why is Honda playing with robots? Or, for that matter, airplanes? Honda is building a factory in North Carolina to manufacture the Hondajet, a sporty twin-engine runabout that carries six passengers. Or solar energy? Honda has established a subsidiary to make and market thin-film solar-power cells. Or soybeans? Honda grows soybeans in Ohio so that it can fill up cargo containers being shipped back to Japan. The list goes on. All this sounds irrelevant to a company that built some 24 million engines last year and stuffed them into everything from cars to weed whackers.
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On fuel cells, Honda is literally years ahead of the competition. The FCX Clarity will go on sale in California this summer. It is powered by a fuel cell that uses no gasoline and emits only water vapor. Though mass production is at least a decade away, the Clarity is no mere test mule. Elegant and efficient, its hydrogen-powered fuel-cell stack is small enough to fit in the center tunnel – a significant improvement over other, bulkier power packs – and robust enough for a range of 270 miles.

The wellspring of Honda’s creative juices is Honda R&D, a wholly owned subsidiary of Honda Motor. Based in Saitama, west of Tokyo, R&D engineers create every product that Honda makes – from lawn mowers to motorcycles and automobiles – and pursue projects like Asimo and Hondajet on the side. Defiantly individualistic, R&D insists on devising its own solutions and shuns outside alliances. On paper it reports to Honda Motor, but it is powerful enough to have produced every CEO since the company was founded in 1948.
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The engineer in Fukui [Honda’s president and CEO] cannot help but be intrigued by what his former colleagues are up to, and his office is only a few steps away from Kato’s. But even with the CEO just down the hall, says Kato, “We want to look down the road. We do not want to be influenced by the business.”
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Honda allows its engineers wide latitude in interpreting its corporate mission. “We’ve been known to study the movement of cockroaches and bumblebees to better understand mobility,” says Frank Paluch, a vice president of automotive design. Honda R&D gets about 5% of Honda’s annual revenues. Most of the money goes to vehicle development, not cockroach studies
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mistakes like the Insight are also the exception. R&D has provided Honda with a long list of engineering firsts that consumers liked, including the motorcycle airbag, the low-polluting four-stroke marine engine, and ultralow-emission cars.