Korean media: "Unable to compete with China," Honda returns to 1960s R&D system!

On May 11, South Korean media outlet *Herald Economic* published an article stating that Honda has announced a return to its 1960s research and development system in an effort to reverse its declining performance—precisely the system that once fueled its past successes.

Having recently withdrawn from its U.S. electric vehicle plans, Honda has revised its strategy by restoring its engineering teams to a semi-independent structure to strengthen innovation.

This approach was first introduced in the 1960s, granting engineers autonomy and enabling breakthrough technologies such as the emissions-reducing CVCC engine in the 1970s. By turning the first-generation Civic into a bestseller in the U.S. market, this innovative system laid a solid foundation for Honda's transformation into a global automotive brand.

For reasons of efficiency and speed, this philosophy was abandoned around 2020, leading to a shift toward centralized development organizations.

Now, Honda has decided to pivot away from rigid structures and revert to the past model—built on free creativity—that once led to success. Analysis suggests that the rapid growth of Chinese automakers is behind this strategic shift.

Honda CEO Toshiro Sato expressed a sense of crisis after visiting Chinese suppliers, saying, “We cannot compete with them.”

BYD and Geely have rapidly gained market dominance by shortening their new car development cycles to about 18 months, while Japanese companies, still requiring several years for development, are losing competitiveness.

In fact, Honda’s sales in China declined by 24% in 2025, continuing poor performance that has led to reduced factory utilization and scaled-back new vehicle plans.

Meanwhile, competitors are producing electric vehicles faster, at lower prices, and with greater intelligence.

Tesla and Nissan are partnering with Chinese firms to enhance their competitiveness in the EV sector, while Honda aims to break through through internal innovation.

At the same time, Honda’s goal is to turn India into a production base for electric vehicles, simultaneously reducing costs and securing technological capabilities.

Original source: toutiao.com/article/1864892133674265/

Disclaimer: The views expressed in this article are those of the author alone.