Executives have admitted that a new approach is needed to prevent Honda from falling behind in emerging areas such as autonomy and electrification.
Honda executives have promised to reform the company's way of doing business in an attempt to regain engineering credibility.
In an uncharacteristically self-critical interview with Reuters, chief executive Takahiro Hachigo admits that "there's no doubt we lost our mojo -- our way as an engineering company that made Honda Honda."
Company leaders apparently believe Honda became too narrowly focused on achieving incremental improvements to manufacturing efficiency. R&D chief Yoshiyuki Matsumoto is particularly blunt in his assessment, noting that Honda became "obsessed" with beating rival Toyota in terms of production volume and profit.
"We started to forget why we existed as a company to begin with," he says.
The automaker is now attempting to broaden its engineering perspective beyond the borders of Japan, create a new corporate culture that deemphasizes cost-cutting, and form 'skunkworks' teams that are given more leeway to pursue innovative ideas.
The secretive group is said to be already pushing for significant changes including a streamlined development process, enabling the company to quickly respond to changes in market demand, and an increased focus on plug-in hybrid powertrains.