In the Japanese scheme of things the company of Sochiro Honda (1906-1991) is a Johnny-come-lately upstart which is not on par with the venerable old companies which had their origins in the Meiji Era of Japan. Soichiro Honda has been an unrepentant maverick in the Japanese business world. He built his company from scratch after the end of World War II. At that time he began building motorbikes by installing small engines on bicycles. Since there was a tremendous need for transportation at that time he was able to quickly. For a period of time he built engines for motorbikes. When his major customer could not purchase all of the engines that Honda produced he started manufacturing motorbikes himself. He graduated to building motorcycles. After establishing a name in the motorcycle market, particularly in the U.S., he then took his company into the automobile industry. Soichiro Honda had always been a car buff. Before World War II he tried to get into the automobile industry by producing piston rings. His piston rings were not a great success and World War II brought an end to that business.

Honda found it relatively hard to break into the domestic car market in Japan so he focused upon the export market. Thus the Honda automobiles have a better reputation abroad than in Japan. Honda derives a substantially larger share of its sales abroad than do the other Japanese auto companies such as Toyota.

The Honda company has not developed the normal keiretsu form, but because of its size as the number three automobile company in Japan and the number one motorcycle company in the world it has extensive operations and qualifies as a vertical keiretsu. Honda does have the standard components in finance, trading and transportation. For financing however Honda has also depended upon the financial institutions (banks and insurance companies) of the Mitsubishi Group, but Honda is not a member of the Mitsubishi Group even though there have been representatives of Mitsubishi financial members on it board of directors.

(To be continued.)