| BUSINESSWEEK ONLINE : JULY 5, 1999 ISSUE | ||||||||
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| INTERNATIONAL -- ASIAN COVER STORY
Handicapping Honda ITS STRENGTHS... 1. Technology and manufacturing knowhow that lets Honda make cars more profitably than most other carmakers. 2. A global reach that stretches from Brazil to China. Honda sells more abroad than at home. 3. Economies of scale. Honda sells 2 million vehicles a year, but 10 million engines, for everything from lawn mowers to sedans. 4. Research. Its R&D budget now exceeds that of Japan's No.2, Nissan. Honda spends 5% of revenues on R&D. It has supplied engines for Formula 1 cars for years and has rolled out a dizzying array of envirocars. ... AND WEAKNESSES 1. Honda depends on North America for 85% of its profits. 2. It can't afford a wrong move on big-volume models. Honda relies on Civic and Accord sedans for 55% of sales. 3. The company can't count on raking in profits from gas-guzzling recreational vehicles or luxury cars as its rivals do. Its Acura near-luxury line needs a major overhaul in the U.S. 4. Honda is unable to spread its fixed costs for engineering, technology, and marketing over a huge volume of vehicles. 5. It faces a long road in Europe. It has failed to make a dent in the small-car market, and it stands for ho-hum sedans driven mostly by pensioners. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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 RELATED ITEMS Honda: Can the Company Go It Alone? (int'l edition) COVER IMAGE: Honda: Can the Company Go It Alone? PHOTO: Honda Indy Racing Car PHOTO: Honda Gas-and-Electric Hybrid PHOTO: 1999 Honda Odyssey TABLE: Honda vs. the Giants TABLE: Handicapping Honda ``We Just Kind of Sneak Up on You'' (int'l edition) How Not to Buy a Car Company (int'l edition) ONLINE ORIGINAL: Honda's Yoshino: ``Traditionally, We Build Small and Grow Big'' (int'l edition) INTERACT E-Mail to Business Week Online | |||
