Honda to reduce model trim lines, streamline output

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.

Honda will also introduce a new vehicle architecture that will underpin vehicles globally. Dubbed the Honda Architecture, it will debut in a global model that Honda will launch next year.

Hachigo did not offer details but said the goal is to commonize about 70 percent of the components that are not seen by customers, such as the engine bay, passenger cabin and rear storage.

The outer shell of vehicles on the new architecture will be differentiated.

Honda also aims to reallocate development resources to churn out vehicles with next-generation technologies. By 2025, Honda wants to cut the number of man-hours devoted to development of mass-production vehicles by 30 percent and repurpose that work for r&d.

“In this way, we can continue creating new technologies,” Hachigo said.

He also outlined plans to step up the company’s roll out of electrified vehicles.

The Japanese carmaker wants to electrify two-thirds of its global lineup by 2030. And it wants to achieve 100 percent electrification across its offerings in Europe by 2025.

To get there, Hachigo said Honda will deploy its two-motor i-MMD, or Intelligent Multi-Mode Drive, hybrid system across the entire lineup of Honda vehicles.  

The company has also developed a new, more compact i-MMD system for small vehicles. It will first appear in the redesigned Fit compact that will be shown at this fall’s Tokyo Motor Show.

By 2022, Honda wants to reduce the cost of the i-MMD system by 25 percent, compared to 2018 levels. The goal is to eventually achieve cost and profit parity with gasoline engines.