There was a war between Honda and Yamaha
Honda and Yamaha, the two motorcycle manufacturers that are famous for building reliable and quality machines, had a war in the 70’s. Almost half a century passed and people have forgotten this matter or did not know about it. What happened then? Who started it? Who was the winner? In this article, I will briefly introduce you the history behind the Honda-Yamaha War, I will try to tell the story as objective as possible but there could be one or two things be wrong, bear with me and let’s go back to the 70’s.
After WWII, the economy system and social infrastructure are totally destroyed. Japanese people were urged to rebuild their homeland. Transportation became more of a living demand and getting more and more important. Adults wanted to take their kids to school fast and go to work, the milk or newspaper deliver guys want to earn more cash, even the police wants something they can use to chase criminals. Honda took this chance and quickly became the biggest motorcycle (or moto-bicycle) manufacturer at the time. In 1969, with the very first inline-four engine, disc brake equipped CB750’s success, Honda shocked world motorcycle industry.
By 1970, Honda was absolutely dominating the motorcycle industry, both inside and outside Japan. But Soichiro Honda (the founder of Honda) did not want to stop there. Through decades of hard working and 1964 Tokyo Olympic game, Japan had caught up quickly. From 1960 to 1967, Japan national income was doubled. The motorcycle demand started shifting to car demand as people got wealthier. Honda decided to diversify into automobiles, and to make sure they will dominate the car industry too, Honda deployed their strongest R&D team, mechanics, and many other staffs. Yamaha, on the other hand, saw this as the once in a lifetime chance to beat Honda and become the leader of motorcycle industry. What Yamaha did was this bike:
A scooter? Challenge the mighty Honda with a scooter? Yes, Yamaha did that and was successful. This so-called “family bike” was popular among house wives because the scooter has no foot pegs so it’s easier for women to ride it with skirts. Additionally, it was sold relatively cheap at 69,800 JPY and the bright color design won a lot of people’s heart. Of course Honda had made some bike just like the Passol, but Honda thought the “family bike” market is going to shrink while Yamaha thought the opposite. Who got it right?
Yamaha’s Sneak Attack
It was Yamaha.
Students still need some easy to ride and affordable bike to commute to school, and people that ride big displacement motorcycles also need a secondary bike to ride around town and do grocery shopping. As a result, for the first time in Japan motorcycle history, Yamaha sold more units than Honda. This is where the war started.
Yamaha had a background that receiving technology assistance from Honda ever since they started to make motorcycles so the two companies had a very good relationship. However, the new CEO of Yamaha, Hisao Koike, decided to take this chance to kick Honda off the share leader throne and he actually said that, “(Yamaha) will replace Honda in motorcycle field”. Not only Suzuki and Kawasaki, but also entrepreneurs from other industry were thinking that is absolutely suicidal, just like grabbing a sleeping lion’s tail. However, Yamaha was serious about this. They fired all the employees and even the managers that had a relationship with Honda, setting their annually goal of selling 950,000 units.
By the time Honda was famous in the automobile industry for inventing CVCC engine that being the very first one to pass emission standard set by Clean Air Act of 1963. Yamaha’s sneak attack put Honda in a dilemma: Honda will either keep focusing on the 4 wheels market which, looking fantastic by the time, or switch back to 2 wheel production that will cost them a good fortune. Kiyoshi Kawashima, the CEO of Honda by the time, said:
We are a motorcycle manufacturer, after all.
And made many of the employees from automobile department back to motorcycle department, planning on making a counter attack.
Honda’s Counter Attack
The first bike to answer Yamaha’s provocation is this:
Followed by many other small displacement scooters, Honda was barely able to hold the top share of 1980 in Japan domestic market. A lot of activities were under the table. For example, Honda will pay dealerships good money if they committed only sell Honda bikes, and Yamaha would do the same, or even sell scooters in Mazda dealerships, etc. It was truly a war, both parties tried their best, or worst, to beat the other one.
For example, Honda’s salesman would go to motorcycle shops and say he’s here to help moving around bikes. What he would do was to push all the Honda’s in front of Yamaha’s. 30 minutes later the Yamaha salesman came in and did exactly the opposite. It actually happened. There was over 1,500 salesman from both parties in Japan just doing this. The out the door price was something one can never imagine: it’s normal to sell a brand new bike, current model year, with lower than half of MSRP. If you buy multiple they would offer even more ridiculous price. It was bicycle like cheap.
Motorcycles are known for having one of the best profit rate in vehicle industry (around ~20%, cars are around 5%), but Honda and Yamaha wanted to kick each other’s ass so bad that they would publish new motorcycles on a monthly basis, if not sooner. No party would generate any profit in such a tight circle. The by-product of the Honda-Yamaha war was countless new models. Something famous:
Honda would giveaway this foldable motorcycle with a sale of Honda Today (a car). Motocompo can be folded and put in the trunk of the car. Yeah, the war went that BAD. A manufacturer would giveaway bikes just to earn more market share. This war was 3-year long and Honda barely stopped Yamaha from taking its throne. The end of war was coming.
Honda and Yamaha were in trouble. Too many bikes produced, too cheap they were sold. Honda was still barely holding up, but Yamaha had nothing left. The profit and loss showed Yamaha had a loss of $200,000,000 because of the war. Yamaha called cease fire.
Hisao Koike held a press conference admitting that Yamaha had started and lost the market share war, apologized to Honda and would quit his job as Yamaha’s CEO. That was the end of this war that had no winner. However, the victim that hurt the most was neither Honda nor Yamaha.
You guys are doing it too much.
Said Osamu Suzuki, CEO of Suzuki at the time. That’s right, Suzuki was one of the most hurt victims along with Kawasaki. Osamu tried to talk to Honda and Yamaha, tried to make them stop, but it was too late, too expensive to stop them. Profit and pride don’t matter no more, Honda and Yamaha just want that top share title. Suzuki failed to response to this sudden market change and had a loss of $10 billions, almost went bankruptcy.
The Honda CEO Kiyoshi Kawashima created many haters inside of the company, too. He quitted to work as a CEO not too long after. The war had no winner. Honda and Yamaha, both parties just wanted to be the top of the market, using their pride of being a motorcycle manufacturer as the gambling chip.
Nationality is unknown, Ryan is an experienced rider and custom bike builder, spending most of his time in garage trying to make things work. He rides, he writes, and he misses In-n-Out.