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
