HONDA STANDARDIZE PARTS IN ASIA
February 8 2008.

Honda will start using uniform specifications for engines, frames and other motorcycle parts made in Southeast Asia and other emerging markets.

Through this move, the world's top motorcycle maker seeks to reduce parts development costs and spur price competition among suppliers, thereby slashing overall expenses by more than 10% to vie with rising exports from Chinese rivals.

Parts for the 100cc-level motorbikes will be consolidated first, with the new engine to boast about 10% better fuel economy than current models. Motorcycles featuring the standardized parts are slated to debut in Thailand this May. They will also be released in Vietnam and Indonesia around 2009.

The standardized parts will be designed by Honda, which will then order them from suppliers. By adopting a uniform standard for the millions of motorcycles it sells in Southeast Asia, Honda will no longer need to design and develop parts for each market, helping to drastically slash costs. It will also be easier to compare manufacturing costs at parts suppliers, leading to more competitive prices and higher quality.


Source: The Nikkei