Some of the most trusted and widely recognized companies like Honda, Toyota and Ford don’t make the exception to these challenges. Therefore, these three companies will have to navigate through a number of difficult challenges, and figure out how to take advantage of a few surprising opportunities.In the case of Honda, they are ahead of the game by investing more in Research & Development (R) and restructuring their strategy. The newly appointed CEO Hachigo has already set up a strategy “Prioritize quality over quantity”. Hachigo spent years setting up the structure under his predecessor, Takanobu Ito, before taking over last June.
He said that the rapid expansion put too much strain on R resources in Japan and needed clearer lines of control. “We have come to see some issues in the front lines of our development and production facilities,” Hachigo said. “This could seriously harm the engine behind Honda’s creativity.”To steer the next phase, Hachigo replaced nearly a third of the board and promoted younger executives for new blood. He appointed new people to key roles in charge of R, North America and automotive operations. The changes clear the top ranks of some prominent, older-generation executives under Ito.Hachigo said electrification will play a big role in Honda’s new aura.
By 2030, he wants two-thirds of Honda’s global sales to come from green cars such as hybrids, plug-ins, fuel cell vehicles and pure electric vehicles. That’s up from just 5 percent today.”We need to realize renovation of Honda’s manufacturing,” Hachigo said. “Management, including myself, must lead in changing our mindset, and every associate needs to change their perception and the way they work.”Toyota is also following the footsteps of their Japanese counterpart by implementing new strategy and focusing more on R&D.
On their website it says “In the near future, cars are expected to connect with people and communities and take on new roles as part of the social infrastructure. New areas, such as AI, automated driving, robotics, and connected cars, are becoming especially important, and it is no longer enough to focus just on developing excellent cars and technologies or to carry on sales and service in the same old ways.To take on a new breed of initiatives, we therefore felt it crucial to form a new team, rather than use previous frameworks. Accordingly, in January 2016, we established Toyota Research Institute, Inc.
(TRI), and welcoming Dr. Gill Pratt as its CEO.”When it comes to the fifth biggest automobile manufacturer in the world, Ford are still struggling to come up with a clear strategy how they are going to compete in this new market.Ford Motor Company’s newly appointed CEO, Jim Hackett, delivered in a presentation his strategy for the future of the company which outlined five principles:• We will prepare for disruption by becoming fit.
• We will be in the vehicle business — moving both people and goods.• Our vehicles will be smart and connected.• These smart vehicles will thrive in a new transportation operating system.• We will evolve to capitalize on new business opportunities within this transportation operating system.His strategy was initially met with some skepticism due to the lack of specific details and a vague grand-scheme strategy for a rapidly evolving automotive industry.
In conclusion, Strategic planning is crucial for all the organizations in all the major industries. In the automotive industry, it is clear that not all the current competitors will survive but only those companies that plan strategies and implement them effectively will prosper. By bringing on board experts in cloud and connected services, big data, and digital content and investing and partnering with technology companies will help them establish a coherent connected product strategy and therefore design and build AVs.