Toshihiro Mibe, President and CEO of Honda (Credit: Business Today)
On April 12, Japan's Honda held a press conference on the "four-wheel electrification" roadmap, showing the technical route of Honda's supply chain to electrification. Leading the change was Toshihiro Mibu, president and CEO of Honda Motor Company in April last year.
A year ago, Toshihiro Mibu believed that "solving the earth's environmental problems" would become the trend of the times in the future. At the inauguration, Honda said that by 2050 Honda will achieve carbon neutrality through all products and corporate activities it has participated in, and announced a statement that Honda engines are de-engined.
In this issue, the first logistics network "Learning supply chain from the top 500" decodes the automotive supply chain and logistics layout of Japan's second largest car company, Honda Motor, and the dynamics of the electric vehicle market.
First, combine vertical and horizontal to reorganize the Pattern of Japanese Automobiles
Under the pressure of the transformation of electrification, networking, intelligence and sharing, Japanese car companies have cross-linked car companies and vertically integrated parts and components companies through cross-shareholding, investment holding, mergers and acquisitions, etc., forming a three-legged alliance pattern of Japanese car companies.
The three-legged big alliance pattern of Japanese car companies
1. The third major league: Honda New League
In 2019, Takahiro Hachigo, then president of Honda, said that "once the alliance is formed, the other side will 'point fingers' at our management", so there is no will to form an alliance.
However, in 2020, in the face of the strong development of the Renault-Nissan-Mitsubishi Alliance and the Toyota Alliance, Honda "Face-Punch" announced that it will cooperate with GM to jointly develop two new Honda pure electric models based on the GM Ultium battery and a highly flexible global electric vehicle platform. The alliance is relatively limited in form, limited to North America and does not involve cross-shareholding.
(Honda and General Motors alliance Photo source: 9carthai)
Toshihiro Mibu, Honda Global CEO, said publicly: "If through the form of alliance, Honda can complete the planned goals as soon as possible, then we are willing to form a new electrification alliance." ”
The electrification of automobiles will revolutionize the production methods of automobiles, in which engines, transmissions, etc. are no longer needed, while battery technology architectures, platforms, charging devices, etc. will usher in new markets.
2. The second largest alliance: Toyota Alliance
Toyota, Mazda and Suzuki hold shares in each other, acquired Subaru, Daihatsu, and Hino to form a "Toyota Alliance", and the next goal is also to target electrified vehicles, and its cooperative vehicles all use Toyota's supplier system to jointly develop and share a new generation of pure electric vehicle architecture.
The so-called "Toyota Alliance" is ostensibly collaborative sharing. Digging deep into the points of interest is undoubtedly a way for small enterprises to survive and compete in the market.
3. First major league: Renault-Nissan-Mitsubishi alliance
The Renault-Nissan-Mitsubishi Alliance, whose chairman, Jean-Dominique Senard, said the new business model will maximize each company's assets and execution capabilities to maximize overall benefits.
In January, the Renault-Nissan-Mitsubishi Alliance developed a common 2030 roadmap for all-electric vehicles and connected mobility, with a commitment of €23 billion ($26 billion) in electrification over the next five years and the launch of 35 new electric models by 2030.
Jean-Dominique Senard, chairman of the Renault-Nissan-Mitsubishi Alliance, said again, "The alliance will become carbon neutral by 2050." "In terms of shareholding, Renault owns 43.4% of Nissan's shares and the voting rights of the board of directors, while Nissan only holds 15% of Renault's shares and has no voting rights, so there is always a slight imbalance in some decisions.
(Source: Auto Buzz)
Due to the political forces and interests behind it, can the alliance release a seemingly ideal plan and future, and in the process of implementation, can it truly share technology, resources and benefits without reservation and carry out smoothly?
Second, Japan's second, Honda's supply chain and logistics layout
Honda, founded in 1948, is the world's largest motorcycle manufacturer, with one of the best cars in terms of production and scale.
Honda's global auto sales in 2021 reached 4.48 million units, ranking seventh in the global auto sales list.
1. Production and sales layout
Honda has more than 130 production bases in 29 countries and regions around the world, including motorcycles, automobiles and so on.
(Source: Honda official website)
2. Supply chain collaboration
Honda builds environmentally-load-reducing supply chains with customers around the world, providing customers with rapid and stable services, and continuously improving logistics efficiency while strengthening the sustainability of the supply chain in the field of procurement and logistics, including the entire supply process from the parts that make up the product from the supplier to the factory and then from the factory to the sales store.
Honda Supply Chain Management Process (Source: Honda Official Website)
3. Supplier management
The "Procurement Concept" formulated and the "Three Principles of Procurement" of free trade, equal transaction and respect for suppliers are continuously strengthened through fair, just and highly transparent transactions.
Since 2011, the Procurement Environment Conference has been held, and now the Procurement Sustainability Conference, to further promote the low-carbon transformation through the global supply chain.
Regularly implement ESG surveys to control supplier quality.
ESG Survey Process (Source: Honda Website)
4. Logistics resources and layout
Through a global logistics management system, Honda coordinates and cooperates with six major regions of the world to jointly promote carbon reduction activities in logistics and reduce the environmental load of logistics.
Honda Global Logistics Management System (Honda official website)
Honda's logistics moves the parts that make up the product from the supplier to the factory, and then from the factory to the sales store with the manufactured products and repair parts.
From the upstream of the manufacturing process to the downstream mass transportation, while logistics efficiency, reducing environmental load and compliance risk management are also regarded as important concerns, such as promoting "container transportation efficiency".
Honda logistics model (Source: Honda official website)
5. Layout of industrial chain in China
In the face of the rapid development of the Chinese market, Honda actively introduces "new products" and "new technologies", and constantly builds and improves the development and production system.
Honda China layout (Source: Palm Chain Finishing)
At present, there are two manufacturers in China, Guangzhou Honda and Dongfeng Honda, which are joint venture branches of Honda, with annual production capacity of 480,000 vehicles and 600,000 vehicles, respectively.
Third, the electric vehicle market, the future depicted by Honda
In January 2020, Japan's Ministry of Economy, Trade and Industry (METI) released its Green Growth Strategy, which mentions that by 2035 at the latest, it will achieve 100% electrification of new passenger cars (EV+PHEV).
According to the Nihon Keizai Shimbun, in January 2021, Nissan announced that it would stop the research and development of hydrogen fuel cells and concentrate on the development of electrified vehicles, mainly due to the high cost of hydrogen energy vehicles, complex and difficult to manufacture, transport, and use.
Instead of abandoning hydrogen-powered vehicles, Japan's Honda Motor motor has paid more attention to electrification, and in April 2021, it proposed to stop selling new cars with internal combustion engines by 2040 and convert them to pure electric or fuel cell vehicles.
However, shortly after the proposal, in August 2021, Honda Motor announced the termination of the production of hydrogen fuel cell vehicles (FCVs) fueled by hydrogen fuel, mainly because hydrogen fuel vehicles need to invest a lot of money and technology, and the performance of the market is also unbearable.
In contrast, the electrification of cars is another better way to achieve carbon neutrality. From an economic point of view, the electric vehicle market can be described as a "blue ocean".
On April 19, 2022, Honda Official News reviewed the development of Honda Motor Company's president and CEO in the automotive electrification layout for the year since he took office in April last year. The management mechanisms emphasized by Toshihiro Mibu on "pan petrochemicals for existing businesses" and "preparing for new growth" have laid an important foundation for strengthening honda's automotive electrification development and establishing an image of electrification.
Toshihiro Mibe, President and CEO of Honda Motor Company
Shinji Aoyama, head of electrification's new business development headquarters since April 2022, said, "An important issue in the era of electric vehicles is global battery procurement. Strengthening external partnerships, ensuring stable procurement of liquid lithium-ion batteries needed from now on and accelerating the development of next-generation batteries are two important ways to realize the era of electric vehicles. ”
Honda also announced a deepening partnership with GM to jointly develop a range of affordable electric vehicles. GM Chairman and CEO Mary Bora and Mibe Toshihiro also noted in a joint statement that the two companies will leverage their technology, design and procurement strategies. The price of the vehicles developed is expected to be below $30,000. Compared with the latest price of Tesla, the electric car pilot brand, which is about $46,000, it is more attractive.
In the face of great changes in the industry, the world's car companies and traditional auto parts companies should actively embrace electrification and reshape and stabilize the automotive supply chain. While the epidemic continues, Japan's Honda issued a notice of production adjustment, but due to a combination of factors such as the overseas epidemic and semiconductor shortages, production in April was still unstable.
Survival of the fittest, who can withstand this wave and fly into the next outlet.
Resources:
"Honda 2021 Sustainability Report" Honda official website