The president and CEO of Honda Motor India brings formidable credentials as the
Japanese automotive giant seeks to establish a strong footing in both its two-wheeler and car businesses in India. Team Autocar Professional reports.

Over the last 18 to 20 months, Honda Motor Company’s India arm has been on a roll. The company has taken some key decisions that effectively lay the ground for the ambitious plans which are aimed at achieving a strong leadership position in its automotive businesses in the country.

Among the first was the announcement and launch in April 2013 by Honda Cars India, now a wholly-owned subsidiary, of the Amaze, the company’s first-ever diesel model variant in India. It was a momentous launch given that since it began its India operations, the company had only petrol offerings, and in a market where prices of petrol were shooting through the roof, it was at a big disadvantage vis-à-vis the competition. With the Amaze, it was now confident that it could wrest market share from its rivals.

At hand to do the launch, and someone who pushed hard for the diesel strategy was Yoshiyuki Matsumoto, the managing officer, Honda Motor Company, and representative of development, purchasing and production in Asia and Oceania. He said, “The Amaze is our most strategic model in India and has been developed with strong focus on Indian requirements.”

If the Amaze’s debut was the beginning of a new chapter for Honda’s India innings, it was also the start of a new innings for Matsumoto himself. Following an organisational restructuring of the company’s six major business regions, the plan was to place senior executives in key markets to oversee critical functions such as manufacturing, purchasing and R&D. 

Matsumoto was anointed president and CEO of Honda Motor India on April 1, 2013. He also took charge that day as vice-president of Asian Honda Motor, indicating in a way that even as Honda in India is integrated with the company’s most important Asian base, Thailand, Matsumoto is eminently positioned to take the strategic decisions. Honda is putting plans in place to make India an export hub for the manufacture and supply of manual transmissions to global markets. Matsumoto is 56, which makes him four years younger than Carlos Ghosn, the chairman of Renault-Nissan.

The fact that he was chosen to lead Honda's charge in India is a tribute to his capabilities to  deliver the goods in one of Asia’s most challenging markets. Indeed, he brings formidable credentials to the job.

Matsumoto clearly has the faith of his boss. At the Tokyo Motor Show earlier this year, Takanobu Ito, the president, CEO and representative director, Honda Motor Company, reportedly said, “The Asian market is extremely important. That is why I am sending people like Yoshiyuki Matsumoto to India. The fact that we have assigned India to Matsumoto shows how serious we are about that market.” 

TOP HONOUR
How Honda implements its India game-plan and its Asian links will have Matsumoto’s imprint. We have, therefore, decided to honour him by naming him as our 'Man of the Year 2014'.

Matsumoto joins an illustrious group of people who have been given this honour by Autocar Professional which include Rajiv Bajaj, managing director, Bajaj Auto; Dr Pawan Goenka, executive director and head of Mahindra & Mahindra’s AFS; Siddhartha Lall, CEO of the Eicher Group, as well as V C Sehgal, chairman of the Samvardhana Motherson Group, among others.

In an e-mail response to Autocar Professional, Matsumoto said, “Honda Motor has set a challenging target for both businesses globally by March 2017. In Asia, India is a strategic and fast-growing market for Honda. When we compare April to November 2013, the growth of Honda in the four-wheeler business in the same period in 2014 accounts for 46 percent. This makes Honda Cars India the fastest growing automobile company in India. Looking at two-wheelers, Honda is today the second largest in the Indian two-wheeler industry after the beginning of operations 13 years ago. Gaining the trust of customers, Honda has acquired a 26 percent market share in two-wheeler markets.”

“As Representative of Automobile development, Purchasing and Production for Asia & Oceania, my current responsibility has been to streamline our important functions to provide products for our customers with speed and flexibility. This position was set in order to achieve its global business targets, with a focus on the special needs of each region. In the current business environment, the customer wants the best technologies and features at affordable prices. Global companies, including Honda, need to be quick and agile to develop products that meet and exceed customer expectations. We are working with this approach in mind,” he added.

Matsumoto joined Honda Motor Company in 1981. Since then, he has since worked across various departments of R&D and production operations. In April 2006, he took charge of Honda Motor Co’s automobile products and operations and was promoted to Operating Officer in June 2006. He became general manager of the Suzuka factory in Japan in April 2009 and two years later, the executive in-charge of automobile operations for sub-compact models. Next year he was catapulted to managing officer, Honda Motor Company.

Early in his career, Matsumoto proved his mettle as the chief engineer for the Honda Fit.
The car was launched in Japan in 2001 and went on to bag the Car of the Year award. According to The Wall Street Journal, Matsumoto is described as a fast-talking 44-year-old engineer with a passion for Kendo, Japan’s ancient fencing sport. He assembled a team of designers and engineers to develop a small car that Honda could sell in Japan, Europe and elsewhere. It was launched in India as the Jazz in 2009.

According to WSJ, that team traveled to Germany, Italy and France to study some of the world’s most sophisticated small-car drivers. There apparently he visited parking lots, clicking pictures of people in Renaults, Fiats and other compact cars. One of the photos depicts an elderly couple struggling to put their bicycle in the back of a small car. Matsumoto has been quoted as saying that such scenes convinced him Honda could sell more tiny cars if those cars offered more space, like SUVs. That influenced his subsequent design of the Fit.

Under his watch, Honda in India has made some of its most significant announcements. At the New Delhi Auto Expo 2014, Honda displayed the Mobilio, its first MPV for India, and launched the all-new City, now available in diesel as well.

In February 2014, Honda Cars India announced the inauguration of its Tapukara car manufacturing plant in Rajasthan. More importantly, Honda Motorcycle & Scooter India announced plans for a fourth plant in India, a scooters-only plant, termed as the world’s largest and in October conducted the ground-breaking ceremony. The company has ramped up at its third two-wheeler plant at Narsapura, Karnataka, and with Tapukara has kicked off what will develop as a hub for the export of Honda diesel and petrol components to the Japanese manufacturer’s other Asian operations. This rapid progression of developments clearly indicates the company’s ambitious plans.

Matsumoto, who shuttles between Japan, Thailand and India, is gradually soaking in the India experience. According to colleagues, Matsumoto is clear about what he wants done and won't not rub it in. Being on the move across Asia and Oceania, he prefers his food Japanese-style. The Honda India factory canteen does cater to the Japanese palette. In addition, he savours spaghetti or pasta.

Prior to his arrival in India, Matsumoto had visited the country many times and had developed a liking to India "due to the warmth this country and the people here had to offer."

Honda has set itself a global target of six million cars annually by the fiscal year ending 2017 with three million coming from emerging markets including Asia-Oceania. Honda Cars India will contribute 25 percent of the region's sales by 2017, selling 300,000 units per annum. 

Honda’s cumulative investments for its auto companies in India now stands at Rs 11,600 crore over 16 years. Its combined investment in the Rajasthan area is now over Rs 6,000 crore.

What will Matsumoto’s priorities be? Clearly one would be to boost the company’s localisation plan. In interviews that he has given, he has expressed faith in India suppliers. At the Tokyo Motor Show, he gave some indication of what he’d be looking at when he said that “we want to bring down costs through research”. That process is underway as we see how Honda is making Tapukara a lynchpin of its Asian operations. He also alluded to the fact that he could be tasked with developing its next generation of cars based on platforms in India. That is where localisation plays a key role, and doubtless, he is seized of the matter. He also sees as India playing a key role in exporting cars to Africa, which is Honda's next frontier.

It’s over a year since Matsumoto took charge and he can take pride in the fact that Honda Motorcycle & Scooter India (HMSI) has a commanding 54 percent of the market.

In the car sector, with a diesel offering under its belt, the company’s plans are ambitious. It has a seven percent share of the market for the April-November 2014 period and has been able to speed ahead of Toyota Kirloskar and home-grown player, Tata Motors. At about 15 years, Honda's car business is much younger than its two-wheeler business and clearly has tremendous potential going forward.

Honda Motor Company has an interesting Indian heritage. It entered India in 1984 as a 50:50 joint venture with the Hero Group to make motorcycles. For Honda, Hero’s bicycle and mopeds business was a good attraction and both companies began talks in 1983 and entered into a joint venture in 1984. Two JVs were signed, one for bikes, and the other for scooters with Kinetic.

This was all before India’s 1991 reform process that saw India open its insulated economy to private and foreign capital. However, some loosening of the licence raj has already been initiated the government in the 1980s. At about this time, Suzuki entered India’s passenger car market in a joint venture with the government to make passenger cars.

 Honda sold its stake in the two-wheeler business in 1997 and started its own wholly-owned arm.

The joint venture with the Hero Group produced some of the most enduring names in the Indian two-wheeler market that included the CD100 and later the Splendor. The JV pact for bikes was for a period of 10 years and got periodically extended. As per the deal, Honda agreed to provide the technical know-how, set up manufacturing facilities, and carry out research and development activities. Hero Honda would pay royalties. The alliance with Hero Honda ended in December 2010.

Today is a very different world from the one that Honda entered in the late 1980-90s. India’s two-wheeler market has eight manufacturers producing basic bikes as well as high-end luxury products such as those of Royal Enfield.

Given India’s demographic bulge, there is a huge potential market for Honda which is very clear it wants to dominate. HMSI has moved up a few notches in the pecking order displacing rivals with its new  commuter bikes. And with the Activa scooter range, HMSI has established itself as the most formidable Honda product in the country.

With the all-new Jazz set to debut in 2015, it will be a home-coming of sorts for Matsumoto who designed the Fit at the beginning of this century, when he may not have imagined that he’d oversee its introduction in India.