Problems Being Faced By Honda International

Final Report

Submitted to Ms. Rushda Khan

Submitted by Muhammad Umair Muneeb 2131077 Hafiz Ebad-ul-Haq 2131102 Muhammad Ali2123296

Date19/12/2013

National College of Business Administration & Economics40-E1, Gulberg III, Lahore 54660, Pakistan

ACKNOWLEDGEMENTS

I am heartily grateful to Allah Almighty, the most beneficial, the most merciful, all knowing, who blessed us with the strength to complete this report. It would not be possible to complete this study without the guidance, advice, cooperation, sympathetic attitude, valuable suggestion, and help of our instructor. I am heartily thankful to my instructor, Ms. Rushda Khan whose encouragement; guidance and support from the initial to final level enabled us to develop an understanding on the subject. I would like to thank department of business National College of Business Administration and Economics Lahore for providing me opportunity to conduct the report. I would like to thank my fellow group members for their help and support. Above all I would like to thank my parents and whole family for doing all that have done so far for me, and allowing me to purse what I want. We would not forget to appreciate the assistance of those who helped us in the completion of this report Mr. Shafi (G.M, Atlas Honda).Lastly, I offer my regards and blessings to all of those who supported me in any respect during the completion of the report.

Table of Contents

EXECUTIVE SUMMARY4INTRODUCTION5Profile5Vision statement4Mission statement4Honda philosophy5Striving to achieve harmony with society5Next dreams5PROBLEMS FACED BY THE COMPANY6Lack of supply of resources6Lack of budget6Intense competition6Natural disasters5Market Competition7Strike7Recalling of Hondas new brand7SOLUTIONS OF THE PROBLEMS9Lack of budget9March to zero9Recalling of Brand10BIBLIOGRAPHY11

EXECUTIVE SUMMARY

The basic purpose of this project is to indicate some of the problems that are being faced by Honda Motors International. These problems are hindering in the way of sales of Honda Motors. Due to which it is affecting the profit of the company. Honda Motors has been facing the problem of low budget which further causing many other problems such as technology issues and low wages issues of the employees in company. This project is basically a detailed research on issues faced by the company, which includes meeting with some company officials and detailed questionnaires on different issues and problems. After the complete research on these issues we reached to some of the major causes of the problems like disaster in Thailand and Japan by fold and low budget of the company.

At the end of the project, we concluded some of the suitable solutions of these problems. According to our research, we believe that Honda Motors should now introduce new technologies and products in the market that have never been around before. They should Identify the products customers are wishing for and then realize them at a very fast pace. Major problem of Honda Motors is the low budget of the company which can solve by increasing the sales of the company and increasing the profit margin. If budget issue gets solved, then the company can overcome all other problems. But it is only possible when company achieves good crisis management tactics.

INTRODUCTION

Profile:

Honda Motor Co., Ltd was established on September 24, 1948. After World War II, Honda motors invented auxiliary engines mounted on bicycles which spread quickly in Japan, making it easier for people to move around and transport goods. This was the starting point of manufacturing for Honda. Ever since, Honda has given shape to wide-ranging joys and the fun of riding on wheels. Chief products of Honda Motor are Motorcycles, automobiles and power products. Its President, CEO & Representative Director is Takanobu Ito. And the global headquarters for the Honda Corporation are located in Tokyo, Japan. The U.S. headquarters for American Honda Motor Co, Inc. are located in Torrance, California.

Vision Statement:"Quality in all jobs: learn, think, analyses, evaluate and improve. Reliable products: on time, with excellence and consistency. Better communication: listen, ask and speak up."

Mission Statement:Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction."

Honda philosophy:Providing joys to the world through new challenges and the realization of dreams.

Striving to achieve harmony with society:Honda wants to pass on the "joy and freedom of mobility to the next generation" (for our children), therefore, the company wants to realize a sustainable society where people can enjoy life (blue skies).

Next dreams:Honda is studying human beings which would lead to new technologies and would support people in their daily lives...Problems faced by the company:

We researched and meet some officials of Honda Company and found that Honda is facing some problems that are hindering the ways of Hondas progress. These problems are

1. Lack of supply of resources2. Strong market competition3. Low budget

1. Lack of supply of resources:

Honda today is facing the issues of lack of supply of resources. Honda do needs supply of resources from other country such as Thailand, Japan and so on. Due to the Honda has manufacturing facilities in Japan, Thailand, China and Malaysia.But Japanese earthquake and tsunami and flooding in Thailand and Japan in 2011 totally destroyed the infrastructure of both these plants. For many months manufacturing of products totally got stopped. This destruction made Honda lack of resources to do their accessory and requirement from engine. Also their enemies companies got chance to sell more cars compare to Honda.

2. Lack of budget:One of the main problems that Honda facing today is lack of funds. Honda has spent months struggling with shortages of most of its products just before a devastating earthquake and tsunami struck Japan and seriously damaged that nations automotive infrastructure. Factors that affect the budget are

Intense competition:Honda faces more intense competition than ever. New small entrants are disrupting the market with their capabilities in producing electric vehicles or alternative fuel engines. Big companies are restructuring themselves to become more efficient. As a result, firms like Honda are suffering from competition from both big and small players. Natural disasters. Honda has manufacturing facilities in Japan, Thailand, China and Malaysia. These countries, including others, are often subject to natural disasters that disrupt manufacturing in the facilities and decrease Hondas production volumes.

3. Market Competition:There are four main market competitors of automobiles in the market which are Honda, Toyota, BMW, Mercedes, Nissan, and Mazda.

All these companies are trying to do their best get ahead in the market. But Due to sticking to bare bones system. Honda is far away from the market leader TOYOTA. If we take the example of Hybrid cars, in which Toyota today is a market leader. Honda was company who developed hybrid not the Toyota but due to sticking to old technology Toyota overcome the Hybrid technology of the Honda, Honda lost its leadership to its number one Japanese rival.

Strike: In start of 2013 employees of Honda Companys Plant in China went on strike for having low salary and compensations. That strikes long for more than a month. During that month Companys manufacturing totally got stopped and no new manufacturing occurred. And it affected Hondas sales very much.

When condition got severe Honda company offered employees 28% more salary. On which many of the workers of Honda rejoin their work.

Recalling of Hondas new brand:One of the major problems that Honda is facing today is the recalling of its new brand Odyssey van. Honda is recalling 344,000 of its 2007-8 Odyssey minivans because a malfunctioning computer could cause heavy and unexpected braking without the driver pressing on the brake pedal and without illumination of the brake lamps. Recalls affects the value of a specific brand and it can take the company a long time to recover from the damage to its reputation

Solutions of Problems:We researched on different websites and also meet with G.M Atlas Honda, Mr. Shafi and discussed about the possible solutions of the problems faced by the J=Honda company. We would here present the solutions of some major problems of the company.

Lack of budget:Low budget is the serious problem for any company. As it affects the production/progress of the company. It is the root cause of all other problems faced by the company. To face with the problem of low budget Honda motors should now introduce new technologies and products in the market have never been around before. They should Identify the products customers are wishing for and then realize them at a very fast pace.By seeing the new model of Honda FCX, we can realize that Honda has already started working on customers need. The new FCX Fuel cell electric motor Is a new electric car introduced by Honda motors. It has a sleek and elegant design and comfortable. Emits no CO2, which is a major contributor to climate change. It is design such as needed by the customers.Here are two more innovative products of Honda motors, Hondas jets and Robots. Honda Jet is an advanced light business jet that breaks new ground by offering a larger cabin and luggage space, far better fuel efficiency, and higher cruise speed compared to conventional aircraft in its class. ASIMO was created for the sole purpose of helping people in need. ASIMO has the unique ability to walk forward, backward, side step and even climb stairs with human-like agility. They should introduce more fuel efficient cars and electric vehicles. As they are the top priority of the people now due of lack of natural resources.

March to zero:Honda motor is trying since 2001 to decrease their per unit cost to increase its profit. Now they are near to their expected level. In 2001 62.8 landfill wasted to wasted but in 2012 its only 1.8 per unit. That would really help Honda company to increase their budget.

Recalling of Brand:One of the major problems that Honda is facing today is the recalling of its new brand Odyssey van. In just star of 2013, Honda recalled 3, 44,000 odyssey vans due to complains of their customer. Recalls affects the value of a specific brand and it can take the company a long time to recover from the damage to its reputation, but it doesn't have to take a long time if the company uses good crisis management tactics,

Only thing that is needed now is that, Honda should now make suitable changes in the brand and make it better enough that there would be no complaints after that. Not only in this brand but in all production. They should make their quality their standard.Recalling of brands isnt a new thing now. It has become a tradition in automobile industry. Since 1967, the National Highway Traffic Safety Administration which is claim center of automobile industry has recorded 8,759 of March 2008. That's more than 200 recalls every year. In some of the recalling, sales of cars decreased as people considered it as failure of technology of company. But in some cases, it didnt affect the value of company even the value increased. Because people realized that these recalls were in their own benefit. If it wasnt recalled, these defects could be life hazard. And companies invest a lot of money on recalling process for the safety of people and protect customers not just its own sales. This results in in positive response of people.

Bibliography

Eisenstein, B. P. (2011). Toyota, Honda facing tough new challanges in America.

Honad Foundation. (n.d.). Retrieved 1 30, 0, from Honda Foundation: http://websearch.pu-result.info/?pid=721&r=2013/06/21&hid=81040976&lg=EN&cc=PK

Honda Media Newsroom. (n.d.). Retrieved from Honda Media Newsroom: http://www.hondanews.com/channels/167/releases/94f05cb6-5b2b-b3e4-cd6c-7b004c34bef5

News Pakistan. (n.d.). Retrieved from News Pakistan: http://www.newspakistan.pk/2011/11/01/Honda-Motors-face-logistics-problems-due-to-monsoon-floods-in-Thailand/

Study Mode. (n.d.). Retrieved from Study Mode: http://www.studymode.com/essays/Issues-Faced-By-Honda-1408784.html

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