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| Attending the news conference were, from left, Matt Matsuoka, Kiyoshi Ikemi, Kihachiro Kawashima, Governor James Rhodes, Masami Suzuki, Koichiro Yoshizawa, Shigeyoshi Yoshida, and Kazuo Nakagawa (Photo courtesy of Mr. Masami Suzuki) |
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Export of the Civic began to the U.S. and the rest of the world in1973, having debuted in Japan the previous year. That model was equipped with the CVCC engine, the first powerplant developed by an auto manufacturer that passed the strict emissions standards of the U.S. Clean Air Act. Accordingly, the Civic was a hit with the public, boasting great fuel efficiency and considerably cleaner exhaust than any car before it. In Japan, the car won the Car of the Year Award three straight years, beginning in 1973, while in the U.S., it ranked first in a fuel economy test conducted by the EPA (Environmental Protection Agency) in1974, winning praise around the world. There was indeed a great demand for the Civic as a small yet eminently practical car for the domestic and foreign markets, particularly with its arrival on the heels of the first oil crisis.
It was not easy to satisfy demand and, as a result, both the Suzuka and Saitama Factories had to manufacture Civics at full capacity every day. The Board of Directors even discussed the possibility of expanding Suzuka with a second automobile production line in order to provide for another surge in Civic sales. Yet, Kiyoshi Kawashima was not quite ready for such a thing.
“It’s true that the Civic is selling well,” he said. “However, it would be virtually impossible for Honda, given the current conditions, to immediately enhance its domestic sales strength to meet the increased production requirement. Moreover, we’d have to consider the cost that would accompany an expansion in the production line. But Honda’s auto business is finally bearing fruit, thanks to the Civic. And since it is a budding business, we shouldn’t assume we’re ready to charge into competition with the other Japanese manufacturers, either in terms of sales or capital. So, rather than compete domestically to no avail, I would like to use this opportunity to take a chance in America, the world’s largest market. I would like to build a motorcycle factory and eventually an automobile factory in the United States, where no [Japanese auto manufacturer] has yet done so.”
The proposed plan to add a second line for car production at Suzuka Factory was thus put on hold, at the insistence of Kiyoshi Kawashima. Instead, the company’s decision-makers began taking another look at a possible U.S. manufacturing base. “Recent study has concluded that a Honda factory in the U.S. would have a hard time making a profit through the manufacture of motorcycles alone,” Kiyoshi Kawashima said. “However, now that the Civic has begun to sell in America, I wonder if we might have a possibility there.”
It was at this time that Masami Suzuki, then the managing director, was instructed to conduct another feasibility study. However, concurrently, he was busy supervising the overseas manufacture of automobiles and unit sales of CVCC engines. Having licensed CVCC technologies, Suzuki had established a number of solid contacts among automakers in Japan and elsewhere.
“Let’s find out again what we can do in the States,” said Suzuki in November 1975. Immediately, he began organizing a study group with which to explore the concept of car production in America. |
