Return to Previous Page

Honda Cars India Ltd.'s Quality Journey

CASE STUDY, OPERATIONS MANAGEMENT
ET Cases, 10 pages
AUTHOR(S) : R. Muthukumar and Dr. Nagendra V. Chowdary

Case Preview

Honda Cars India Ltd.’s Quality Journey

 

“Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction.”

– Company Principle (Mission Statement), Honda Cars India Ltd.

 

Honda Cars India Ltd. (HCIL), a subsidiary of the Japan-based Honda Motor Company, began operations in December 1995 for the production, marketing and export of passenger cars in India. The company’s product range included – Honda Brio, Honda Amaze, Honda City and Honda CR-V. After lackluster performance initially, HCIL started meticulous quality initiatives and focused on improved quality in its products through TQM approach.

About HCIL

The company started its operations through a Joint Venture between HMC and Usha International of Siddharth Shriram Group with a name Honda Siel Cars India Ltd (HSCI). HCIL’s first manufacturing unit was set up at Greater Noida, U P in 1997.

The company started its innings in India with a portfolio of premium offerings priced upwards of 7 lakh comprising of sedans like City and Civic and premium Sports Utility Vehicle CR-V. However, due to high competition, HCIL could not get good sales. In addition, like other overseas automobile companies, HCIL too, did not focus enough on making the cars that Indian consumers wished for. They thought Indian consumers to be similar to other global markets’ consumers.

The passenger car market was oligopolistic in nature during that time and continued to be same. While Maruti Suzuki continued to hold around 50% market share, there was a fierce competition amongst other incumbent players. Among them HCIL could achieve only meager market share (Exhibit I (a) and Exhibit I (b)).............

Quality Initiatives

HCIL started a comprehensive quality improvement initiative in 2010-11.

Whenever, there was a serious crisis on the plant floor that would lead to a spontaneous meeting. The unplanned, shapeless gatherings called waigaya6 were the hallmark of the Honda Way. There would be heated discussion and the free flow of ideas that would lead to chaotic communication, open disagreement, and inharmonious decision making. There was no time limit for such sudden meetings. The participants would be Factory Floor Managers, Assembly Line Associates (that’s Honda’s term for workers), and quality control experts...............

Reaping Benefits

With a focus on quality and its quality initiatives, HCIL’s new cars in 2014, the Amaze and the City, and the diesel engine as well, transformed its Indian operations (Exhibit V). Based on marketing research and feedback from Quality Center, the Mobilio MPV and Jazz were too launched in FY14-15. These cars were designed keeping in mind the requirements of an average Indian family, which covered all key aspects of superior technology, quality, comfort, price and fuel efficiency..............

The Road Ahead

Honda chalked out a very simple strategy to secure its long-term Indian future. Hironori Kanayama, the then President and CEO, Honda Cars India said, “All new models after the Jazz and the Mobilio will be raised by Honda India without any monetary assistance from Honda Japan.” Till now he added, “We have required help but we plan to be self-sufficient in the future as Honda India is growing up fast and a grown up cannot depend on its parents.”.............

Assignment Questions

I. Define Quality and TQM.

II. Discuss the benefits of improved quality and TQM.

III. .........................

Exhibits

Exhibit I (a): Market Share Trends – Passenger Cars in India (2001-2008)

Exhibit I (b): Sales and Market Share – Passenger Cars in India (1998-2003)

Exhibit II: Market Quality Enhancement System at Honda

Exhibit III: Honda’s Quality Cycle

Exhibit IV (a): Honda’s Process to Create Enhanced Quality

Exhibit IV (b): Quality Improvement Operational Process at Honda

Exhibit V: HCIL’s Turnaround

Exhibit VI (a): Top 10 Cars based on Their Scores (2014)

Exhibit VI (b): Top Three Cars per Segment in Initial Quality (2014)

Exhibit VII (A): HCIL’s Capacity Utilization

Exhibit VII (B): HSCI’s Capacity Utilization

Exhibit VIII: HCIL’s Sales

Teaching Note Preview

Honda Cars India Ltd.’s Quality Journey

 

Synopsis

This case study is meant for learners pursuing a course in Operations Management. The case study helps to understand and describe quality and TQM in the context of Honda Cars India Ltd. (HCIL), a subsidiary of Japan-based Honda Motor Company. HCIL began its operations in December 1995 for the production, marketing and export of passenger cars in India. The company’s product range includes Honda Brio, Honda Amaze, Honda City and Honda CR-V. After a lackluster performance in the initial days, HCIL started meticulous quality initiatives and focused on improved quality in its products through TQM approach. The case study gives scope to debate how focus on quality and TQM approach benefitted HCIL. It has to be seen whether the quality initiatives will be enough to the growth momentum for long drive.

Prerequisite Conceptual Understanding

The participants were asked to read the following chapter given as mandatory reading at the end of the case study to participate effectively and to enrich the learning outcomes:

  • • Jay Heizer, et al., “Managing Quality”, Operations Management, 9th Edition, Pearson Education, 2008

 

Case Positioning and Setting

This case study can be used in MBA/Executive MBA program for Operations Management course to illustrate the concept of ‘TQM’ and exemplify its strategic implications.

Assignment Questions

  • I. Define Quality and TQM.
  • II. Discuss the benefits of improved quality and TQM.
  • III. ................

 

Suggested Orchestration

The classroom discussion and analysis for this case study could be summarized and facilitated under two broad sections [Exhibit (TN)-I].............

$5.48
Rs 0
Product code: OM-1-0033, OM-1-0033A

Abstract


This case study is meant for learners pursuing a course in Operations Management. The case study helps to understand and describe quality and TQM in the context of Honda Cars India Ltd. (HCIL), a subsidiary of Japan-based Honda Motor Company. HCIL began its operations in December 1995 for the production, marketing and export of passenger cars in India. The company's product range includes Honda Brio, Honda Amaze, Honda City and Honda CR-V. After a lackluster performance in the initial days, HCIL started meticulous quality initiatives and focused on improved quality in its products through TQM approach. The case study gives scope to debate how focus on quality and TQM approach benefitted HCIL. It has to be seen whether the quality initiatives will be enough to the growth momentum for long drive.



Pedagogical Objectives

  • To discuss and describe Quality and TQM
  • To debate on the benefits of improved quality and TQM
  • To elucidate how benchmarking is used in TQM
  • To discuss how HCIL implements quality and continuous improvement in its plants

Case Positioning and Setting
This case study can be used in MBA/Executive MBA program for Operations Management course to illustrate the concept of 'TQM' and exemplify its strategic implications.





This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)


** If you need to make copies, you must purchase the corresponding number of permissions based on the number of participants. Electronic downloadable links (PDFs, PPTs, Supplements etc.) are available immediately after purchase. Single copy can be used only for evaluation purpose. Unauthorized distribution of these files is prohibited pursuant to term of use of this website.

No. of Copies
$5.48
Rs 0

Related products




Request for an Inspection Copy

(Strictly for Review Purpose, Not to be Used for Classroom Discussion/Trainings)