But Honda purists were outraged.

Still, within Honda, the band played on, as management continued to believe that consumers still worshipped Honda vehicles. Riding the red-hot car industry, the Honda brand rolled to 11 straight years of record U.S. sales, through 2007. It collected scads of J.D. Power and Associates quality and APEAL -- for Automotive Performance, Execution and Layout -- awards.

But after a string of poorly envisioned products (see chart, Page 3),Honda stopped winning APEAL awards. Although Honda still was near the top in Power's quality rankings, its product execution was turning it into a commodity-car brand, with rising incentives to show for it.

As engineering took second priority, the nadir came with the 2012 Civic, which was savagely de-contented in anticipation of the recession crimping consumers' spending habits. The interior was subpar, with inferior materials and fabrics. Noise, vibration and harshness were punishing and un-Honda-like. Consumer Reports removed the Civic from its "recommended" list for the first time in memory, calling it "cheap" and "insubstantial." Although Honda sold a ton of Civics, it paid a fortune in incentives to move the metal.

This was the inflection point for Honda, and crisis thinking took over. CEO Takanobu Ito took the blame for the lousy Civic, but he also put heat on his engineers to make it better -- fast. The underlying message to chief engineers for subsequent products: engineering and quality over cost.

With a quick turnaround of a nearly clean-sheet, no-holds-barred redesign of the Civic for the 2013 model year, Honda rescued one of its most important vehicles. It also started applying the Civic's lessons to the development of the CR-V and Accord. Although both products were well down the development path in r&d terms, both showed measured improvements over their predecessors, especially the Accord.

The first vehicle that would benefit fully from the new thinking would be the Fit.

"The Fit reflected on our experience with the Civic," Konishi said. "How much would we be willing to do to save cost or improve fuel economy? Would we be willing to make the car smaller to get better fuel economy?"

One decision, together


Even from Day 1 of r&d, Honda engineered the Fit differently.

"In the past, for a global car, we would design it for Japan first, then ask, 'Is it OK?' to the U.S. or Brazil," Konishi said.

Problems from any regional market meant patchwork solutions.

This time, when engineers took the concept to Ito, he collected all the regional leaders and said, "'Let's decide this once, globally,'" Konishi added.

Instead of letting the purchasing or finance departments have decision-making power over engineering development, Honda let its engineers be creative, then told the purchasing department to make it work somehow -- just like in the old days.

"If we did everything we wanted, that meant the cost would go up, so the purchasing department had to work very hard," Konishi said.

The mission was to create a global car that could be manufactured anywhere in the world with a maximum of locally sourced parts. By getting early input from all the regional r&d centers, Honda was able to cut costs by up to 20 percent and channel those savings back into better content.

To improve the Fit platform's purchasing leverage with suppliers, Honda also performed the r&d work simultaneously on the Fit, the Fit-based crossover coming later this year and the City sedan that was launched in emerging markets in January.

Such a move was risky. Communication among the variants' engineering teams was crucial so that all decisions were in alignment. Purchasing executives, sales managers and manufacturing engineers also were brought on board much earlier. It didn't help that Honda was simultaneously opening a plant in Celaya, Mexico, to build the Fit. It also meant some hard choices, such as deciding not to sell hybrid and sedan variants in the United States.

"Of course, there were business decisions to be made," said Rick Schostek, Honda North America executive vice president of strategy, governance and support. "But when the engineers had their ideas, we knew that going with the lowest cost might not be the best way."

"If you go cheap, and it doesn't sell, you don't win. If it's going to cost $50 more, and you don't do it, you don't win. We are trying to give birth to things that are different from the competition." - Makoto Konishi, Honda

Standing their ground


In looking at the second-row seats, packaging was paramount.

"During the course of a five-year product cycle, at some point, our various features will be overtaken by others," Konishi said. "So the packaging had to be smart enough to last through the life cycle."

To make room for the seats to fold flat, the fuel tank's profile was squished flatter, even though capacity didn't change.

"With the Insight, we wanted good fuel economy and really good aerodynamics, even if it meant a bad second row and cargo area," Konishi said. "For the new Fit, we put the packaging in place first, then did the aero. The functional requirement came first."

In other words, if having an impressive second row meant sacrificing a few tenths of a mile per gallon in fuel economy, so be it. If Honda needed better fuel economy, the improvement had to come from the engine and transmission.

Honda made the engine better through direct injection -- arriving rather late to this technology party, to be sure -- mated to Honda's legendary VTEC variable valve timing system. Engineers lightened the crankshaft by 27 percent by narrowing the crankshaft journals -- which connect the crankshaft to the engine's connecting rods -- and used four counterweights instead of eight. Although the engine's horsepower jumped by 11 percent to 130 hp, with the new continuously variable transmission, fuel economy improved by 16 percent to a best-in-class 33 mpg city/41 highway.

There were other notable developments on which the r&d team refused to budge. Interior fabrics, materials and standard content are excellent for a budget car. And far less road howl and wind noise enter the cabin.

As for ride and handling, subcompact cars typically are saddled with an antiquated, cheap chassis to keep costs low. All have a variation on the torsion-beam rear suspension that has been in use since Conestoga wagons roamed the prairie. While stuck with using a torsion beam, Honda strengthened it by crimping the underside so that its shape is less like an "O" and more like an inverted "U."

A steel industry study shows this torsion-beam method is more expensive to create. But because the new design requires fewer patches and metal inert gas welds, it's less brittle and has better torsional rigidity, Konishi said. In a daylong comparison road test, the handling of the new Fit was more supple and responsive -- yet another way Honda flatters the driver of an inexpensive car.

"This car represents our values," Schostek said. "It's what a true Honda is to us."

The road to perdition
There were danger signs when Honda began developing its vehicles to be beholden to cost, fuel economy, aerodynamics and market research, as opposed to delighting the customer.

• 2008 Accord
Weakness: Too big, ponderous, floaty

• 2009 Crosstour
Weakness: Styling in need of rhinoplasty

• 2010 Insight
Weakness: Poor packaging; mpg less than Prius

• 2011 CR-Z
Weakness: Neither sporty nor fuel efficient

• 2012 Civic
Weakness: De-contenting run amok, poor driving dynamics

You can reach Mark Rechtin at mrechtin@crain.com. -- Follow Mark on Twitter


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