The Concept: An OHV + Inclined Cylinder that Changed the World of General Purpose Engines
Honda's ME engines proved popular throughout Southeast Asia, particularly in Thailand, where the demand was so strong that some retailers stopped displaying the engine because it would easily sell right out of the box. In fact, other manufacturers began finishing their products in red and white, because so many customers had specified "that red-and-white engine." However, it was not all roses for Honda. Out in the OEM market there were harsher realities to face.
The chassis-only tillers displayed at a retailer in Thailand. They are sold after being fitted with a separate, general purpose engine. Engines lacking installation compatibility are shut out of the retail sales channel.
The ME engine, developed through a series of efforts intended to reduce its cost by half, was as much as 2,000 yen cheaper than other manufacturers' engines of the same class. The ME engine was also 10 percent cheaper than its rivals in the OEM market, where the price would vary according to the number of units ordered. Therefore, cost was the key selling point for general purpose engines, and everyone knew Honda, with its lower price point, had the advantage. As it turned out, though, a low price didn't benefit the company to the expected degree.
Yamaguchi himself also visited OEM companies in Japan, where he promoted the ME engine. However, he was on the receiving end of critical comments:
"Although the engine itself costs less," they would say, "it costs extra to install and test it in our machine. It also requires a lot of difficult, cumbersome work. We don't think we want your engine."
Others would say things like, "It's a great-looking product, but we cannot adopt it unless your products are designed to fit our machines with the absolute assurance there won't be any problems. That's what the other suppliers do."
Yamaguchi gave demonstrations amply proving the engine's performance, sometimes out in the snow and bitter cold. However, following a series of disappointments his once-abundant optimism had been left shattered in pieces. One comment he received from a manufacturer of construction machinery was a particularly heavy blow:
"Mr. Yamaguchi, it's true that a savings of 2,000 yen would add to our company's profits. However this saving wouldn't be passed on to the completed machines as a significant price advantage in the market. In other words, there would be no benefit for the customer who used the product to choose one with the Honda engine."
Those words had come as a shock to Yamaguchi. After all, he and his colleagues had studied regional markets with their own eyes, observing engine uses and identifying problems. He was confident they had created a price-competitive engine that met all the requirements.
"Our goal is to create an engine that satisfies the customers who use it," Yamaguchi would say. "I want to hear them say, 'It has to be Honda' the next time they purchase an engine. This feeling is shared by all the engineers at Honda."
This man, though, was saying their effort was not being appreciated by the consuming public. Moreover, price had nothing to do with it. As Yamaguchi said, "It was a tremendous shock to me as an engineer."
The ME engine was undoubtedly a success, though, and because of that Honda was able to compete with other manufacturers who were active in the same arena. Although their comments were rather harsh, those OEM companies would not have even looked at Honda engines if it had not been for the ME model. Still, Honda needed a decisive edge in order to lead the competition and make the customer say, "It has to be Honda."
One comment stood out in Yamaguchi's mind: "Don't depend on (price) difference alone, but make use of the product's uniqueness." This painful experience ultimately became the foundation for development of the ZE engine.
The Honda ZE engine series, featuring OHV+inclined cylinders