Honda's move to appoint Takahiro Hachigo as the new president succeeding current CEO and president Takanobu Ito is aimed at helping the company drive its global operations further.
IHS Automotive perspective | |
Significance | Honda announced that the current president, chief executive officer and representative director, Takanobu Ito, will step down with effect from June 2015. |
Implications | Takahiro Hachigo, currently a managing officer, will become senior managing officer effective in April 2015, and will become president, chief executive officer and representative director in late June 2015. |
Outlook | With the succession of new president, Honda is looking to kick-start the introduction of delayed model launches and set the tone for new strategy and implementation going forward. |
Honda has announced that current president and chief executive officer (CEO), Takanobu Ito will step down with effect from June 2015, according to a company statement. However, Ito will continue to remain on the board and assume the post of director and advisor to Honda. Takahiro Hachigo, currently a managing officer, will become senior managing officer effective in April 2015, and will become president, chief executive officer and representative director in late June 2015 following the final decision by the board of directors. Honda also announced other management changes: Koichi Fukuo will be appointed as senior managing officer and director. He currently holds the position of senior managing officer. Yoshiyuki Matsumoto and Yoshi Yamane will become senior managing officers and directors from their current post of managing officer. These changes in management will take effect from June 2015. Masayuki Igarashi will be promoted to operating officer and director from his current position of director of Asian Honda Motor with effect from April 2015.
Honda said that the move to appoint Takahiro Hachigo to succeed current CEO and president Takanobu Ito is aimed at helping the company drive its global operations further. Hachigo was promoted to managing officer of Honda in April 2014. In 2012, he became vice-president and director of Honda Motor Europe Ltd and was later appointed president of the company's European R&D operations in the UK. Hachigo moved to China in 2013, where he led development, purchasing and motor technology. He worked in the US as senior vice-president of Honda R&D Americas from 2004–2006. Prior to that, Hachigo spearheaded the development of the first-generation US-built Odyssey minivan, which was launched in 1999. Hachigo went on to assume responsibilities as the person-in-charge of developing the second generation CR-V SUV.
Outlook and implications
Takanobu Ito was appointed as the president of Honda in June 2009 (see Japan: 23 February 2009: Honda Appoints New President and CEO, Makes Other Management Changes). During the six years under Ito's leadership, Honda was able to actively evolve its global manufacturing structure, notably the establishment of automobile plants in Mexico, Brazil, Thailand, Indonesia, India and China. Moreover, under Ito's leadership the Japanese automaker was able to solidify its business foundation by enhancing its product development capabilities – from the popular N-series minivehicles, to automobile powertrain development as represented by the Earth Dreams Technology, to the establishment of product development structures in each of Honda's global regional operations. Furthermore, he also led an effort to launch Honda's first commercial fuel-cell vehicle (FCV) which is expected to go on sale during 2016 (see Japan: 17 November 2014: Honda unveils next-generation concept FCV in Japan).
Ito's tenure as Honda's chief was far from smooth as natural disasters in Japan and Thailand hit production and profits hard during 2011. Adding to the woes, Ito faced a huge challenge on the quality front as the automaker issued several recalls in the subsequent years (see Japan: 23 October 2014: Honda recalls new Fit hybrid for fifth time in Japan and Japan: 10 July 2014: Honda recalls more than 175,000 vehicles in Japan over engine control defect). In addition, during Ito's tenure Honda was marred with the recall crisis globally due to potentially defective airbags supplied by Takata (see World: 14 November 2014: Honda widens global recall linked to faulty Takata airbags – report). The massive recalls resulted in delays to the introduction of several products and scrapping of Honda's plan of selling 6 million vehicles annually by 2017. Recently, the company announced plans to streamline its product offerings over the next few years and prune model variations (see Japan: 16 February 2015: Honda to streamline product offerings, withdraws 2017 global sales target and no longer considering aid for Takata). Owing to the recalls and delayed model introductions, Honda also trimmed its profit forecast for the second time in the current fiscal year (see Japan: 30 January 2015: Honda says Q3 FY 2014/15 net income fell 15.1% y/y, revises full-year forecast). Ito's policies of bypassing group suppliers and tapping global vendors for latest technology also did not go well within the company. These reforms were under threat although the executive reportedly said he was looking to seek another term (see Japan: 12 February 2015: Honda starts sales of new Jade MPV, CEO to push for supplier reforms despite criticism – report).
Going forward, Honda is looking to put the recall issues behind it under the new leadership. With the coming in of new president, the automaker would be eyeing to kick-start the model launch programme that has taken a backseat for quite some time. In addition, Honda would also be hoping that it will bring in a new direction and strategy implementation that would place the company in a better position in following years. Among specific actions, supplier reforms started by Ito may be moderated or reversed by the new management.