Honda has made a lot of progress in its efforts of entering the aviation industry, and it seems like that time is not far when the general public would get to experience flight in a Honda jet. The aircraft company owned by Honda Motors, called Honda Aircraft Co., has finally received the necessary certification from relevant authorities in Japan, and the company has also been able to successfully complete the sale of its first HondaJet in Japan which will be dispatched from its factory located in North Carolina.
This factory has been operational since 2015, however previously it has been manufacturing planes to be sold in the US market. This year has been particularly interesting for the company, as although it has succeeded in entering a new market, production has seen a sharp decline.
According to analysts, this fall in production output is likely due to an inherent flaw in the selling model being followed by Honda Aircraft Co., which relies on an extensive network of dealers for sales instead of building up its own sales force which could push the product out in the market.
However, according to the engineer pioneering the project Michimasa Fujino, the dealership model works, and the company does not plan on shifting from it anytime soon. The focus for the company is on markets outside the US, particularly Japan and also China where it expects to secure licenses in the coming year.
In the long term, the company plans on launching bigger aircrafts, which shall give a boost to its customer base. For now, analysts have opined that, considering the importance of and demand in the US market, perhaps it would be best if Honda Aircraft placed more focus its selling model here instead of shifting focus to external markets where the aircraft industry is still developing.
Commendable Achievements
There is no denying that Honda Aircrafts Co. has come very far in its journey and considering how the company has grown to become one of the recognizable players in the capital-intensive aviation industry, certainly a lot can be expected from it.
The company stands proud being the only aircraft manufacturer that also manufactures its own airline engines. The credit for this achievement goes to CEO Fujino, who, being an engineer himself, worked for many years to find a way to enable the company to make its own engines. And indeed, in the late 90s, he came up with the engine-over-wing architecture.
Experts are all praise for the creations of the company. Rolland Vincent, who is a forecaster in the business aviation industry, has called the planes beautifully done with quality unmatched by competitors in the industry.
Unfortunately, sales for light jets have not picked up as expected, and although the company had once predicted it would be producing around 90 aircrafts in a year, that goal does not seem achievable at this time.
Inadequate Sales?
Unlike Western companies that take a more conservative approach with investment, Japanese companies take a long-term approach and don’t mind investing in new ventures. A total of around $2 billion has gone into HondaJet to make it worthy of the skies, and although there is hope it will produce enough sales to cover the initial investment many times over, the trend does not seem too satisfactory.
Sales have gone down 30% this year as compared to last year’s figures, which is slightly alarming for Honda Motors as the company has already reported an approx. $380 million in operating losses this year.
The company needs higher sales, which means HondaJet needs to perform well. According to Honda Motors, the dip in sales this year was most likely due to the upgradation to a new model called the HondaJet Elite, and the company expects sales to kick off in the next calendar year.
According to Fujino, the company is patient with the project as exponential growth is expected in the coming years. For now, the focus for HondaJet is to manufacture a top quality product and also to offer the best customer service.
