How Much Does Honda Spend On R&D Per Vehicle Sold?
Honda Motor (NYSE: HMC) is one of the most innovative auto companies. Its vehicles are known for their excellent engineering, strong performance and high reliability. The company has managed to keep its reputation despite increasing unit sales by close to 12% between 2013 and 2015. Moreover, the Japanese auto maker is now likely to face more pressure as demand for fuel-efficient vehicles is on the rise, with new technologies like battery-powered electric vehicles and fuel-cell vehicles enter or prepare to enter the market. Additionally, the introduction of artificial intelligence features in vehicles also puts pressure on auto companies to keep up with the latest technology trends or risk losing market share. Given all this, it is interesting to see how much each auto company spends on Research and Development per each unit vehicle sold.
As can seen from the table above, Honda surprisingly managed to reduce R&D expenditure per unit sold, while increasing its units sold by close to 12% over the 2013-2015 period. However, increased competition and weakening markets such as Europe, Japan, the U.S. passenger car market and some emerging markets, will likely result in R&D expenditures rising faster in the next couple of years than units sold.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Honda Motor
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