Otaka keeps honda safe and sound

Although the automobile market is expected to shrink by about 2 per cent in 2008, marking the first decline in Thailand's auto sales since the economic crisis in 1997, the increase in demand for fuel-efficient cars has resulted in one company coming out of the financial crisis almost unscathed.

Japanese auto-maker Honda  escaped the 1-tonne-pickup market drop caused by a surge in diesel price in mid-2008 to enjoy solid growth this year - the only major auto firm to emerge safe and sound. And that's a  clear reason why The Nation's Business Desk decided to name Kenji Otaka, president of Honda Automobiles (Thailand), "Businessman of the Year".

This has been a tough year for industry in  general, but several candidates topped the list for best businesspeople. They included Kan Trakulhoon, president of Siam Cement Group, which despite a drop in net profits still managed to stay in the black; Anusorn Sangnimnuan, president of Bangchak Petroleum, which earned Bt600 million from retail in the first nine months; and Thirapong Chansiri of Thai Frozen Products, whose firm continues to expand.

Under Otaka's reign, Honda is the only auto-maker to have shown a positive growth rate all year, as other auto companies continue to be buffeted by the global slowdown.

Industry observers attributed Honda's success to its focus on passenger cars. As diesel prices skyrocketed to more than Bt30 per litre mid this year, car buyers opted for smaller passenger cars, and Honda met the demand with its new Jazz and City models.

In addition, sales remained active thanks to the craze for E20 - petrol with 20 per cent ethanol. Since late last year, all new models of Honda have been made E20-compatible.

According to official sales figures, Honda sold 72,000 passenger cars in the first 11 months of this year, equivalent to a growth of 47.8 per cent, resulting in Honda getting a 35.4-per cent market share in the passenger car market.

Honda was also the first auto-maker to start 2008 by launching a new E20 model - the Accord, Honda's major model in the mid-sized passenger car segment.

Later, engines of the popular CR-V recreational vehicle, as well as the older Jazz and City models, were tweaked for E20 which - helped by cuts in excise duty of between Bt30,000 and Bt100,000- boosted Honda's sales even further.

Put in charge of Honda's sales operation in Thailand for just over a year, Otaka brought his company one step closer to the market leader Toyota, and was made president in June last year.

"We believe the market has grown because more consumers understand the characteristics of passenger cars that are suitable for present day use," he said, adding that the Jazz and City were smaller and more capable of responding to consumer needs  for lower fuel costs.

Otaka said the present market conditions were also beneficial to Honda's eco-car, which is expected to become popular once it is introduced in 2010.

He said the eco-car project was moving ahead as planned, though details could not be released at present.

"The US financial crisis has spread globally and it would be difficult to predict next year's situation. But we believe that in the long term, Thailand will become a passenger-car production centre with a good future," Otaka said.

Otaka is one of Honda's key executives who played a strategic role in leading the brand in Southeast Asia. He has also overseen Honda operations in Malaysia, the Philippines and Indonesia.

He first joined Honda's advertising division in 1981, becoming  involved in the region from 1985 when he was made the Asia and Oceania division manager at Honda Motor, Japan.

His first overseas posting came in 1992 when he became director of Honda Auto Parts in Malaysia. In 1999, he was made president of Honda Car Philippines; and in 2002, vice-president at PT Honda Prospect Motor in Indonesia, a post he held for five years before being appointed president.