The purpose of project 3 is to study about the automotive industry in generally. Then the scope will going deeply to reveal what innovation was occur nowadays in this industry. The study will take two major players in this industry. These are Toyota Motor Company and Honda Motor Company. Inside this document also will review about how the largest automotive manufacturer such Toyota Motor Company and Honda Motor Company carries out the management of innovation. Innovation management will discuss about Toyota Production System (TPS), Toyota Way, Seven Principles of Toyota Production System (TPS), Honda’s Philosophy, Fundamental Beliefs and Three Joy. At the end of this document, it wills write-down how the automotive industry will be manage in the future that focus on research & development (R&D).

1. INNOVATION
MANAGEMENT
AUTOMOTIVE INDUSTY
Reveal the innovation
Group Members:
• Mohd Syahmi Bin Nuruddin
• Mohd Khairul Najmi Bin Mohd Najid
• Aliff Izamie Bin Osman

2. Introduction
• The automotive industry designs, develops,
manufactures, markets, and sells the world's
motor vehicles.
• Industry begins since the invention of internal
combustion by Nicolaus August Otto in 1876.
• Daimler, Henry Ford, Kiichiro Toyoda, and also
Soichiro Honda change the industry culture by
adopted the innovation in the vehicle
manufacturing.

3. Automotive Industry Originally
• The originally of automotive industry start in
Germany.
• The four-stroke internal combustion engine
invented by Nikolaus Otto in Germany.
• The petrol engine automobile was invented in
Germany by Karl Benz in Germany.
• The diesel engine was also invented by German
Rudolf Diesel.

4. Automotive Industry Originally
• Germany is famous for the high-performance
and high-quality sports cars made by Porsche,
and the cars of Mercedes, Audi and BMW are
famous for their quality and technological
innovation.

5. Innovation Taken Place
• Innovation in automotive industry expands in
line with time.
• From basic primitive operation of four stroke
engines, nowadays the hydrogen fuel cell was
developed to drive the future technology for
future user.
• Big players in this industry nowadays compete
each other to make innovation in their products.

6. Innovation Taken Place
• Volvo Company for example leading innovation in
safety matters in their vehicle.
• Honda from Asia country is a leading innovation in
making an efficient and environmental friendly
vehicle.
• Innovation doesn’t taken place in development of
engine, it also expands in the other parts of
automotive such as safety issue, technology
adopted, material development, customers
satisfaction, even in the management of the
companies it self.

7. HONDA MOTOR COMPANY

8. Honda Motor Company
• Honda was founded by Soichiro Honda, a
Japanese engineer in industrial.
• 1937 – He started produce piston ring for small
engine which lead the manufacturing a small
engine in motorcycle.
• 1948 – He start producing complete motorcycle.
• 1959 – Honda motorcycle first shipping to United
States.

9. Honda Motor Company
• Nowadays, Honda Motor Company is a
multibillion dollar multinational company.
• It is a 1st larger motorcycle and 6th larger
automobile manufacturing in the world.
• Honda also is the larger engine maker in the
world producing more than 14 million internal
combustion engines each year.

10. Honda Motor Company
• Honda’s product including automobile, robot,
marine engine ,power boat, water craft, jet, jet
engine, electrical generators, aeronautical and
other automobile technology.
• Honda’ main competitor including Toyota,
General Motor, Ford, Chrysler and Nissan.

11. Where Does Honda Innovate?
• Honda’s Known knowns – “Making better
better”.
– Honda nowadays have reputation of delivering the
high performance engine in the world.
– Having start as engine manufacturer, it concern about
high efficiency, effectiveness and quality of engine.
– In 1972, Honda produce CVCC engine allowing Honda
achieve the US emission standard.

12. Where Does Honda Innovate?
– In 1988, it announce the VTEC engine which increase
volume efficiency of four-stroke internal combustion
engine.
– In 1999, it announce the introduction of FCX V1 and
FCX V2 engines which were first receive the
certification of commercial use in US in 2002.
– In the future will introduce the new FCX which
efficiently produce zero emission.

13. Where Does Honda Innovate?
• Honda’s known unknowns – “Onwards, onwards
anywhere but backwards”.
– Base on the Honda expertise in the engine, the
company has successful pursue in radical changes in
product ways.
– Thus, Honda invented Honda Jet where have unique
wing engine mount configuration. It reduce drag and
provide more space to build a bigger cabin.

14. Where Does Honda Innovate?
– In 2006, Honda receive the first order for its Honda
Jet which have 35% more fuel efficiency then similar
aircraft. It achieve by the development of high grade
material, aerodynamic, efficient engine and design.

15. Where Does Honda Innovate?
• Honda’s unknown unknowns – “The power of
dream”.
– The cars that do not crash. Honda started to realize
dream about the car which rather than just
protecting again the worse, but prevent the worse
from happening. The new CRW features collision
navigation breaking system warn the driver if the car
is too close to the front. It identified the break and
retract the seat belt if the driver move forward.

16. Where Does Honda Innovate?
– ASIMO, the Honda’s humanoid Robot. Create by
Honda which take 20 years for the development.
– ASIMO is the world’s first humanoid robot which
have programmed with intelligent capability.

17. How Does Honda Do It?
• Honda has regional hierarchical organization
structure that help the company achieve the
objective which is efficiency, effectiveness and
environment friendly.
• Failure – The secret to success. Honda also have
high tolerance of failure.

18. How Does Honda Do It?
• Honda Engineering Company.
– Where the concept & design development of more
effective and efficient occur.
– The activities base on industrial analysis and support
by their expertise such as electronic, computer aided
design, fluid flow, software, material, simulation
technique, mechanics, ceramics and heat transfer.

19. How Does Honda Do It?
• Honda R&D Company - Fundamental research,
trial and error.
– This is where Honda’s fundamental research take
place by using trial and error strategy.
– To offer something of
value to the people of
the world with their
dreams and hopes for
the future.

20. TOYOTA MOTOR COMPANY

21. Toyota Motor Company
• The most innovative automotive company in the
world.
• In 2009, business week magazine ranked Toyota
the 3rd world innovative company.
• Through their effective management system and
productive production, Toyota become the larges
firm in the global industry automotive by sales.

22. Toyota Motor Company

23. Toyota Motor Company
• The core business of Toyota is designing,
manufacturing and selling automobile.
• Toyota has developed many well known brand
such as Corolla, Camry and Prius.

24. Toyota History
• Toyota begins in 1924 with the invention of
Toyota automatic loom.
• The innovation is using the concept of
Autonomation or “Jidoka” to eliminate the need
of human operates and also eliminate the
wasting of production.
• In 1929, Kiichiro Toyoda develop small engine.
• In 1935, Toyoda produce A1 prototype passenger
car.

25. Toyota History
• Two years later, he found the Toyota Motor
Company.
• In 1938, Toyota adopt innovative system called
“Just In Time”.
• In 1957, Toyota export the first Japanese
passenger car to US and established the 10
motor sales company in the US market.
• In 2009, Toyota have impressive 46% market
share in the Japanese domestic market and own
16% in the US market.

26. Toyota History
• However, it still faces the intense competition for
the US, European and Asia market from GM, Ford
and Volkswagen.
• Investment in R&D - To win the battle, Toyota
invest heavily in solving consumer driving issues
which are safety and environment impact.
• Toyota become pioneer in Hybrid technology
development. The firm invest innovative
capabilities to stay ahead from other hybrid
manufacturers such as Honda.

27. Innovation Strategy
• Toyota firm operate:
– Closed system of innovation
– Decentralized
– Highly collaborative
– All employees are encourage to offer ideas to
improve the efficiency.
– Every year, approximately 1 million ideas was
collected annually.

28. Innovation Strategy
• Toyota established 11 region center around the
world:
– 4 in Japan
– 2 in Asia-Pacific
– 2 in the US
– 3 in Europe
• With the half is R&D center, the company create
64 models sale around the world.

29. Innovation Strategy
• Toyota generate radical in incremental and
innovation in its products.
• Toyota heavily invest in R&D activities in the
technical center worldwide and spend
approximately 4.4% from its revenue for R&D.

30. Innovation Strategy
• Toyota R&D center have 3 level of strategy:
– Basic Research
• Vehicle related technologies
• Enhance efficiency
– Technologies Breakthrough
• Hybrid Technology
• Fuel Cells
– Product Development
• Upgrade on current models

31. Toyota Production System (TPS)
• Toyota continuous improving its operating
system according to the principle of “Kaizen”,
“Jidoka” and “Just In Time”.
• Jidoka – Eliminate wasting
during production
• Kaizen – Continuous
improvement
• Just In Time – is an inventory
strategy that strives to
improve a business's return
on investment by reducing
in-process inventory and
associated carrying costs.

32. Toyota Way
• Focus on flow
• Each process must add value
• Interrupted eliminated

33. Kaizen
• The processes are continuously improve through
even smallest incremental innovation.

34. Standardization – “Heijunka”
• Toyota standardize processes in the production
line. It established the same production line
around the world and using same production
procedures for each model of car.
– Using same production line
– Different models, same factory line
• This mean the model of Corolla, Crown, and
some other models can be manufactured within
the same production line.

35. Managing Uncertainty
• Toyota has make excellent first mover advantage
in market segment in hybrid technology.
• It use Japanese market as test for a new product.
• The Prius was launch domestically 2 years before
roll out in European and US.
• “Just In Time” limit exposure to failure.

36. Capturing Value From Innovation
• Cost reduction through efficiency
Drive market share
• High quality produced through TPS
• In term of R&D, Toyota filed its patent to protect
valuable intellectual property (IP).
– 2000 patents for 2010 Prius.

37. Toyota Future
• For Toyota, the future is bright.
• Toyota core competency is it integration
innovative product with innovation in process
and leave the competition line far behind.
• The competency is achieve not through by
mechanical implementation strategy, but its born
organically from the culture started by Sakichi
Toyoda in 1920.
• Until now, innovation is prior and the big thing
for Toyota

38. The End…