Honda will create the ultimate internal combustion engine

No. 1 in fuel economy in every category

Our world, where the trend was toward high performance, high output, and larger, more luxurious products, underwent a sea change following the Lehman Shock. Additionally, the market in emerging nations has expanded greatly, to the point that it is no exaggeration to describe that segment as a major focus of our business. Faced with these changes, Honda resolved to steer its operations toward creating inexpensive products that combine superior performance with fuel economy, and this policy bore fruit during 2011. By rapidly steering for this new course, we accelerated our research operations and gained the ability to move from launching a project to bringing that product to market faster than our competitors. Our only misstep was a slight delay in reading the market and taking action.
The EARTH DREAMS TECHNOLOGY initiative has allowed us not only to erase that delay, but also to prepare to overtake our competitors' efforts. Our goal is to bring to market a series of products within the next three years and to become No. 1 in fuel economy in every category. But this is only a point on our journey. We've already set even higher objectives and started to develop the next generation of technologies.

Toward differentiation that exceeds expectations

The vehicle equipped with the electric SH-AWD
new hybrid system in EARTH DREAMS TECHNOLOGY series

I believe that internal combustion technology, including both gasoline- and diesel-powered variants, has another 20 or 30 years to play the leading role. There is still room left for internal comobustion engines to evolve, and based on recent progress, I think that we'll see thermal efficiency rise to 50 percent. If I were to describe my greatest dream as an engineer, it would be to achieve 50 kilometers per liter with a simple gasoline engine by taking advantage of across-the-board technological progress in the form of the evolution of transmission and chassis technologies. In my view, Honda's destiny is to create the ultimate internal combustion engine. Humankind may transition to EVs and other means of mobility in the future, but first Honda must create an engine that stands at the zenith of the internal combustion era! Honda is unique in embracing such an approach.
For Honda to fully realize its uniqueness, we must focus not on mere differences, but on differentiation. Just as our founder spoke about the importance of Honda's being in its own element and declared that engineering without personality doesn't have much value, our corporate culture today burns with passion to become No. 1—in short, to create and supply products that are far and away the best of their breed. I'm not talking about achieving 30.1 kilometers per liter when other manufacturers reach 30. Honda strives to employ completely different approaches and new ideas—and in the process, to differentiate itself—in order to reach fuel economy numbers like 40 or 50.
For example, the New Mid series is an excellent example of this drive toward excellence. In our time, creating high-rpm engines embodied the evolution of technology. But New Mid engines only reach half of those levels. This is a proposal of new value, a challenge that completely changes the paradigm. These motorcycles not only deliver dramatically improved fuel economy and use a new technology that competitors can't match in the form of the dual-clutch transmission*, but also let the rider have great fun. One journalist who test-drove a New Mid motorcycle on a test course remarked that he wasn't expecting it to be so fun.
We will continue to simultaneously develop products with powerful engines in the automobile segment as well. Starting with the super-sports category based on our NSX Concept, we will propose new value with products that mix environmental performance with fun by embodying EARTH DREAMS TECHNOLOGY. Technology is also evolving in the power products segment. For example, our hybrid snow blower is extremely easy to use. We're also proposing a new vision for society with products such as smart home systems that comprise a creative energy business.
We've developed a solid technological basis for motorcycles, automobiles, and power products. We will make 2012 a year in which we reliably and quickly deliver products to customers worldwide. In our 100th year since the company's founding, our goal is to be No. 1 by continuing to provide the products desired by customers worldwide—products characterized by exceptional performance and inexpensive prices. I plan to respond to the diverse needs of customers in different regions worldwide while each and every employee in the field thinks continuously about what customers want and how we can change our products and operations to accommodate those desires.

*A geared automatic transmission, developed by Honda as the world's first such technology for motorcycles.

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