"Honda motor is Japan's third largest car and motorbike outfit."
"Honda is not going to sell you this car"
"And it could be dangerous"
For many people in Japan, it was an ordinary day on November 17, 1906. However,
it was also the birth of Soichiro Honda, who would go on to change the world in more ways than one.
Honda’s father was a blacksmith who had a bicycle repair shop, whilst his mother
worked as a weaver. Their family was very poor, and of Honda’s eight siblings, five of them
died during childhood due to poor health. However as Honda grew up, he became very
interested in tools and machines, and was especially keen on learning how vehicles
worked after he saw his first car, a Ford Model T, when he was just a toddler. He chased after it,
mesmerized by its design. That memory and the smell of the oil would stay with him forever.
Now, around this time bicycles were becoming very popular all over Japan, and customers began
to line up in front of his father’s repair shop. Honda spent a lot of time watching his dad work,
and then practicing repairs himself. Honda even learned how to make his own toys from
whatever materials he saw lying around. Within a few years Honda was regularly
helping his dad out in his repair shop. However, when it came to academic learning,
Honda did terribly in school - he just wasn’t interested in what they were teaching, and longed
to be back in his father’s workshop instead. Since he lacked interest in school, his grades
suffered. The class were given reports with their grades on which they were meant to take to their
parents, who would then stamp a family seal on the report card to show they had seen it.
However Honda didn’t want his parents to see he was failing and disappoint them, so decided to
create a family seal using a scrap rubber bicycle pedal cover, so that his teacher would think his
parents had stamped it. And it worked. In fact, it worked so well that other kids in his class
who were afraid of showing their low grades to their parents, came to him asking if he could
create family seals for them as well, so they didn’t have to show their parents their report
card. Eventually though, Honda got caught, but his dad wasn’t mad that he’d done it, his dad was mad
his work had been sloppy enough to get found out. Despite not getting much of a formal education,
Honda was quickly developing his skills in his father’s workshop, and had a genuine
fascination with machinery and engineering. Then in 1917, when Honda was 11 years old,
he heard that a pilot named Art Smith was going to demonstrate the aerobatic capabilities of the
biplane. So, he decided to “borrow” some money from the petty cash box, took one of the bicycles
in his father’s shop, and rode for 20 kilometers to the military airfield to watch the show.
Except… When he got there, he realised he didn’t actually have enough money for the admission fee,
so he decided to climb up a tree to watch the demonstration. Honda found it incredible,
and this only increased his love for machinery and invention. But when he returned home,
his father had discovered what had happened. Luckily, instead of being angry, Honda’s father
was far more impressed at his son’s determination and initiative. And perhaps deep down he was proud
his son had the same appreciation for engineering that he did, so he let the incident pass.
In 1922, after finishing school, Honda spotted an advertisement in a newspaper, for a car
servicing company named Art Shokai - the ad said: assistant wanted for auto repair shop in Tokyo.
He figured that if the company could afford to be running ads like this, maybe they’d have
spaces available for apprenticeships for young men like him wanting to get into the trade.
So at the age of just 15, he decided to leave home in search of a job, and headed to Tokyo.
Going from his small village to the bustling streets of Tokyo was an intense experience.
But his hunch had been right - and he was able to get an apprenticeship working at the Art
Shokai garage. Unfortunately on his first day he was given the job of cleaning up,
scrubbing the dirty floors, and preparing meals for the owner. In fact, he would often end up
babysitting the owner’s child… so not exactly what he’d had in mind. Plus apprentices at the
time weren’t paid, so he was merely given a small space to rest and a bit of food to eat.
But soon after joining, an earthquake hit Tokyo, which caused many of the mechanics
to have to leave work for a while to repair their homes. The auto repair shop was now understaffed,
and Honda finally got his chance, as he was asked to fill in as a mechanic.
By working extremely hard, this role was soon made permanent. Honda was eager to learn, and spent his
days repairing cars and motorcycles, which at that time were limited to only the upper class. It was
here that Honda encountered a very wide range of vehicles from all different manufacturers,
which sharpened his knowledge even more. Honda would always take a lot of care in
examining each vehicle assigned to him for repair, and on his work breaks, he’d read whatever car
related magazines he could get his hands on. It wasn’t long before Honda was not just repairing
vehicles, but designing spare parts as well. Given that Honda was doing a lot of great work
for this company, one of the owners named Yuzo, took it upon himself to educate Honda about the
business side of the trade as well as the technical side. Yuzo was the ideal mentor
for Honda, and it was him who introduced Honda to the world of motorsports. You see, in 1923,
Yuzo had decided to begin manufacturing his own race car, and he asked Honda to help him out
with building it. Their second design, which they named the Curtiss, ended up winning the
1924 Japanese Motorcar Championship. Honda was on board as the accompanying engineer,
and this victory at a young age - both winning the race and the thrill of helping to build
something like this - was a feeling he’d never forget. And a feeling he’d continue to chase.
When he turned 20, Honda was called up to fulfill his obligations in military service. However,
during the medical examination, it was found that he was color-blind and was excused from his duty.
Shortly after this in 1928, his mentor, the owner of Art Shokai, presented him with an opportunity,
saying that he wanted Honda to set up his own branch of Art Shokai in Hamamatsu,
a Japanese city very close to the village where Honda was born.
Given Honda was still in his early 20’s, it was a lot of responsibility to run his own
auto repair shop, but he’d clearly impressed his managers, and so Honda gladly accepted.
Honda’s branch grew slowly at first. It was just him running it all by himself initially - and when
people brought their cars in for repairs, some were put off by how young he seemed,
assuming he was inexperienced. But he eventually managed to build up a good reputation in the area,
and by the mid 1930’s he’d managed to hire a full team to help. At last, Honda was making good money
for himself. He’d worked his way up from an unpaid apprentice looking after his boss’ baby,
to running his own successful auto repair shop. And as a rich young man, Honda was never shy
about having a good time. There are many reports of
him enjoying himself in the company of lots of geishas, stories of him throwing
parties and even dancing nude at his wedding. Honda worked hard, but he partied even harder.
However sometimes his nights of drinking did not end so well - there was one incident when
drunk where he accidentally knocked a geisha out of a window from the second floor. Fortunately,
she survived by landing on some wires - although they reportedly had to cut the electrical wires
to save the woman, which resulted in the entire town experiencing an electrical power outage.
Honda also continued to enjoy racing, but that too would nearly end in a fatal disaster,
when in 1936 Honda was involved in a serious car crash during the Japanese high-speed rally, that
forced him to quit racing completely. He spent three months in hospital, and had a permanent scar
for the rest of his life - the doctors commented that he was lucky to get out alive at all.
The incident was a wake up call for Honda. Suddenly having an influx of wealth had led
to him a bit of a playboy daredevil lifestyle; but several close encounters had made him reevaluate
what he really wanted. He realized that even though his auto repair shop was doing well,
he was dissatisfied with car repair. It was time for a new and bigger challenge.
Honda saw a lot of potential in manufacturing, and asked Art Shokai if he could turn his auto repair
shop he was running for them into a separate company where he would produce piston rings.
Unfortunately, Art Shokai did not like this idea at all - the business was doing well and
making a lot of money - they had no interest in stopping that and entering a whole new field,
especially since producing their own car parts rather than repairing
them seemed like a lot more risk and cost. However Honda was determined to pursue his
new vision, so he and a friend decided to go into business together, setting up their own separate
business called Tokai Seiki Heavy Industry. At first, Honda would still spend his days
working at his repair shop, and then spend his nights working on this new car part
manufacturing company he’d started, trying to create piston rings. It was exhausting trying to
do both though, and he didn’t get much sleep. He also took evening classes to improve his
understanding of metals and alloys, and for two years, he worked tirelessly, until he reached a
revolutionary piston design breakthrough in 1939. At that point, he turned over his duties at Art
Shokai to his trainees and began to fully focus on his new manufacturing company. They began piston
production, and for the first time in a while Honda felt truly excited by his work again. But
that excitement was short-lived, as they were soon bombarded with manufacturing challenges.
For example, they received an order from Toyota - but of the thousands of pistons
they ordered from Honda’s company, only three passed Totoyta’s high quality standards.
It was a big setback, but Honda decided he’d go visit universities and factories all over Japan
to further understand the manufacturing process, and develop his skills further.
Eventually, he obtained enough knowledge and skill that he was able to produce piston rings
that passed Toyota’s quality standards. And better yet, Honda figured out a way to mass produce them
using an automated process, which meant even unskilled laborers could produce them. This
meant he was able to produce them in bulk at a relatively low cost. Orders rapidly increased,
and since Honda couldn’t keep up with the demand from his workshop, he opened
a factory to mass produce the piston rings. Unfortunately, just as Honda’s manufacturing
business was really taking off, Japan was gearing up for war. When Japan entered World War II in
1941, many of Honda’s male employees were called for military service, leaving Honda’s plant with
lots of vacant positions. The war also meant that there were a lot of supply shortages,
and Honda had difficulty sourcing materials. When enemy planes dropped fuel cans out of
the sky, Honda would tell his employees to look for the fallen cans as they could still
be used for manufacturing - that’s how desperate for supplies he was.
In 1944, it was beginning to look like Japan would lose the war. And when a bomb
was dropped on one of Honda’s factories, it looked like he might lose his business.
In another cruel twist, just a year later, Honda’s other factory would be destroyed in an earthquake.
It was soul destroying that what he’d spent years building was quite literally turned to rubble.
The company had already been struggling immensely because of the war, but this
was the final nail in the coffin for his company - he was going out of business,
so Honda sold whatever was left of his manufacturing business to Toyota.
There was a massive fuel shortage after the war, and transportation at this time was
limited mostly to bicycles. People needed a way to get around easily and cheaply,
while being extremely fuel efficient. Honda had an idea: he attached a small
motor to his bike, which soon caught the attention of people all around the city.
Sensing this could be a good solution to his country’s problems, Honda created the Honda
Technical Research Institute in 1946 using the money he had left after selling his piston ring
manufacturing business. The sole purpose of this was to figure out the best way to
make motorbikes. Using some surplus military engines Honda had managed to obtain, he was
able to successfully build working motorbikes that immediately became a hit in Japan. Soon,
he was flooded with orders and ran out of used engines, so Honda developed his own engine.
However, to be able to mass produce enough motorbikes to fulfill the demand,
Honda needed more money to invest in production. And unfortunately in the bleak economic conditions
following the war, investment was not easily available. But as always, Honda found a way.
He reportedly wrote letters to 18,000 bicycle-shop owners across the country explaining his idea,
and asking them to invest in his new motorbike design. 3,000 of those bicycle shop owners
wrote back to say they’d invest in Honda’s motorbikes. So, Honda was back in business.
Honda Motors Co. was incorporated in 1948 to manufacture small-capacity motorcycles with
the goal of producing an affordable motorbike that would help Japanese people more easily
get around. Honda also teamed up with business partner Takeo Fujisawa who provided not only
additional investment for the company, but also was a great business operator and strategist,
allowing Honda more time to devote to the product side of the business.
Honda’s first fully-fledged motorbike was the D-type, which stood for Dream - although it was
a bit too bulky and heavy, But Honda soon found success with a new and improved model called
the “Super Cub,” which was lighter, smaller and safer. It was an immediate success, and orders
poured in from all over the country. Honda then turned its focus to entering the U.S.
market. But, prior to the 1960s, the stereotypical image of the American motorcyclist was that of a
rough, unruly, and unsavory character. So to try and change this, Honda ran an extremely successful
advertising campaign with the slogan, "You meet the nicest people on a Honda." This, mixed with
the more lightweight design, encouraged families and younger people to disassociate the motorcycle
from previous stereotypes, and thus reach a whole new market with their motorbikes. As a result,
nearly one out of every two motorcycles sold in the US in 1964 was a Honda motorcycle. And
pretty soon, small lightweight motorcycles were zipping all across American roads.
And by the end of the 1960s, Honda was the biggest motorcycle company in the world, producing about
a million per month. In fact, Honda is still the largest motorcycle producer to this day.
Not only was Honda a financial success, it was a racing success too. in 1966, Honda Motors took
home the Constructor’s Championships in all five motorcycle classes in the Grand Prix, as the team
with the most points at the end of the season. By this point, Honda bikes had won pretty much all
of the major racing titles there was to win. Honda motorbikes were a huge success by all
metrics, but Soichiro Honda still had one dream left that he hadn’t yet fulfilled.
It was finally time for his biggest and most ambitious project to date.
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Ever since seeing his first car as a child, Honda had wanted to produce his own. And given
his own humble beginnings, he especially liked the idea of making an affordable quality car,
so almost everyone could experience having one.
However, almost everyone told Honda that now he’d found success with making motorbikes,
he should stick to that, as there was so much more competition in the car market. Especially
in America where the big car brands were so dominant. But Honda had always been a risk taker,
and after feeling like he’d conquered 2 wheels, he was ready to move onto 4.
Honda Motor Co’s first automobile attempt was actually the T360 mini truck which went
on sale in 1963, but it wasn’t popular and never sold very well. But as always,
when Honda got a setback like this, it just meant he had to figure out a new approach.
Now, in the early 70’s there was a growing environmental movement,
with more concern about air quality and pollution. This resulted in US
cities introducing the Clean Air Act which forced stricter regulations on vehicles.
Immediately, all of the big car manufacturers appealed and said the new rules were impossible.
Whereas Honda simply said: “I’ll find a way” - and set about to build a new revolutionary engine that
passed the new pollution tests - it was called the compound vortex controlled combustion engine,
and was not only more environmentally friendly, but also allowed people to travel further using
less fuel. So whilst the established forces in the American car market were lobbying to
scrap the regulations, Honda had been taking action and finding a solution.
Honda himself would later comment: “When Congress passes new emission standards,
we hire 50 more engineers and GM hires 50 more lawyers.”
By 1972 he’d come up with the Honda Civic, which would be the first car to use this new
CVCC engine. This energy-efficient, compact, and lightweight passenger car was the perfect answer
to the oil crisis of 1973 where gas prices were so high. The Honda Civic light on fuel,
low on emissions, and reliable - essentially it was the perfect car at the perfect time.
And the Honda Civic would soon become one of the most popular cars in the world.
When sales of the Honda Civic crossed one million,
Honda Motors introduced the Accord. This was the more upscale model
intended to attract middle-class drivers looking to mix great design with a practical price point.
Through word of mouth Honda started to develop a reputation for reliability.
Sales were increasing. And Honda established itself as one of the leading car manufacturers.
When the Accord proved to be popular, Honda confidently entered the luxury
car market as well by introducing the Acura brand to America in 1986,
which also raked in large sales both in the US and Japan.
Honda now had multiple different offerings for different types of consumers, all of which were
selling well. Thus, by the end of 1980’s, Honda was the third largest car company on the planet.
After grappling with liver failure, Soichiro Honda succumbed to the disease and died in 1991. Upon
his death, he held an estimated net worth of $92 million dollars. In total, he’d registered over
150 different patents for different inventions. He had three sons, but none of them inherited
the company. Honda and his business partner believed in meritocracy instead of nepotism
and that a business will survive when handled by highly skilled professionals
rather than unskilled family members. Despite the massive loss of its founder,
Honda Motors went on to conquer the American market through comprehensive reorganizations,
improved automobile designs, and innovative marketing efforts.
Of course still to this day, Honda Motors is one of the leading global car manufacturers,
and has gone on to expand into all kinds of new products, from jets to robots.
It’s crazy really, as Honda’s life started out so bleak, with just a simple curiosity
and love for working with tools and machines. But Honda knew what he wanted,
and he committed to it. He took action and adjusted his approaches when things didn’t
work out as he had expected. He understood that if you make a superior product,
people will buy it. And he worked tirelessly to make that happen.
Which is actually pretty similar to Lamborghini - which is an even crazier story you can watch
now by clicking the thumbnail on screen. Anyway, you are a legend for watching this
video right to the end, please remember to turn on notifications for more business mini movies
from MagnatesMedia - and I’ll hopefully see you in the next video in just a second. Cheers.