Interview with Honda Malaysia’s M. Ozaki
Mitsuru Ozaki, the first CEO/Managing Director of Honda Malaysia Sdn Bhd (formerly DRB-Oriental-Honda Sdn Bhd), was recently reassigned to a new position in Honda’s China operation. His 21 months in Malaysia saw him starting up the new joint-venture distribution company with Malaysian partners and experiencing various challenges. AUTOWORLD.COM.MY had a chance for a brief chat with him before he left for his new assignment.
Excerpts from the interview:
Honda Malaysia has three experienced shareholders – Honda Motor, DRB-HICOM and Oriental Holdings. Is such an arrangement practical for business operations?
For me, it has been quite a big challenge because there are different cultures and different management philosophies among the three parties! But that is not unusual when you have a joint-venture.
Honda Motor, as a global automobile manufacturer, has policies which are very long-term and therefore some of these policies may be different from those which our partners have. We need to have more discussions to agree on some kinds of issues because Honda will be looking at things from a manufacturer’s point of view while our partners would be thinking of the trading point of view.
Operationally, however, I would say that the business runs very well and the joint-venture benefits from the long experience of each partner. Unlike, say, UMW Toyota Motor, we have extra partners who know the motor business in Malaysia well and I feel that is our advantage.
South Korean carmakers are now making aggressive moves into the Malaysian market with cheaper cars and it is clear that they are winning over buyers and gaining market share. What do you have to say about this new development?
In the case of Korean cars, you will find that they are being positioned in niche areas of the Malaysian market. They are in that price sector between the national cars and the Japanese and European cars which are at a higher level. However, we have found that the Koreans’ strategy of offering cars with bigger engines but at lower prices is not just being used in Malaysia but also a number of other markets.
Clearly, their strategy is to take market share away from the established makes. But it must be quite expensive to do so and can they maintain this strategy for some time?
I really don’t know and I too find it hard to understand how they can maintain their cheap cost for long. But from the reports I have seen, companies like Hyundai are already going further by having stronger tie-ups with Mitsubishi Motors and DaimlerChrysler. This means they can become stronger and more aggressive in future, with more advanced technologies available to them.
UMW Toyota Motor has said that in 2003, they will offer a cheaper model around RM80,000 and this is to challenge the Koreans. What about Honda?
It is not just Toyota that is reacting to the challenge of the Koreans although you may see that happening only in Malaysia with them. I can tell you that all Japanese carmakers are now reacting in the same way and you can see this in the newer models. For example, we have the new Fit or Jazz model which is doing very well in Japan and has also been well received in overseas markets.
Concerning distribution in Malaysia, Honda decided to establish the new joint-venture a year ago and handle distribution directly. So far, Honda has been the only Japanese carmaker to do this although European carmakers like Volvo and DaimlerChrysler have begun to take over this aspect of business. Do you see this as a trend for Japanese companies?
In Malaysia, there are some special conditions such as your national car programme and government policies, so Honda has felt that a joint-venture is the best approach here. I cannot really speak for other companies as they would have different strategies.
Has the Honda brand image changed for the better in the past year?
As you will recall, until two years ago, Honda was No. 1 in the non-national car segment. Unfortunately, now we find ourselves a number of positions down and of course, this has had some effect on the Honda image among Malaysian consumers. Customers also had to wait some time for the new CR-V as we had some limitations in terms of supply.
That is why we are anxious to get our own plant in Melaka to be operational as soon as possible. I am very confident that we will be able to offer our customers products with much higher quality from our own plant which will start production at the beginning of 2003. I will admit that at the moment, we do get complaints from customers and in many cases, I personally send an apology letter to customers because I feel very sorry that they are inconvenienced or unhappy about our products or services.
Honestly, we are still not satisfied with the overall quality of after-sales services yet so we will be making a greater effort with our dealers. So we are educating and training our dealers to give superior after-sales support services to Honda customers.
In appointing your dealers, you make 3S – sales, service and spare parts in one location – a condition. This is quite an expensive investment, isn’t it?
Yes, that is true for the newer dealers so we are usually looking at big players who have the financial resources for this. We feel it is very important [to have a 3S operation] in later years when the market opens up for AFTA, so we want to prepare our network now.
This is our commitment and pledge to all our valued Malaysian customers – that Honda will give the exemplary quality that our products are known for all over the world. They can also expect readily available and fairly priced parts and world-class after-sales service.
AUTOWORLD.COM.MY wishes Mr Ozaki good luck in his new position in a market which will obviously present even bigger challenges! Honda Malaysia’s new CEO/MD will be announced in the near future.
