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Why Is Honda Incomplete without Its Power Products Segment?

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Honda’s business segments

Previously in this series, we discussed Honda Motor Company’s (HMC) two primary business segments—Automobile and Motorcycle. The company offers a range of power products that we’ll look at in this article.

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Brief history

Honda entered the manufacturing business of power products in 1953. Initially, the company began manufacturing small engines for power equipment products. In 1973, Honda took a big leap in this segment when it introduced Honda generators, tillers, and outboards into the US market.

In the next ten years, the company added other power products such as water pumps, lawnmowers, and snow blowers to its product lineup.

Manufacturing of power products

Honda’s power products are assembled at 11 different manufacturing facilities around the world. A key manufacturing facility, Honda Power Equipment Manufacturing (or HPE), is located in Swepsonville, North Carolina, and was founded in 1984. The production of Honda’s power products such as engines, lawn mowers, snow blowers, pumps, tillers, and string trimmers takes place at this facility.

For the research and development of these power products, the company uses two facilities located in the US and Japan.

Revenue from Honda power products

Honda’s (HMC) revenue from its Power Products segment is only a fraction of what the company makes from its Automotive segment. In fiscal 2016,[1. April 2015–March 2016] Honda’s revenue from its Power Products segment comprised 2% of its total revenue.

Nevertheless, Honda’s power products are known for their quality and performance, and they play a critical role in expanding Honda’s brand presence worldwide. Note that manufacturing power products differentiates Honda from other mainstream automakers (FXD) such as Toyota (TM), General Motors (GM), and Ford (F).

Continue to the next part to learn why Honda’s Financial Services segment is important for its business.

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