Question

In 3-4 paragraph please describe what weaknesses Honda Motor Company has within their company?

Answer 1

Weaknesses of Honda Motor Company has within their company are as follows:

In 2014 Honda has recalled some 14.4 million vehicles equipped with suspect airbag inflators made by Japanese supplier Takata Corp., more than any other automaker. This recent global callback of faulty airbags cost the company 49.6 billion yen ($414.6 million) of selling, general and administrative quality-related expenses according to its latest financial reports. Car recalls severely damages firms brand reputation and future sales. Honda Company has high cost structure, if it is compared with other automobile manufacturers.This automobile company has the upper middle segment and it limits the base of the customers.

Honda holds a very weak position in the Europe’s automotive market and has dipped to 1% market share in 2015. According to Q4 results of 2014, Europe swung to a regional operating loss of 5.7 billion yen ($47.6 million) in the January-March quarter, from an operating profit of 14.9 billion yen ($124.6 million) a year earlier.Although, Europe’s market share is declining at the moment and many companies experience losses, the market is huge and firms can benefit from the economies of scale. On the other hand low investments in research and development (R&D) leading to fall in production of innovative products.

Honda gave preference to international deposits rather than on the domestic deposit.Civic model of the vehicle is major weakness of the company.The products of the company are considered less offensive if its design and style is considered.Another thing is,Honda uses the latest technology in manufacturing Honda products and it is difficult for them to keep their prices low, which eventually failed to attract middle and low income group customers.