Establishing Belgium Honda / 1963

Crossing Boundaries to International Production

Establishing Belgium Honda / 1963

EEC: Leaping the Hurdle into Europe

By June 1961, sales of motorcycles by American Honda Motor (American Honda) were registering some momentum. At about this time, Honda established a wholly owned sales company, European Honda GmbH (European Honda, presently Honda Motor Europe (North) GmbH) in Hamburg, Germany (then West Germany), in order to expand its exports overseas. Just as it had done in the U.S., Honda took up the challenge of opening a European motorcycle market.

Ironically, that month Honda swept the top five spots in the 250 cc and 125 cc classes at the Isle of Man TT racing event in the U.K. It was only the third year that Honda had participated in the event. Honda was indeed making a name for itself throughout Europe and the U.K.

In fact, Honda was at the time the world's leading maker in terms of motorcycle production and exports, and the Honda bikes were making a mark on the racing circuits with outstanding performances in the British Isles. Therefore, if Honda could succeed in the establishment of a European market - already a major one, with annual demand exceeding two million units - it seemed the day would soon come for the company to be recognized as the world's number one motorcycle manufacturer, with the reputation and sales figures to match.

European nations, however, had lately been implementing severely restrictive importation policies in order to protect their domestic industries. Therefore, it was clear that limits on imports and high tariffs would make it hard for Honda to win in this critical market.

It all began when six European countries-West Germany, France, Italy and the three Benelux*1 countries-made the move toward enhanced economic unity. In January 1958, the European Economic Community (EEC) was established (the predecessor of today's European Union, the EU). The leading nations of Western Europe sought greater force in competing with two giant political and industrial powerhouses, the U.S. and the Soviet Union.

The EEC countries were planning to establish a common EEC market by the end of 1969, in which they would mutually abolish tariffs among the six countries and combine their respective markets. Their way of dealing with countries outside the EEC region was to establish an import-restriction policy involving high tariffs and import quotas.

The EEC's policy was to promote the growth of industries in its home countries by providing regional corporations with the privilege of unrestricted, tax-free distribution in a huge market. Countries outside the EEC region, however, would have to pay dramatically higher tariffs in exchange for import rights.

This meant that Honda motorcycles, after two months and considerable transportation expenditures, would be subject to an additional high tariff at customs in order to complete their voyage from Japan to the Port of Hamburg, the city in which European Honda was located. As a result, Honda would not break even unless the motorcycles were sold at a significantly higher prices than their European counterparts. To make matters worse, the EEC continued expanding its protectionist policy so that the gap in tariffs between Honda and the regional manufacturers of motorcycles continued to widen, causing Honda to become less competitive in the market.

Many countries, including Japan, did not really take the EEC's policy too seriously, believing it could not be easily organized or enforced since government policies and economic structures varied throughout the region. But they were eventually forced to change that view, and began scrambling for the means of coping with the situation.

Note:
*1 The three Benelux countries:Belgium,the Netherlands, and Luxembourg. The name is derived from the Benelux Customs League, a postwar charter established in January 1948.

The Challenging Spirit of Honda

A System that Fosters Expertise
  1. A System that Fosters ExpertiseA System that Fosters Expertise
  2. The R&D Center Goes Independent / 1960The R&D Center Goes Independent / 1960
  3. Employing the "My Record" Project and Expert Certification  / 1960Employing the "My Record" Project and Expert Certification / 1960
A Dream Come True: Car Builder for the World
  1. A Dream Come True: Car Builder for the WorldA Dream Come True: Car Builder for the World
  2. Launching the S360 and T360 / 1962Launching the S360 and T360 / 1962
  3. Entering the Auto Market at Last / 1966Entering the Auto Market at Last / 1966
  4. Introducing N360 / 1967Introducing N360 / 1967
  5. Launching the Honda 1300 / 1968Launching the Honda 1300 / 1968
  6. Introducing the CVCC / 1972Introducing the CVCC / 1972
  7. Announcing the Civic / 1972Announcing the Civic / 1972
  8. Introducing the Accord / 1976Introducing the Accord / 1976
Marketing Globally, Producing Lacally
  1. Marketing Globally, Producing LocallyMarketing Globally, Producing Locally
  2. Establishing American Honda Motor Co. / 1959Establishing American Honda Motor Co. / 1959
  3. Establishing Belgium Honda / 1963Establishing Belgium Honda / 1963
  4. Establishing Honda of America Manufacturing / 1980Establishing Honda of America Manufacturing / 1980
A Refreshing New Development
  1. A Refreshing New DevelopmentA Refreshing New Development
Products Emerging From Technology and Innovation
  1. Products Emerging From Technology and InnovationProducts Emerging From Technology and Innovation
  2. The Oval Piston Engine / 1979The Oval Piston Engine / 1979
  3. The Hondamatic Transmission / 1968The Hondamatic Transmission / 1968
  4. The Car Navigation System / 1981The Car Navigation System / 1981
  5. The Airbag System / 1987The Airbag System / 1987
  6. Four-Wheel Steering System (4WS) / 1987Four-Wheel Steering System (4WS) / 1987
  7. The VTEC Engine / 1989The VTEC Engine / 1989
  8. The ME Engine (G100 / 150 / 200 / 300 / 400 Series) / 1977The ME Engine (G100 / 150 / 200 / 300 / 400 Series) / 1977
  9. The ZE Engine (GX110 / 140 / 240 / 270 / 340 Series) / 1983The ZE Engine (GX110 / 140 / 240 / 270 / 340 Series) / 1983
  10. The Dream CB750 FOUR / 1969The Dream CB750 FOUR / 1969
  11. CG125 / 1975CG125 / 1975
  12. Road Pal / 1976Road Pal / 1976
  13. City / 1981City / 1981
  14. The NSX / 1990The NSX / 1990
  15. Odyssey / 1994Odyssey / 1994
  16. Honda EV Plus: The Dream of an Electric Vehicle / 1988Honda EV Plus: The Dream of an Electric Vehicle / 1988
  17. The E300 Portable Generator / 1965The E300 Portable Generator / 1965
  18. The HR21 Lawn Mower / 1978The HR21 Lawn Mower / 1978
  19. The F200 "Komame" Mini-Tiller / 1980The F200 "Komame" Mini-Tiller / 1980
Production Technology: The Essence of Creative Manufacturing
  1. Production Technology: The Essence of Creative ManufaturingProduction Technology: The Essence of Creative Manufaturing
  2. Establishment of Honda Engineering / 1974Establishment of Honda Engineering / 1974
  3. The World's Smallest Welding Line / 1982The World's Smallest Welding Line / 1982
  4. Transfer Lines for Modular Components / 1981Transfer Lines for Modular Components / 1981
  5. An Automated Line for Painting and Coating / 1988An Automated Line for Painting and Coating / 1988
A Neverending Passion for Racing
  1. A Neverending Passion for RacingA Neverending Passion for Racing
  2. Completion of Suzuka Circuit / 1962Completion of Suzuka Circuit / 1962
  3. Returning to the World Motorcycle Grand Prix / 1979Returning to the World Motorcycle Grand Prix / 1979
  4. Formula One Entry: The Initial Phase / 1964Formula One Entry: The Initial Phase / 1964
  5. Formula One Entry: The Second Phase / 1983Formula One Entry: The Second Phase / 1983
  6. Entry to Champ Car Racing / 1994Entry to Champ Car Racing / 1994
  7. The Birth of Twin Ring Motegi / 1997The Birth of Twin Ring Motegi / 1997
Creativity - The Way to Work Harder, Play Harder
  1. Creativity – The Way to Work Harder, Play Harder Creativity – The Way to Work Harder, Play Harder
  2. Holding All Honda Idea Contests / 1970Holding All Honda Idea Contests / 1970
People and Society Coexisting in Harmony with Nature
  1. People and Society Coexisting in Harmony with NaturePeople and Society Coexisting in Harmony with Nature
  2. Establishment of Honda Taiyo, Kibo-no-Sato Honda and Honda R&D Taiyo / 1992Establishment of Honda Taiyo, Kibo-no-Sato Honda and Honda R&D Taiyo / 1992
  3. Creating Hometown Forests / 1977Creating Hometown Forests / 1977
  4. Hosting "Orei-no-kai" / 1991Hosting "Orei-no-kai" / 1991

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