Introduction: Underestimating the Japanese

In 1962, the Honda Motor Co., a Japanese motorcycle manufacturer founded fourteen years previously, made its first automobile. Entering the four-wheeler business had been a hurried affair, rushed along because it looked as if the Japanese Ministry of Trade and Industry (MITI) would try to prevent new firms from joining Japan’s small automobile industry. MITI’s fear was that the sector’s international competitiveness would be undermined by a plethora of small producers unable to reap economies of scale. Between 1958 and 1962 Honda had moved fast, and its engineers came up with a small truck and a small sports car so that Honda could claim already to have joined the ranks of the automobile producers.