TOKYO – Honda Motor Co. will slash the number of model variations available in North America and other regions and overhaul its production base in a new push to improve efficiency as growing investments in next-generation technologies pressures the company’s bottom line.
In outlining the overhaul Wednesday, Honda CEO Takahiro Hachigo said the company will also introduce a new vehicle platform next year and introduce its two-motor hybrid system across the entire vehicle lineup.
Honda, which reported a 13 percent decline in fiscal full-year operating profit on Wednesday, will cut the number of model variations offered on global nameplates such as the Civic small car, the Accord sedan, the Fit compact and CR-V crossovers, to one-third their current number by 2025, Hachigo said. Regional nameplates will also be consolidated to streamline product development and production.
Honda does not intend to reduce the number of nameplates, just the number of trim options, he said. Hachigo cited variations in control panel layouts and color combinations as one target.
As part of the move, Honda will also simplify model allocation at assembly plants, including those in North America, Hachigo said, without giving specifics.
But he said doing so will help Honda achieve 100 percent capacity utilization worldwide by 2020, up from 90 percent currently, and cut global production costs 10 percent by 2025, compared with 2018 levels.
“For our business in North America, while keeping pace with sales expansion, we enhanced our model lineup and established a flexible production system where our plants sometimes produce various models in duplication to accommodate changes in market demand,” Hachigo said.
“However, as a result of the pursuit of high flexibility, an increase in the investment amount and a decline in production efficiency started to become an issue,” he said.