Marketing of Honda motorcycles in the USA.

Essay by wetoddUniversity, Master'sA+, December 2003

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The American Honda Motor Company was established as a subsidiary by

Honda in 1959. During the 1960's the type of motorcycles brought by

Americans underwent a major change. Motorcycle registrations increased

by over 800,000 in five years from 1960. In the early 60's the major

competitors were Haley - Davidson of U.S.A, BSA, Triumph and Norton of

the UK and Motto - Guzzi of Italy. Harley-Davidson had the largest

market share with sales in 1959 totalling a6.6 million dollars. Many of

the motorcycles produced were large and bulky and this led to the image

of the motorcycle rider as being one who wore a leather jacket and went

out to cause trouble.

The Boston Consulting Group ( BCG ) report was initiated by the British

government to study the decline in British motorcycle companies around

the world, especially in the USA where sales had dropped from 49% in

1959 to 9% in 1973.

The two key factors the report identified was the

market share loss and profitability declines an the scale economy

disadvantages in technology, distribution, and manufacturing.

The BCG report showed that success of the Japanese manufacturers started

with the growth of their own domestic markets. The high production for

domestic demand led to Honda experiencing economies of scale as the cost

of producing motorbikes declined with the level of output. This provided

Honda to achieve a highly competitive cost position which they used to

penetrate into the US market. " The basic philosophy of the Japanese

manufacture is that high volumes per model provide the potential for

high productivity as a result of using capital intensive and highly

automated techniques. Their marketing strategies are therefore directed

towards developing these high model volumes, hence the careful

attention that we have observed them giving to growth and market

share." (...