Paving the Way for Auto Production
Honda had been forced by the expected passage of the MITI bill to expedite its entry into auto manufacturing. Although the company had all the needed merchandising technology and expertise in quality control, certain basic requirements had gone unanswered, among which were the essential production technology and facilities for mass production of cars.
Honda’s facilities at the time were designed for motorcycle production, just a small portion of which could be used in the making of cars. Honda contacted its existing parts suppliers for help, along with several new suppliers, all the while investigating ways to utilize the existing infrastructure. Further, the layout of each plant was reviewed in order to secure the space needed for auto production.
Accordingly, it was decided that Saitama Factory (now Wako Plant) could produce engines for the T360 and S500, along with final assembly of the T360. Final assembly of the S500 would be handled by Hamamatsu Factory. The bodies for both models were built at Suzuka Factory for shipment to Saitama and Hamamatsu, while the differentials and transmissions were to be made at Saitama Factory and Hamamatsu Factory, respectively.
The Honda Company Newsletter (Vol. 93) of August 1963 featured an article in which Mr. Honda discussed his ideas regarding the construction of a dedicated auto production plant:
"They say Japan’s economy is stable today, but it’s still heavily influenced by the U.S. Now, Japan has its own automobiles, which is quite an achievement for a "semi-independent" economy such as ours. However, it would be very risky to rush into building a plant.
"We are now manufacturing sports cars in Hamamatsu and trucks in Saitama. However, we are asking our Suzuka Factory and manufacturing machinery factory, not to mention Hamamatsu and Saitama factories, to do their utmost to improve the quality of motorcycles, which are generating profits for us even now. We also want them to utilize their idle machinery, standardize parts and press-dies as much as possible, and do everything they can to utilize the existing facility [for car production]. We should consider building a [dedicated automobile] plant only when we are 100 percent sure that the construction of such a plant will bring us satisfactory results.
"We have become one of the world’s leading makers of motorcycles, and that should remain our foundation. We have to spend some time gathering various ideas that will improve our automobiles, just as we did when developing the Cub. And that’s what I want: an automotive version of the Cub."
The company’s widely dispersed system of production, however, involved every factory and was thus lacking in the efficiency Mr. Honda wanted. It did have certain advantages, however, since all factories were able to acquire some experience in car production. Those involved in production at the factories obtained invaluable insight by applying themselves to develop necessary solutions on a day-to-day basis. This experience at the beginning of Honda’s expansion phase was particularly useful in building Sayama Factory (now Saitama Factory’s Sayama Plant), and ultimately facilitated the launch of auto production at Suzuka.