I came across this an hour or so ago. I know Honda's quality has been slipping, and I was hopeful someone at Honda also noticed. Indeed they have, and it's all the way at the top. Short version: Honda considers themselves in a quality crisis, and chief executive Hachigo has announced that he is moving the independent R&D teams in-house and cutting some executive positions in order to centralize decision making.
The article is a good read since Hachigo has clearly defined goals and plans to bring quality back up, including cutting the number of model options drastically. They have too many global models, too many options in each model (example--the US Accord has 10 different model options, including three hybrid models), and because of the complexity of catering to different markets with different products, engineering quality has slipped due to having so many designs out there.But after a slew of recalls since 2014 for problems with components such as airbags, sliding doors and engines, Honda’s status as a benchmark for quality and efficiency has been seriously damaged - and the quality crisis is hitting profits.
According to five Honda insiders, quality blunders have helped squeeze the operating margin at its global automotive business to 2%-3% - giving it less room for maneuver just as bigger rivals are building partnerships and overhauling their operations to become stronger.
That’s in stark contrast to Honda’s motorcycle business which has already brought its R&D division in-house and has a margin of 13.9%.
In J.D. Power’s study of vehicle dependability in the United States, one of Honda’s two main auto markets along with China, the Japanese brand fell to 18th place this year from 5th in 2015 and 4th in 2002, its highest ranking.
“These moves we’re making today will decide our eventual fate: whether we’re going to be in business as an independent player 10 to 15 years from now,” a Honda source told Reuters.
Two company sources said Hachigo plans to eliminate the top management roles at Honda R&D and will probably turn some into divisional managers within Honda Motor.
One source said the aim was: “to centralize the company’s fragmented, localized decision-making power back at the mothership in Tokyo.”
According to the engineer, Honda has also introduced an internal quality target to cut global recalls by two-thirds in the next few years from a crisis level of 6 million in 2017.