An Unknown Market - a New Challenge
Kawashima relocated to his L.A. post in June 1959. His first task was to look for an office property that could serve as American Honda's official business location. After shopping around, Kawashima decided to buy a former photo studio on West Pico Boulevard using some of his admittedly limited funds.
"I felt that we had to put down roots and establish our own building," recalled Kawashima. "So I thought, ‘Let's not rent for the time being. Why not just buy the building?' It might have seemed reckless, but I didn't feel that I was acting out of desperation. Actually, I was dreaming of a rosy future! Oh, I think the building must have cost about $100,000, but that left us with only $20,000 or $30,000 of our operating funds. Even the bank told me, ‘You've got a lot of guts.'"
The local reaction to American Honda's presence in the American motorcycle industry was decidedly down. "There is no way that Japan, having lost the war, could produce much of a product," opinion makers would say. "It won't be easy for them to bring something here and sell it." Absolutely no one predicted any sort of success for American Honda.
The American motorcycle industry was then selling 50,000 to 60,000 units annually. It was a market just one-tenth that of Japan's, yet several competitors were fighting it out for a share of the territory. Market expansion simply hadn't yet been considered since, in the U.S., the car was the generally accepted mode of transportation.
Motorcycles were vehicles for outdoorsmen, racing enthusiasts and hotrodders. Most of the motorcycles sold in the market were large, too, with engines displacing at least 500 cc. What's more, the motorcycle had an evil image heavily influenced by outlaws in black bomber jackets, commonly called "Hell's Angels" in reference to the biker society of the same name. Motorcycles had a bad reputation in the American community, and were not embraced by common consumers.
Likewise, the motorcycle industry was thought of as being dark and dirty. Most motorcycle dealerships were dark inside, with oil stains on the floors. This was not altogether inaccurate, since it was common to find oil pans on the sales floor, there to catch the fluid as it dripped from the bikes on display. The atmosphere could be far from inviting.