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How Long Can Honda Boss Hold Out?

25 August 2000

How Long Can Honda Boss Hold Out?

    LONDON, Aug. 23 

    In the year to March, Honda has seen its profits drop 12% but is
determined to stay independent; Hiroyuki Yoshino is turning away potential
buyers.  As it is, Honda has a lot to offer the automotive industry; selling
2.5 million new cars annually, it boasts a global customer base and is a
leading force in Asia, Europe and North and South America.
    According to a report by The Economist on just-auto.com -- available at
http://www.just-auto.com/features_detail.asp?art=259 - Yoshino believes that
this widespread success can be credited to Honda's well-established marketing
tactics.  When entering new markets, the brand image is always promoted before
the first car is sold.
    Breaking into the markets in developing countries is a Honda specialty.
Motorcycles, of which Honda are the biggest producer in the world, are often
the first thing that Honda will sell as this is the transport that many in
these areas are used to.  Yoshino says, "That way we get the people, we get to
know the local scene and we develop sources for parts."
    Despite a strong yen and stiff competition from its rivals, Honda is still
a leading force in the global automotive industry and has already dismissed
Ford, which produces three times as many cars, and Daimler-Benz as potential
buyers.
    Having experience working with Rover, which Yoshino described as
"a three-legged race" because he felt Honda was hampered, he is understandably
reluctant to work with another partner or indeed, sell.  But with falling
profits depressed by a strong yen and growing competition from the giants,
Yoshino may be left with little choice if profits drop to 30% and below.