Honda has apparently instructed its suppliers to reduce their prices significantly as the carmaker aims to cut over 1.5 trillion yen (RM38.6 billion) in costs by 2030, Reuters has reported in an exclusive story, citing sighted internal documents and two people familiar with the matter.
The news agency writes that in spring this year, Honda managers told major suppliers at a convention centre in Utsunomiya (a city near the carmaker’s R&D facility) that the company was looking at sourcing more components from Chinese suppliers, and urged them to do the same where possible.
Each supplier was reportedly later presented with company-specific cost-cutting targets, which were “extremely large” and not immediately clear if they would be achievable, a source told the news agency.
Documents seen by Reuters reveal that Honda is aiming to cut costs by 30% in three categories – pressed and forged components, electrical parts and parts related to software-defined vehicles (SDV) – in order to better compete with Chinese suppliers.
Honda’s tier-one suppliers were also reportedly asked to review how they procured materials and were urged to use standardised parts from second- and third-tier suppliers to help keep costs down.
Another source said that before this spring meeting, Honda had not given the impression that aggressive cost-cutting was needed, but now, the situation appeared to have “no room for delay”.
Reuters did reach out to Honda for comment, and a spokesperson said the carmaker is working with suppliers globally to improve competitiveness and cut costs – including through using standardised parts – but refrained from commenting on specific cost-reduction targets or details of supplier discussions.
Honda’s EV backtrack will be a very expensive U-turn – according to Reuters, related losses are expected to ultimately exceed US$12 billion (RM48.5 billion), which is one of the biggest hits among global carmakers. In May, Honda reported its first-ever annual loss as a publicly-traded company.
After failing to merge last year, Honda and Nissan recently announced that they would jointly develop standardised ECUs for SDVs. The aim is to roll out an architecture built around said ECUs from the 2029 financial year.
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honda should sell 49% of their shares to geely t then appoint Dr Lee Run Chong to become Honda CEO . in fact they can even hire proton to help them convert LHD cars to RHD for japan market.
If this cost cutting strategy is push to high limits, then the only Japan part of Honda left is the name Honda. Every part made or supplied by China companies.
like iphone maybe? or u think 99% of iphone components is made by tim in cupertino, USA?
Soichiro rolling in his grave. This is what happens when an engineering driven carmaker gives majority boardroom seats to accountants.
By 2030…the top 5 universal car brands will be Chinese.
Japanese marques will be trailing far far behind,if they dont innovate in a massive way.
Now Honda is already sounding the alarm.
Now you understand why Honda Msia is giving huge rebates to clear unsold stocks which are overpriced.
the downfall of honda and malaysia need to be studied extensively in all higher institutions
So honda will have more quality issue future?
Definitely. Quality on par with Acura.
Don’t worry Toyota tards, Toyota is next. The Japanese scambags have been robbing the customers with mediocre facelifts while charging an arm and a leg for the privilege. With the Chinese EVs coming in they are now forced to offer rebates every month. That wont save them. The talk of quality and reliability are just lame old untrue arguments that anyone who has driven or owned Chinese EVs can attest to as being nothing more than propaganda from the auto makers of Japan. Time to die japanese garbo automaker.
Syedmokhtar to blame
Looks like Honda is drowning too.
The current lineup car alredy scream cost cutting and cheap feeling compared to last time..if cost cutting further will be below perodua level alredy..dont do that honda..