The counter-trend growth of the Chinese market has greatly improved the position of Honda's global planning; while in the US market, it is more pursuing "now". Honda in 2022 has already focused on adjusting its global deployment in 2025.
Text / "Autobot" Meng Hua
Honda and Toyota, two car companies, have been CP for many years.
Although their product lines are very different, they are relatively strong in compact cars and MPV products, and they all have the technical advantages of HEV and PHEV, and the electrification strategy also seems to be unhurried. But in fact, if you choose which Japanese company and Toyota temperament are the furthest apart, Honda is a strong competitor.
In 2020, it is said that the Japanese government brokered the merger of two companies, Toyota did not say anything, and Honda refused to discuss the matter at the first time. With such a clear attitude, in the case of Toyota's dominance, Honda has historically been very sensitive to operational independence and technological autonomy, not to mention capital consolidation.
As the automobile industry faces the opportunities and challenges of the "new four modernizations", some of the development strategies formulated by Honda are quite radical, and it can be said that they are "very un-Toyota". But at the same time, in the traditional business, it is very stable. After all, before the global operating pattern has been subverted, it is unwise to kill the goose with the golden egg.
Two Hondas, each good at winning
Robustness is reflected in the two major overseas markets in China and the United States, and like Toyota, China and the United States are also the cornerstones of Honda's overseas operations.
Looking at China first, Honda's total sales in the Chinese market in 2021 will be 1.573 million vehicles, surpassing the United States and winning the largest overseas market in terms of scale.
Among them, Guangqi Honda sold 780,300 vehicles, a record high. In the past year, Guangben has launched 7 new cars – 4 mid-term remodels and 3 brand new models. The product line is still not too long, but A-class (including A0) cars, B-class cars, compact SUVs, and MPVs have performed well.
Total sales of cars reached 348467 units, of which the main sales force was accord, more than 200,000 units; the Fit also exceeded 96,000 units, a surge of 50%, regaining market share; and the Integra was launched for a short time (December 16, 2021), with more than 10,000 units scheduled in the first two weeks of New Year's Day.
The most eye-catching performance in the SUV lineup is Binzhi, with cumulative sales of 173,870 vehicles; the cumulative sales of mid-range SUV Haoying, which has been listed for 2 years, has exceeded 300,000 vehicles; and the cumulative sales volume of flagship SUV Guandao in 2021 is 40,048 vehicles.
In 2021, the previously unappreciated MPV segment is exciting, and many competitive models have emerged. Odyssey, which only ushered in a major overhaul at the end of the year, was still able to grow by 2.6% (433666 units), and the redesigned series was equipped with Honda's proud i-MMD PHEV hybrid system, which was also used on HaoyingRui Hybrid e+.
Broadmoto's new pure electric platform is long overdue, and Honda's EV sub-brand e:N has been released and confirmed to be introduced. The first product e: NP1 will be launched in the first half of 2021, plus the existing pure electric sedan EA6 and VE-1 pure electric SUV, Guangben will initially form an EV product array in 2022.
Dongfeng Honda sold 793,200 vehicles in 2021, down slightly from 2020, but terminal sales rebounded from 87,669 units in December.
Among them, CR-V is still the largest pillar of sales, with annual sales of 222325 vehicles, accounting for about 28.03% of the total sales of the whole series, and once again won the championship of joint SUV sales; XR-V annual sales of 191417 units, an increase of 13.75% year-on-year, accounting for about 24.13% of the total sales of the whole series, won the joint small SUV sales champion; The annual sales of Ai Lishen was 52214 vehicles, an increase of 17.3% year-on-year, accounting for about 6.58% of the total sales of the whole series.
In addition, Dongfeng's electrification family sales 137341 vehicles, an increase of 47% year-on-year, accounting for more than 17% of total sales, and has initially formed a profit sector for new energy products.
Higashimoto's e:NS1 and Hiromoto's e:NP1 are parted products on the same platform, which is very similar to the north-south Volkswagen model distribution method. That is, using products with the same platform but different styles, seeking differentiated competition.
Higashimoto CR-V products continue to play the main role, gradually transforming from naturally aspirated to small displacement turbocharging and i-MMD dual-motor hybrid system, "fuel, hybrid, plug-in hybrid" three power options. This reflects Honda's consistent line of thinking, which is to focus on the balance of low emissions and performance, and complete the layout of the main product before the carbon emission regulations arrive.
At the same time, the Civic has developed into the eleventh generation (launched in September 2021), which is the first model in China to be equipped with Honda CONNECT 3.0. In the same way that CR-V continues to evolve and inherit, Honda has a special experience in maintaining the longevity of star models.
October 2021, in J.D. In the "China Automobile Retention Rate Research Report" (October 2021) released by Power, dongfeng Honda brand (and many of its models) ranked first in the retention rate.
In the mixed sales ranking of passenger cars, Honda's two joint ventures, a total of 4 products into the top 25, two products into the top 10. There are hundreds of models participating in the ranking, which is a valuable achievement. Compared with multinational first-line manufacturers, Honda is not known for the richness of its product line, but basically makes one into one.
Some of Honda's traditional car series have a very long lifespan (technology is constantly evolving), which helps maintain long-term loyalty among users, and even forms "intergenerational loyalty" in Japan and the United States. China's entry into the automotive society is short of fashion and has not yet observed obvious signs.
The mass consumer psychology of mature automobile society is highly convergent, but new technologies such as new energy have an impact on the automobile industry. Whether Honda's idea of technical inheritance can be transformed as it is is a question mark. However, Honda has made a transformation decision from the company's strategic level.
Electrification Strategy 2030, starting from China
On October 14, 2021, Honda China held an "Electrification Strategy Conference" with several timetables.
Honda aims to achieve 40 percent of overall vehicle sales of electric and hydrogen-fueled vehicles by 2030, 80 percent by 2035, and 100 percent by 2040. The transformation aims to achieve "carbon neutrality" and "zero traffic fatalities" by 2050. For the Chinese market, Honda decided not to introduce fuel vehicles after 2030, that is, the transition time is more than 8 years.
This is a strategic initiative led by the newly appointed CEO Mibu Toshihiro. In order to achieve this goal, Honda will build a new energy plant in 2024 and release 10 new pure electric models through GAC Honda and Dongfeng Honda within five years. Honda will continue to cooperate with CATL to develop "high-performance batteries", which means that it will continue to take the route of ternary lithium batteries, rather than lithium iron phosphate batteries.
It is worth noting that Honda's strategic launch was held in China. This not only means to pay attention to the Chinese market, I am afraid that in the process of electrification, two Chinese partners are also needed to provide specific technical cooperation. Both Dongfeng and GAC are continuing to make large investments in "electrification".
From this point of view, Honda is quite pragmatic, acknowledging the technical prowess of its Chinese partners, who can not only contribute to the channel and market side, but also truly participate in the initial design of the model, rather than simply responsible for the low-tech "localization" work. In Honda's official words, e:N is "tailored to Chinese consumers centered on the Chinese team."
The electric sub-brand e:N was released simultaneously with the electric strategy. At the press conference, Honda officially launched the pure electric architecture e:N Architecture. According to the different driving methods, it is divided into e:N Architecture F and e:N Architecture W, the former mainly attacking the front-drive, used for small and medium-sized cars; the latter including rear-drive and full-drive, used for medium and large cars.
Dongfeng Honda e:NS1 and GAC Honda e:NP1 are two mass production models, both belonging to the e:N Architecture F platform, and will be launched in the spring of 2022.
There is also an important message here, e:N series products, will seek to export overseas.
In the past, joint ventures were very taboo about exporting Chinese-made models overseas, ostensibly because they were worried about breaking the global capacity deployment, but in most cases they didn't even need the reasons because no one mentioned them. This shows the voice of foreign parties to control the channels and production capacity brought about by technology, supply chain and quality control, and also reveals that China's right to speak about channels and production is limited to China.
This is not a honda problem, but an unspoken rule for all joint venture car companies. This is not a concern about profit sharing, but do not want China to get involved in the overseas market of the joint venture brand.
For a wholly-owned Tesla, there is no such problem. In the case of the delay in production after the completion of the Berlin project, the demand for the European market in the second half of the year is completely provided by the production capacity of the Shanghai Lingang base.
Now, Honda's plan means that both partners (Honda + GAC, Honda + Dongfeng) will break this "convention" and expand the scope of cooperation between the two sides to the world (at the beginning, it may only be arranged to cover part of the market).
This reaffirms the official statement that the Chinese partner will play a more important technical role in Honda's electric strategy. Technology can drive production, channels and markets, and capital cannot play the same role. This is a simple truth, but only empirical evidence can make us see it more clearly.
It turns out that Honda has already brewed a production capacity plan. On January 5, 2022, Honda signed the contract of the world's first new energy benchmarking plant project in Wuhan. The two sides plan to invest 10 billion yuan, plan production capacity of 256,000 vehicles / year, and creatively introduce automated production technology in the final assembly process (usually the final assembly process is less automated). The plant will be put into operation in 2024 and will be stable in the same year.
Although the new plant was signed after the New Year, the plan and electrification strategy were clearly implemented in tandem.
Guangqi Honda's new energy plant has been completed in 2019, and the current information is that it will expand the existing plant to add 120,000 new energy production capacity, and put into operation in March 2024. In this way, the new energy production capacity of Dongben and Guangben will be landed almost at the same time.
Not only that, the new marketing model, as well as research and development projects such as intelligent driving and intelligent cockpit, are included in Honda's electrification strategy.
Some people think that Honda is more conservative in its new energy capacity planning, but in fact, this is a misreading, Honda can not plan hundreds of thousands of vehicles at a time like Toyota or Volkswagen, because this is not commensurate with its volume.
In fact, Volkswagen's ID. series also needs to take longer than expected to climb capacity. Prior to this, the 600,000 new energy production capacity of North and South Volkswagen may have to experience a relatively long period of capacity reduction, and Volkswagen has preset production capacity ahead of time and borne considerable financial costs.
This cannot be said to be a decision-making error, but only that Volkswagen must bear the opportunity cost. Anyway, the same cost, Honda can not be carried. So Honda's planning steps are relatively small, which is reasonable. Honda also needs to look at the market feedback of new energy products to decide whether to increase production capacity.
Different approaches in the European and American markets
However, as a multinational company, Honda implements a global chess game, and there is no difference between Volkswagen and Toyota.
For the EU market that is constantly tightening emissions, Honda seems to be very aggressive, not only announcing the closure of its factories in the UK (related to Brexit), but also announcing that it will stop production of fuel vehicles from 2022 and replace them with EVs and PHEVs.
The direct reason, of course, is that the EU's CO2 emissions have been reduced to 90g/km. For every 1g of each vehicle, a fine of 95 euros is imposed. Based on Honda's performance in the EU in 2021, it will face a fine of 2.5 billion yuan in 2022.
Honda had intended to ally with Tesla to share carbon emissions. In return, a fee is paid to the latter. However, there is another company in the alliance that needs Tesla to carry carbon emissions - FCA. After FCA and PSA jointly established Strandtis, how to deal with the alliance problem, and Tesla's production in Germany was delayed (at that time, production was scheduled to start in the second half of 2021), all brought variables to the alliance.
In response to the uncertainty, Honda first cut the European production capacity of fuel vehicles, and then launched the pure electric car Honda E. For the sales of the car in 2022, Honda did not have much expectations, and selling 10,000 units was a standard. The big move must be cooled down until early 2024, when Honda's Chinese production capacity may come in handy.
In the U.S., Honda sold 1.466 million units for the full year last year, up 8.9 percent year-on-year. At the same time, it is the second largest hybrid car dealer, and in 2021, HEV sales will increase by 67% compared with 2020, reaching a record 107,100 units.
In 2024, Honda also intends to officially deliver pure electric products in the United States, almost in sync with the Chinese market. Due to the development of the Chinese market, Honda's sales in China have now surpassed those in the United States. However, the U.S. remains Honda's largest overseas market from a profit perspective (due to Honda's sole proprietorship in the U.S.).
Honda's previous alliance with General Motors was remarkable. In the alliance between the two, Honda will use the universal Aotene platform to develop pure electric products for North America. In return, Honda will license small fuel engine technology.
Of course, the agreement between the two parties includes a package of cooperation (in addition to capital), which is a comprehensive technology-procurement-production collaboration alliance. Hydrogen fuel cells, automatic driving, E-E architecture adapted to pure electricity, in-vehicle entertainment information systems, Vehicle Networking and other technologies are within the scope of cooperation, highlighting the high degree of strategic mutual trust between the two sides, and the confidence to avoid the "homogeneous competition" between the two.
Honda adjusts global deployment
In 2022, Honda's global capacity plan has been clarified.
In South America and Australia, Honda has long adopted a contraction strategy (Honda has closed factories in Australia and Argentina successively). These markets themselves are under the radiation of the Us-Us- European and local markets, and the growth has long been looked down upon, which Honda understands.
And in India, Honda closed one of its two plants in early 2021, cutting capacity by 40 percent, which was unexpected. In Southeast Asia, Honda focuses on Thailand and Indonesia, which is different from Toyota's all-round attack.
For Honda, there is "more" uncertainty about the future of the European business, not because the European carbon emission policy is ahead of Honda's deployment, but because Honda has no intention of adding chips in Europe. So taking the "hussar" style, not investing on a large scale, was determined to be the future style of Honda's European business. Honda seems to be radical in Europe, but in fact it adopts a conservative strategy to deal with it, not seeking merit, but seeking no fault.
This deployment, much like that of its ally General Motors, is to abandon a global presence and focus strategically on China and the United States.
In this way, it can be seen that Honda's global strategic deployment, the local and Chinese markets have a certain linkage relationship, and they all adopt a bold strategic offensive style; while in North America, the group approach means that procurement and development cost considerations have become the focus of Honda's work.
The contrarian growth of the Chinese market has greatly improved the position of Honda's global planning. China means not only the present, but also the future. In the US market, it is more "now" because there is "relative" uncertainty about the future direction of US industrial policy.
Obviously, China's growth is better, and the element of uncertainty is "quite low". This judgment prompted Honda to invest more money in China. The so-called strategic radicalism and conservatism depend on the growth of the market, but also on the long-term nature of market endowments and policies.
Honda in 2022 has already focused on adjusting global deployments in 2025, and these new capacity deployments will all be in place in 2024. 【Copyright Notice】This article is the original manuscript of Automan Media, and may not be reproduced without authorization.