How Honda Hammered Out Its New Accord

Honda Motor Co. set out to develop a new car in 1985, and within months an uproar ensued. Make the car roomy and reliable, demanded U.S. sales reps. Make it sexy and sporty, clamored Japanese dealers. Engineers tinkered with new engines, and marketers fretted over diverging tastes. All the while, bean counters advocated the established practice of selling the same car in all markets--a world car. Tempers flared, paralysis set in, and deadlines were missed. "It was not a happy time," recalls project leader Takeomi Miyoshi.

Amid all the confusion, Honda ended up blowing extra millions on two half-successful models. A five-cylinder car called the Vigor, designed for Japanese tastes, ultimately sold well in Japan but not in the U.S. A four-cylinder model, the Accord, wowed U.S. buyers, becoming America's No. 1 seller for the past three years--but it bombed in Japan. So as Honda started on the '94 Accord, due out next fall, it made a basic decision: Forget the world car. Develop variations of the Accord for the U.S., Europe, and Japan. But save lots of money by making at least 50% of each car the same--including the chassis and transmission.

NO MORE SNAFUS. This should avoid many of the last go-round's miscues. In 1986, for instance, Honda's research and development team unveiled a peppy, five-cylinder, in-line engine--and pushed it for the Accord. Right away, Honda's U.S. staff balked. Lining the cylinders up front-to-rear cut into interior space, a major mistake for the U.S. market. And Honda had a U.S. four-cylinder-engine factory that would be hard to retool.

There was a further dispute over styling: Should the body be customized for different markets? Honda's consensus management, left over from its startup days, meant nothing happened unless everyone agreed. But by this time, the company was so bureaucratic that talks went in circles. Time ran out. So Honda settled on a single Accord, though at 66 inches wide, a norm in Japan, it's 2 to 4 inches narrower than rival models. To use its new engine, Honda developed the Vigor.

All the waffling was too much for Honda President Nobuhiko Kawamoto. "The mistake I won't tolerate again is indecision," he says. In March, 1991, he ordered the biggest restructuring in Honda's history, splitting the company along product lines and taking personal control of autos. This year, he divided Honda's global auto operations into regions to better address local tastes. Designers in the U.S., Europe, and Japan could give their Accords unique looks, as long as they followed two guidelines: Halve development costs vs. the previous model and make wide use of shared parts.

To make the work go more smoothly, Honda got extra U.S. input early. Starting in August, 1990, some 56 engineers from Honda's Marysville (Ohio) plant came with their families to Japan for up to three years. Their mission: help design equipment needed to make the '94 Accord in Ohio.

Just six months into development--instead of last time's 18 months--Honda held a brainstorming session that included about 100 marketing, sales, and design people from the U.S. and Britain, where its new European factory just opened. Shinya Iwakura, a top Honda executive, estimates that Honda's U.S. contingent contributed 30% to the development of the four-door Accord, vs. 10% for the previous model, and 80% to the Accord station wagon, vs. 50% on its earlier model.

RISKY MOVE. The U.S. Accord is still secret. But Iwakura says it will be a bit shorter, wider, and more "luxurious feeling" than the current model. It will look sportier, Miyoshi adds. But it won't change radically. In fact, Honda may not offer a V-6 engine, since Iwakura hopes to get similar power from a new four--plus save money and preserve fuel economy. That's risky: The Big Three, Toyota, and Mazda all offer a V-6.

Whatever Honda decides, it has little room for error. The Accord accounts for half the company's U.S. unit sales. And Ford covets Accord's No. 1 ranking. Through November, 359,146 Accords had been sold, only 14,719 more than Ford's Taurus, according to Ward's Automotive Reports. Accord's market share is down a tad this year to 4.8%, vs. Taurus' 4.6% and Toyota Camry's 3.4%. And Ford is selling heavily to rental car fleets in hopes of edging ahead. The question now: Will Honda's new approach produce an Accord that can remain the king of family sedans?

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