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Honda Cars Philippines Inc. (HCPI) is a subsidiary of Honda Motor Co., Ltd. Of
Japan, Duly incorporated in October 1990, completing its plant and start production of
completely knocked-down units in 1992 and capturing a strong foothold in the passenger
car sales market in 1996.

In 1997 and 1998, HCPI was among the business World’s Top 100 companies. HCPI is
in the passenger car and sports utility vehicle in the commercial vehicle industry.
The company product line includes the following: Honda Accord, Honda civic, Honda City,
Honda CR-V, Honda Legend, and Honda Odyssey.

HCPI offers a wide array of vehicles which include among others passenger cars, sport
utility vehicles and even tricycle, making all these products available through an extensive
network of authorized Honda Dealers all over the country.

The manufacturing plant is located in Sta. Rosa Laguna in 236,000 sq.m property,
employing 1000 associates as of October 1992. The stockholders of HCPI are the
following: Honda Motor Co., Ltd. (47% share), Mitsubishi Corporation (23%share), Ayala
Corporation (15%share) and Rizal Commercial Banking Corporation (15% share).


The main problem of this case study is how Honda Cars Philippines Incorporation can
sustain their present market position to increase market share in passenger car models even if
there is a keener competition due to other competitor’s dynamism and aggressiveness in terms
of sales?

What strategic major initiatives are required of HCPI to dramatically outperform other players
in the industry in the light of changing market conditions?

Long term:

To increase market shares in the passenger car models.

To sustain its market position even if there is a keener competition.

Short Term:

To create an extensive advertisement for customer awareness and promotion of the products.


1.Industry sales decline tremendously due to the de facto peso devaluation

2.lost market shares in the passenger car industry

3. Asian financial crisis due to the high set up cost and operating capital requirements





 High and powerful research and development (R&D)

 Innovation
 Best market share leadership
 Strong and powerful brand equity
 Different and unique products
 One major strength is the revolutionary engine technology with the help of which Honda is
gaining success day by day
 Popularity is termed as one of the best strength which results in betterment for the


 Cost structure of Honda is high as compare to other automobile manufactures

 Apart from Nissan & Toyota, Honda requires privileged purchase deposit
 Honda focus more on international deposits as compare to domestic deposits
 Civic model is consider s one of the major weakness for Honda Company
 Honda products are termed as inoffensive in terms of style and design
 Prices for non-luxury vehicles are far high as compare to other manufactures



 Emerging market is one of the best opportunity for this company

 Various models are there which caters the lower segment
 Improved incomes of many Filipinos.
 Healthy economic indicators for immediate years relaxation of international trade barriers
by government


 One of the major threat is the economic slowdown

 All the external changes for instance taxes politics as well as government are the major
threats for Honda Company
 Another threat is the lower cost competitors
 Price war is also consider as an important threat for this company
 Oil prices are contributing a lot towards the loss of Honda company
 Second movers are the major threat for Honda Company
 Substitutes products are the major threats for the Honda Company
 Economic crisis in the country may arise.
 Continued increased of gasoline prices.
 Reluctance of banks to lend the private sector in spite of the decline in interest rates.
 Strong probability of manufacturing capacity glut for passenger car manufacturers due to
brightened prospects in the entire manufacturing sector.
 Emerging trends towards SUVs and AUVs.

Alternative solutions

1.Make an innovative advertisements and promotions that will create an impact or attraction to
the buyers and customer product awareness.


 To reach significantly more people to increase customer product awareness.

 It introduces a new product in the market.
 It may create an expansion of the market.
 It may increase sales.
 It supports the salesmanship.


 Added Cost
 Company has to spend a large amount on advertising
It increases the costs of products Confusion to buyers
Many a time distorted version of reality is shown in the advertising
Some advertisement is in bad taste
Foul language and objectionable pictures are being used in advertising in order to attract
a particular class

2.Search for more suppliers of spare parts of passenger cars to reduce high costs of spare parts
and product pricing.


 It may lessen or reduce costs of spare parts.

 It may also lower product pricing.


 It may be time and effort consuming to search for suppliers instead of doing other
important matters.
 Not sure of quality of spare parts for the new supplier of it.

3.Make an extensive research and development to create new product like designing a product
that will use alternative resources like electricity instead of oil or product that will be an
environmental friendly.


 It may create new market.

 It may develop new opportunities.
 Competitors may have reached a declining phase if your new product is successful.
 It may also increase sales and market share.


 It can be costly to develop a new product.

 May lead to product failure.

Short Term:
 Create an extensive advertisement

Creating an extensive advertisement helps to build salesmanship.

Long Term:
 Make an extensive research and development to create new product like designing a
product that will use alternative resources like electricity instead of oil or product that will
be an environmental friendly.

 Create a new product line that is new in the market.

 Marketing strategy plan should be revised

 Develop a product that is according to the nations culture

Feasibility Study,
Researching for new trends in
Research & Development Customer’s Feedback,
commercial vehicles particularly in mos.
Department Internet, Social media
passenger cars.
Research & Development,
Study on cost reduction/ minimizing
Production and Suppliers 2 mos.
cost for spare parts
Budget Dep’t
Internet, computer,
Making Research and Development
Research & Development presentation 2 weeks
proposal for approval.
Spare parts and other

Production of new product Production materials in producing 5 mos.

new product
TV commercials,

Advertising and promoting the new Internet and Social

product for customer product Advertising agency, salesman Media Promotions, 1 mo.

awareness Tarpaulins, flyers, and