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Eiji Okawara: We must be responsible to our customers

Guangzhou – Honda is currently the largest Japanese carmaker in China. With only four models (Accord, Fit, City and Odyssey) in production, the carmaker ranked in the Top Five position with sales of nearly 260,000 units last year. Each model has been one of the most popular models in its respective segment in China’s passenger vehicle market.


CBU/CAR reporter was invited by Guangzhou-Honda on April 20 during Auto Shanghai for an exclusive interview with the company’s new president Eiji Okawara.

Okawara, who replaces the company’s former president Sho Minekawa, started his new tenure on April 1 in Guangzhou. Okawara shared his views and comments with us on the carmaker’s management, operations, and strategy, as well as China’s automotive industry. Editor


CBU/CAR: As the new president of Guangzhou-Honda, would you please briefly introduce your previous work experience to our readers?


Eiji Okawara: I was engaged in R&D assignments for a long time with Honda, and then my work shifted to mostly quality and production-related management.


I’ve been to Guangzhou before, it’s an impressive city, but the air quality is not always the best. In a manufacturing enterprise, we are inspired to carry out some more work on environmental protection.


I have been working with Guangzhou-Honda for three weeks. I feel the staffs here are very passionate and enterprising. I visited several dealers, but China is a very large country, so I only managed to visit 24. I talked to customers at the dealers and got to know their thoughts.


CBU/CAR: Before your tenure in Guangzhou, you had been working at Honda’s Japanese headquarters?


Eiji Okawara: Yes.


CBU/CAR: Tell me something about your plan for the new management team.

Eiji Okawara: This personnel change is a very normal process for the company. The new team is young and full of energy. Our principle is to focus on customers’ and employees’ feelings. Our target is to provide products and services beyond customers’ expectations. We expect to continue to expand Guangzhou-Honda’s scale of production, reaching an annual output capacity of a million units quite soon. We hope Guangzhou-Honda can represent the development level of China’s automotive sector.


CBU/CAR: What do you think of Guangzhou-Honda’s development in China?

Eiji Okawara: China’s automotive industry is developing very rapidly. Guangzhou-Honda has been developing very smoothly. It is in its second business development period. It’s very fortunate that the company’s total sales have now surpassed a million units.


CBU/CAR: What is the most crucial problem that you have to face at Guangzhou-Honda?


Eiji Okawara: I don’t know very much about the company since I’ve only been here for a very short time. As far as I’ve seen, we should fully inspire our employees to utilize their talents and potential to add value to their jobs. We need to create more incentives to stimulate ideas and enthusiasm, especially in our HR-related systems.

If we are determined to be engaged in China’s automotive market, we still have long way to go.


CBU/CAR: As you just mentioned about Honda’s engagement in China. As far as I know, Guangzhou-Honda will not introduce any new models this year. The company has set its output and sales target at 310,000 units, up about 20 percent year-on-year. Where does this confidence come from?


Eiji Okawara: Our employees’ initiative and passion for work has made us very confident to successfully complete this annual target. Through specialized training we can make some effort on R&D, production, sales, and aftersales areas. We’ll have new models for the Chinese market in the future. Guangzhou-Honda’s good performance relies on the work of enthusiastic employees.


CBU/CAR: When will the new models hit the Chinese market? In one or two years?

Eiji Okawara: It’s hard to tell. We’ll announce it at the right time.

CBU/CAR: Does Guangzhou-Honda have any plan to introduce hybrid vehicles in China?


Eiji Okawara: It’s possible to introduce hybrid technology in China. Hybrid systems suit small cars. Larger cars tend to use clean diesel power. Honda has already mastered these technologies. First we need to see the market demand. There are problems with things like the quality of gasoline and diesel fuel in China, which still does not suit more modern engine technologies.


It also means a higher cost for the vehicle. Because we don’t yet know whether customers would accept cars that are more expensive than other cars in the same segment. It’s useless to introduce a very good model if customers cannot accept the price.


CBU/CAR: Guangzhou-Honda recalled 500,000 cars a few days ago, which set a record for a vehicle recall in China. Will this affect the brand image of Guangzhou-Honda? What influence did it have on the company?


Eiji Okawara: We are very sorry about the recall, which caused trouble for our users. Being responsible to our customers is the most important thing for us. Our dealers understand and support the recall. By April 15th, just a month since we issued the recall, we had recalled half the vehicles. This rate has never been seen before in other countries. We will strictly control the quality of the recall. If a similar situation occurs again, we’ll definitely be responsible to our users. This is what Guangzhou-Honda can promise. “The Customer is God” is used very often in business, but we say this with our full sincerity.


On the subject of negative impact, I believe it’s just a short-term phenomenon. Recalls are a very common occurrence overseas, and the numbers are usually large.

CBU/CAR: Online news sources have revealed that Guangzhou-Honda cut its prices recently. Is this an official action?


Eiji Okawara: No, it’s not. The dealers shouldn’t make the discount.


CBU/CAR: The market is becoming fiercely competitive. Many major OEMs have cut their prices recently. But Guangzhou-Honda hasn’t announced any price cuts in recent years. Why is that?


Eiji Okawara: As output volume steadily increases, our saved costs will be kicked back to our customers. It all depends on whether our customers need us to cut prices. If the market decides we need to reduce the price, we’ll use various methods to achieve the goal of cutting the price. We hope we can consistently enhance our product performance and add equipment on the basis of maintaining the original price so that we can raise the model’s level. We have made lots of improvements and added a lot of new equipment every year to our models, such as the Accord. We pass on discounts to our customers in this way rather than simply slashing prices. To be responsible to our customers, we must continuously improve the value of our products. 


CBU/CAR: The Accord was the best seller in the medium to luxury segment last year. The same level car, such as the Camry, made by Guangzhou-Toyota, is now experiencing very strong demand since it was launched in China last year. How do you meet the challenge from competitors like this in China?


Eiji Okawara: The Camry is a brand-new car and has a fresh feeling for Chinese customers. Customers will naturally pay attention to this new model. But the Camry and the Accord have their own characteristics. For customers, they provide different value. For safety, environmental protection, and energy saving, they are both excellent. But they are different from each other. In my opinion, Accord is better in driving and handling. The Camry is good in other aspects. Every product has its own market and target users. Each product has its respective values. We will consider our customers’ needs with the next-generation Accord.


CBU/CAR: What are Guangzhou-Honda’s product advantages?


Eiji Okawara: Guangzhou-Honda’s products have many advantages. For instance, the Accord has a large passenger cabin, it is safe, environmental-friendly, energy-saving’ and reliable. The interior trim can also meet customers, demand: it also uses advanced technology.


In the meantime, service is also very important. Chinese customers usually focus on product, but service is also significant to customers.


CBU/CAR: Chinese government has issued a strong call for Chinese independently developed models and brands. Can you tell us more about Guangzhou-Honda’s plans for such a local model?


Eiji Okawara: It’s a question of R&D. Guangzhou-Honda is capable of developing a brand-new model. The new brand is completely finished by Guangzhou-Honda. It’ll hit the Chinese market at the appropriate time. As to when and which types of models need to be put into production, we still need to do more research.


CBU/CAR: Guangzhou-Honda is a JV brand. How do you view the new brand?

Eiji Okawara: It’s independently developed by Guangzhou-Honda, so I think it is a Chinese brand.


CBU/CAR: Is it specially for Chinese consumers?


Eiji Okawara: Yes.


CBU/CAR: Will you export them to other countries?


Eiji Okawara: It’s possible to export if there is demand from other countries. But the Chinese market is the major market.

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