Honda is bringing back an independent R&D division to accelerate the development of cars amid pressure from Chinese competitors. The company is once again betting on a separate engineering structure, as it was in 1960. Back then, the independent division allowed the creation of the CVCC engine and the launch of the Civic on the US market. In 2020, Honda abandoned this model for the sake of centralization, but is now reconsidering its approach.
The reason for this is the pace of development of Chinese automakers, including BYD and Geely. They are launching new models in 18 months, while Japanese companies take much longer.
Honda CEO Toshihiro Mibe said after visiting a Chinese supplier: «We have no chance against this». Honda's sales in China fell by 24% in 2025, and plant utilization decreased.
Unlike its competitors, Honda does not form alliances with Chinese companies. Toyota and Nissan are cooperating with local partners to accelerate the development of electric vehicles.
Honda plans to compensate for the lag by internally restructuring and developing production in India. The company sees the country as a base for new global electric vehicles, which will be released later this decade.