As a comprehensive mobility company, one major pillar of Honda’s efforts to provide a wide range of mobility and services is the Digital Transformation (DX) initiative. This issue of Honda Stories introduces Honda’s DX initiatives.

The automotive industry is facing a once-in-a-century transformation, which Honda positions as its second founding. In its 2024 Business Briefing announced in May this year, Honda introduced its efforts to continue to be a company that society wants to exist as a comprehensive mobility company looking toward 2050.

One of these initiatives is the transformation of its business model to provide new services and value by combining Honda’s wide range of products, including motorcycles, automobiles, power products, outboard motors, and aircraft, with digital technology.

To achieve this transformation, business efficiency needs to be improved by utilizing digital technology and data in all operations, including product, procurement, production, product planning, and post-sales service, and to evolve into a structure capable of creating more competitive products and services.

To achieve this, Honda also needs to complete IT-based operational reforms, such as acquiring digital software skills. It is essential that all Honda employees deeply understand the value of, and use in their daily work, digital concepts and data as their own missions.

To achieve these reforms, Honda has formulated a DX vision and is now fully engaged in DX initiatives.

How? What is Honda’s DX Vision?

Honda has been promoting various initiatives under its DX vision to establish a competitive advantage, by increasing the speed of business model transformation and business efficiency, through business process reforms using digital technology.

The movement to promote DX gained traction around 2020. Honda has been expanding its electrification business in response to growing awareness of carbon neutrality and a circular economy, and has recognized the importance of reforming its structure by improving the efficiency of existing operations. Data utilization is also essential to realize Honda’s 2030 Vision, which states, “Honda aims to provide everyone with the joy of expanding the possibilities of life.”

In this age, where the speed of value creation is needed across the entire company and cannot be met by simply systemizing and streamlining single business unit or service, a company-wide system that combines collecting, creating, and using data is required.

Read more about Honda’s electrification business initiatives
（https://global.honda/en/stories/068.html）

Honda’s DX Strategy #1
To speed up the transformation of business models as stated in its DX vision, Honda will first revamp the core system that supports its business operations and build a digital platform that maximizes the value of data.

Honda’s DX Strategy #2
To improve the efficiency of its existing operations, Honda is focusing on automating employees’ daily routine tasks, using 24 tools for diverse purposes including paperless operations and automation. Honda is also one of the first companies to internally adopt and utilize generative AI in areas such as document creation and knowledge utilization.

In addition, construction of a company-wide generative AI infrastructure was completed in March 2024. Starting from the area of development, Honda has accumulated past internal document data to create an environment in which existing knowledge and know-how are preserved.

Honda has collected a wide range of data from various internal and external sources, including development, production, and sales, and is making use of this data in its business activities, including quality assurance.

Honda’s DX Strategy #3
To promote DX, productivity and efficiency of each and every employee needs to be improved, as well as an organizational structure that will enable Honda to mobilize its strengths to take on even greater tasks.

To improve employee productivity and efficiency, Honda is working to create a culture and build a system for DX promotion through IT and digital literacy education for all employees, training of division DX promotion leaders (Top Guns) who drive business efficiency, and the Honda DX Expo, an in-house online event in which employees can participate.

“Honda’s strength lies in the strong ambition of each and every employee,” says Kawai.

In the online community, where employees deepen their understanding of AI usage and programming and improve each other’s skills, a variety of courses are held daily, led by top guns, AI experts, and other personnel, who promote the use of digital technology. Many employees participate in these courses.

There is also an urgent need to build a system that looks at the entire organization. Honda will create a more efficient, standardized, and common foundation based on an overall view of the entire organization, and deploy the system globally in a short period.

This initiative to create a global system is aimed specifically at accelerating the electrification business, including a comprehensive value chain for EVs. The next challenge is how to tackle and build through these initiatives.

The DX promotion staff to overcome Honda’s second founding period have been nurtured, their awareness toward the goal has been unified, and management to on-site leaders are in step. Now that Honda has a clear idea of where it is headed, it is now in the stage of clearly defining milestones to achieve the next goal.

Honda’s DX challenge will still continue.