Honda the Chinese Way

Invention and new-product development was central to Honda’s culture. Honda purposefully did not cap its spending on R&D. In 2007, almost 5% of global revenue was budgeted for R&D.30

Honda R&D Co., Ltd (“Honda R&D”) was founded in July 1960 and had since been operated as a separate organisation. Takeo Fujisawa, co-founder of Honda, recognised that Honda could not rely completely on the genius of Soichiro Honda and that the true sources of Honda’s competitiveness were technology and innovation. Therefore, he thought it necessary to secure independent financing for R&D activities.

We cannot be assured of continued corporate activity unless we have not just one, but many Soichiro Hondas. We must foster experts in various fields.

- Takeo Fujisawa, co-founder of Honda31

With the slogan “all engineers are equal in the presence of technology”, everyone at Honda R&D wore the same white uniform to symbolise this equality. Honda allowed engineers to choose and register a research theme and define the areas of their responsibility with the objective of utilising their skills, ambitions and abilities to the fullest extent. The ultimate objective of Honda R&D was that “research must have merit”.32

The Element Project, a project to expand its light truck portfolio beyond the popular CR-V, Pilot sport utility vehicle, and the Odyssey minivan, was a good example of how Honda segmented its markets for growth.33 The aim of the project was to target first-time car-buying males, eliciting their awareness of the Honda brand and keeping them loyal as they grew older and more affluent. Honda formed the Element concept-development team in 1998 in the US to create a compelling design that reflected the core values and beliefs of the target users with an affordable price. The team used observations at the X Games34 to supplement traditional