Chapter Three
Types and Patterns of Innovation
Honda and Hybrid Electric Vehicles1
Honda was founded in Hamamatsu, Japan, by Soichiro Honda in 1946 as the Honda Technical Research Institute. The company began as a developer of engines for bicycles, but by 1949 it had produced its first motorcycle, called the Dream. In 1959, Honda entered the U.S. automobile and motorcycle market by opening the American Honda Motor Company. A few years later, in 1963, Honda released its first sports car, the S500, in Japan. Honda Motor Co. Inc. grew rapidly to become one of the largest automobile companies in the world. Its ”glocalization” strategy of building factories around the world that would meet the needs of local customers had resulted in a total worldwide presence of more than 100 factories in 33 countries. Furthermore, while other auto manufacturers engaged in a frenzy of merger and acquisition activities in the late 1990s, Honda steadfastly maintained its independence. Honda has grown into one of the world’s largest automobile manufacturers and has also evolved into one of the most respected global brands. In 1997, Honda Motor Company introduced a two-door gas/electric hybrid vehicle called the Insight to Japan. The Insight’s fuel efficiency was rated at 61 miles per gallon in the city, and 68 miles per gallon on the highway, and its battery did not need to be plugged in to an electrical outlet for recharging. By 1999, Honda was selling the Insight in the United States, and winning accolades from environmental groups. In 2000 the Sierra Club gave Honda its Award for Excellence in Environmental Engineering, and in 2002 the Environmental Protection Agency rated the Insight the most fuel-efficient vehicle sold in the United States for the 2003 model year. By August 2005, Honda had sold its 100,000th hybrid to retail customers.2
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38 Part One Industry Dynamics of Technological Innovation
Developing environmentally friendly automobiles was not a new strategy...