Editor's note: An earlier version of this story had an incorrect age for Ito and the wrong year for the debut of the NSX. The story also contained incorrect U.S. market share statistics for Honda.
TOKYO -- Takanobu Ito, newly named as the next president and CEO of Honda Motor Co., will redouble the companys focus on research as it grapples with a global market meltdown.
Honda presidents traditionally cut their teeth at the automakers cherished development subsidiary, Honda R&D Co. Ltd. Current President Takeo Fukui, 64, headed the operation in 1998, and Ito, 55, was in charge from 2003-05.
But in his new role, Ito will return as president of Honda R&D in April. And he will keep that job after he takes the helm of Honda Motor in June. Ito will be the first man running both Honda Motor and R&D since Nobuhiko Kawamoto in 1992.
Fukui called the doubling up a way to streamline decision making at a time when quick reaction to volatile markets is key to survival. Honda won plaudits last year for rapidly shifting its North American production toward more small cars as demand for big vehicles wilted.
The next couple of years will be difficult. And in order to push through, we need speedy decision making and a compact leadership, Fukui said at a news conference here today announcing the management reshuffle. After June, Fukui will stay on as an adviser to the board.
In the black
Honda expects operating profit to plunge 81.1 percent to 140 billion yen ($1.51 billion) in the fiscal year ending March 31. Unlike much of the world auto industry, Honda expects to remain in the black. Toyota and Nissan are among those revising their outlooks to losses.
R&d is the key to future growth, but budgets are getting cut as automakers slash expenses. Honda is among those cutting its original r&d budget for the fiscal year ending March 31. But it will still be spending 1.2 percent more than last year.
Tatsuo Yoshida, an auto analyst at UBS Securities, says it makes sense to give an r&d veteran such as Ito direct oversight over production and development.
In this kind of environment, r&d money is scarce and it has to be spent cleverly, he said.
Ito, now a senior managing director, joined Honda in 1978 in r&d. His projects included the all-aluminum unibody NSX sports car, which went on sale in 1990.
He later came to the United States as executive vice president of Honda R&D Americas. There he led development of the MDX crossover.
After returning to Japan, Ito became president and director of Honda R&D Co. And he later polished his production credentials as the general manager of Hondas factory in Suzuka, Japan.
Fukui oversaw an era of expansion at Honda, including the addition of a plant in Indiana and the launch of the redesigned Insight hybrid, regarded by some experts as the best challenge yet to Toyotas Prius.
But he hands the wheel to Ito at a dangerous time.
Hondas vehicle sales in the United States, its most important market, tumbled 27.9 percent to 71,031 units in January. Its market share, however, still increased to 10.8 percent from 9.4 percent a year earlier.
Aside from plunging demand, Honda also is fighting a surging yen. The yens rise undermines Hondas international profits and makes Hondas exports from Japan more expensive.
The Japanese currency traded around 93 per dollar today, not far from a 13-year high near 87 per dollar hit in January. Fukui has called the range unsustainable and has warned that Honda may move more operations -- including r&d centers -- overseas to counterbalance the foreign exchange hit.