A picture of American Honda's first headquarters on Pico Boulevard in Los Angeles in 1959. Honda is 50 years old today, and much of its early success is the result of a series of brave, bold decisions acted upon by smart engineers-turned-executives.
That and dumb luck. But we'll get to the dumb luck later. First, the boldness.
Bold decisions are one thing, but that alone would not guarantee success, especially since any of Honda’s decisions could easily have backfired. The difference was that almost all of the major decisions made early on were both bold and correct.
Consider the company’s move to the United States 50 years ago. The parent company was only 11 years old, founded amidst the rubble of postwar Japan. By the time Honda came here, it had produced only six products, all of them motorcycles, scooters or simply engines mounted on bicycles. The world wouldn’t see the first Honda car until the S360 in 1962.
The timing of the move to the United States was hot on the heels of Toyota’s disastrous flop here. Mighty Toyota had just failed to sell any of its wheezing Toyopets and had withdrawn from the States to regroup and think up the Corolla. Still, tiny Honda came to America, despite studies that its people conducted suggesting Southeast Asia would be a better first step as an export market.
So, in June 1959, the company founded American Honda Motor Co. Inc. in a storefront building on Pico Boulevard in Los Angeles with three employees: former sales manager-turned-president Kihachiro Kawashima and assistants Takayuki Kobayashi and Shozo Yamagishi. They shared an $80-a-month apartment in L.A. with one bed--two of them slept on the floor. (Imagine Jim Press and Bob Nardelli fighting for the covers in Auburn Hills, Mich.) In addition to the storefront, they all worked in a rented warehouse stacking crated motorcycles three high and wandering the West recruiting dealers.
Their first selling season was a bust. They offered the 250-cc and 350-cc Dream and the 125-cc Benly motorcycles--all of which, when driven long distances at high speeds as we do here in the States, blew their head gaskets and fried their clutches. Rather than stonewall or say “they all do that,” Kawashima shipped the blown bikes back to Japan to find a fix. A better head gasket and a stronger clutch spring were the cures, and a reputation for customer care was established right off the bat.
But in the interim, riding around L.A. on their little 50-cc, four-stroke Supercubs, the three new execs discovered something else. While their bigger bikes were easily outperformed by British, German and American motorcycles of the day, everyone loved the little Supercub.
So they brought in Supercubs. Thousands of them. By the end of 1963, less than four years after opening the doors on Pico, they had sold more than 100,000 of them. By 1968, Honda had sold a million motorcycles here and the following year the iconic CB750 Four--with its transverse-mounted four-cylinder, overhead cam and disc brake in the front--became the first true mass-produced, affordable superbike.
While its bike sales soared, Honda was struggling with cars. The little S360 and S500 sports cars were too small and underpowered for us. So was the N600, but Honda rolled it out anyway, in 1970, first in Hawaii and then across the mainland. It was an oddity and it met with customer indifference.
The Pico Boulevard building today serves as the office of an acupuncturist. |
Those lean times would change real soon. Almost completely by accident, the N600’s successor was the perfect car at just the right time. This is the dumb-luck part. The 1973 Honda Civic arrived here with the ultra-clean, high-mileage CVCC engine just as the OPEC oil embargos of 1973 and 1974 hit. American cars at the time were huge, heavy and wildly inefficient by comparison. The Compound Vortex Controlled Combustion engine, with its precombustion chamber and quicker, more completely burning fuel mixture, returned great gas mileage. It met 1975 clean-air standards in 1972. Customers clamored for it. When the larger Accord debuted here in 1976, Honda’s reputation for practical, economical and reasonably priced cars was cemented.
Sales for 1974 were 42,000; in ’75 it was 102,000. In ’76, with the Accord on board, U.S. sales hit 150,000. They were the right cars for the right times.
Building plants in the United States was the next bold move. Volkswagen had tried it and failed. Hyundai’s first plant, built in Canada years later, would similarly fail. No other foreign carmaker had even tried. But it would mean increased efficiency and would protect Honda from currency fluctuations and import quotas. Plants in Marysville, Ohio, built motorcycles starting in 1979 and Accords in 1982. Weed whackers and lawn mowers began to pour out of a North Carolina plant by 1984, followed by engines in Anna, Ohio.
Honda was the first Japanese carmaker to start a luxury brand when it launched Acura in 1986.
As the years went on, the cars got increasingly fun to drive. Variable valve timing and lift electronic control--VTEC--combined with independent double-wishbone suspension at all four corners endeared the Civic hatchback to enthusiasts everywhere. When Honda dropped the double wishbones and went to MacPherson struts, it was the beginning of the end of the import scene, which--completely unbeknownst to corporate Honda--it had ruled.
Honda’s dominance of open-wheel racing in the States got a rocky start when Bobby Rahal and Mike Groff failed to qualify at Indy during Honda’s first full year in 1994. But it didn’t take long before Honda won six CART championships and IRL titles too numerous to count (since Honda is sole engine supplier, it wins everything every year).
There’ve been some hiccups: Honda was woefully late to the SUV party that started in the early ’90s, rebadging the considerably tinny Isuzu Trooper and Rodeo as the Acura SLX and the Honda Passport.
And Honda still refuses to offer a V8 in its luxury flagship RL, steadfastly topping out at six cylinders despite what the rest of the segment is offering.
Regardless, Honda retains some of the most loyal buyers in America, selling 1.5 million vehicles last year, fifth in the States behind Chrysler, Ford, GM and Toyota. It has come quite a ways from the little storefront on Pico Boulevard.
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