Company history

Honda began in October 1946, when Honda Soichiro opened the Honda Technical Research Institute as a one-man venture in Hamamatsu, Shizuoka, and started building clip-on auxiliary engines for bicycles out of surplus generators once used to power army radios. Postwar Japan’s hunger for cheap mobility carried the motorized bicycles across the country, and in September 1948 the business was incorporated as Honda Motor Co., Ltd. In 1949 Fujisawa Takeo joined as its business brain, and the pairing that would define the company took shape — “Soichiro the engineer, Fujisawa the manager” — with technology in one man’s hands and finance and sales in the other’s.

The decision that set Honda apart came in 1952. Convinced by a tour of America and Europe that his production methods lagged, Honda imported the latest American machine tools in bulk, spending $1.3M (¥450m) against a capital base of only $166,667 (¥60m) — a bet the industry called reckless. It built a scale of mass production no other small motorcycle maker could touch, and it paid off: the Super Cub, launched in 1958, went on to pass 100 million units over the following sixty years, and Honda’s clean sweep of the 1961 Isle of Man TT announced its engineering to the world.

In 1963 Honda pushed into four-wheelers with the T360 light truck and the S500 sports car, defying the government’s plan to consolidate the industry under a special-measures law and choosing instead the road of an independent maker. Then in 1972 it did in cars what it had done in motorcycles: the CVCC engine became the first in the world to clear the emissions limits of America’s Muskie Act without a catalytic converter, and the Civic that carried it answered the US market’s demand for both clean exhaust and fuel economy. Solving the hardest problem in-house, rather than licensing a way around it, became the pride Honda would carry for decades.

In October 1973, at the height of Honda’s rise, Soichiro and Fujisawa stepped down from the front line together and handed the presidency to Kawashima Kiyoshi — a deliberate break from founder-led personal rule toward organizational management, and a rejection of hereditary succession backed by concrete mechanisms rather than sentiment. The Civic, meanwhile, turned the 1973 oil crisis to Honda’s advantage: while the industry’s sales fell by a third to a half, Honda’s rose, vaulting it past Toyo Kogyo and Mitsubishi to third place among Japanese carmakers.

The defining move of these years was to build cars where it sold them. As trade friction with the United States reached a practical limit — Japanese models were sweeping the US import charts — Honda became the first Japanese carmaker to build four-wheelers on American soil, announcing a plant at Marysville, Ohio, and starting production there in November 1982. The Accord built at Marysville became, in 1989, the best-selling passenger car in the United States, a first for a Japanese model, and Honda’s move pulled Toyota, Nissan and the rest into local North American production behind it.

Through the 1980s Honda expanded motorcycles, cars and general-purpose engines across the world at once, and in 1986 it launched the Acura luxury brand in North America. A one-time Hamamatsu workshop had, in forty years, become one of America’s leading carmakers — fourth behind GM, Ford and Chrysler.

In the late 1990s, as carmakers worldwide merged and allied under the banner of scale, Honda chose the opposite. In 1995 it brushed aside talk of a tie-up with Mitsubishi and, under Kawamoto Nobuhiko’s reforms, bet its survival on product strength and manufacturing discipline rather than size — concentration on recreational vehicles, quality-and-cost gains through TQM, and cars that sell. Independence, for Honda, was a system, not a slogan.

By the 2000s Honda had production in all three of the world’s great auto markets, adding local Chinese output from 1998 and reaching record profits — parent net income of about ¥460 billion in the year to March 2004, driven by North America. Carrying at once the banners of one of the world’s largest motorcycle makers, a leading carmaker and one of the largest makers of general-purpose engines, its self-reliance had hardened into an identifiable trait.

But the peak stored up strains. The 2008 Lehman shock cut operating profit by roughly four-fifths in the year to March 2009. Europe, centred on the Swindon plant, could not climb out of chronic losses; in China two joint ventures lost relative ground to local makers; and the early 2010s brought the Thai floods and the Great East Japan Earthquake. Two-wheelers leaned on Southeast Asia, cars on North America, engines on the US economy — three regional imbalances the decade laid bare, and the self-reliance built since CVCC began to weigh as much as it helped.

The 2010s reversed the logic of expansion into one of subtraction. In 2017 Honda announced the closure of its Sayama plant in Saitama — its first four-wheel site, running since 1964 — consolidating domestic output at Yorii. In 2018 it decided to shut the Swindon plant in Britain and withdraw entirely from building finished cars in Europe by 2021, ending a thirty-six-year presence that had never stood on its own sales. A generous early-retirement offer, the Life Shift Program, drew more than twice the applicants expected.

In April 2021 Mibe Toshihiro became president and set a deadline on the engine itself: 100% EV and FCV in Honda’s global vehicle sales by 2040. He framed electrification as Honda’s second founding, said past successes would only get in the way, and tied the plant closures and a Sony joint venture, Sony Honda Mobility, into a single line pointing at that pledge. It was less a nimble bet from a position of strength than a decision to cut off any line of retreat.

Then the pledge met a slower market. In December 2024 Honda, Nissan and Mitsubishi opened talks on a merger that would have formed a Japanese group selling more than eight million vehicles a year, with Honda leading — one of the largest realignments in the postwar industry. By February 2025 the talks had collapsed, a rare public breakdown, and the independent maker that had set out to lead consolidation found that path broken too. Mibe later faulted his own single-scenario EV strategy, and Honda turned to going it alone again — a share buyback of $7.3B (¥1.1tn) and a region-by-region rethink — with the very shape of its postwar independence now in question.