We have a very strong relationship with WWL.
In 2006, Japanese automaker Honda made a strategic decision to expand sales of its Acura-branded products to the growing Chinese luxury automotive market with two critical models not coming from nearby Japan, but rather exported from North America. “If we wanted to penetrate the larger volume luxury segments in China, we had to export those vehicles from North America,” says James Burrell, Vice President of American Honda Motor Co.
The two vehicles are the MDX, a crossover SUV manufactured in Alliston, Ontario, Canada, and the TL sedan, built at Honda’s plant in Marysville, Ohio. The decision was a good one: “The business has been definitely good, as the luxury segment, even during the recession, has continued to grow in China,” Burrell says.
It’s also an important development for Honda, as it marked the first sales to China entirely on its own; all other Hondas sold in China are manufactured in the country as a 50-percent joint venture with a Chinese partner.
From the very beginning of the process, WWL has been working as a partner with Honda in moving an increasing number of cars across the continent to Port Hueneme, about 100 kilometres north of Los Angeles, then across the Pacific to ports in China. “We’ve been Honda’s exclusive carrier from Port Hueneme to China since this all began,” says Jerry Mahoney, Director of Business Development, Corporate Account Management for WWL.
Because of Honda’s huge presence in North America, it handles most of the rail and truck portions of the journey itself. “The cars then arrive at Pacific Vehicle Processing (PVP), WWL’s processing facility at the port,” Mahoney says. “If there is any transport damage we repair that, or handle everything else Honda might need. We attach the marine hooks to the cars, wash them, fill them with a few gallons of fuel, then drive them to the terminal, which is also operated by WWL.”
Then it’s off to China. “We bring the cars to the ports of Shanghai and Guangzhou, stopping to transship in Yokohama, Japan, for vessels bound for Guangzhou,” he says, “and occasionally doing the same for ships bound for Shanghai.”
But, says Burrell, Honda looks to WWL for much more. “We have a very strong relationship with WWL, particularly in areas related to quality,” he says. “We have worked together to try to find ways to minimise damage throughout the entire process. They also helped us develop a new system after we had an issue with the tie-downs on the ships. They created a system that not only let us recycle the eyehooks so we could return them back to the US, but also reduce the chance of the cars being scratched by lashings. It’s important: Chinese luxury car buyers are very particular, even more so than Japanese buyers, who are known for insisting on quality!”
Another quality issue, Burrell says, is related to winter in North America. “We discovered some corrosion on the bottom of vehicles being shipped to China,” he says. “This was being caused by the anti-icing materials they use on roads in the winter in Canada and Ohio. As the cars were driven to the distribution center or on the test track, this was getting onto the underbody and undercarriage, then incubating while the cars were on the ships and leading to corrosion.” Honda and WWL have been working together to create a high-pressure spraying system, soon to be implemented, that will remove the materials before the cars are taken onboard the vessels.
With Honda expanding its Chinese dealerships handling Acura vehicles to 39 this year, it’s clear that the company will be calling on WWL as they develop further logistics solutions for the future.
First founded in 1948, Honda has grown to become one of the world’s leading automotive and engine-building companies: it is the world’s sixth-largest automaker (second in Japan), and the world’s largest motorcycle and internal-combustion engine manufacturer.
Worldwide, the company expects to produce some 3.58 million vehicles in 2011. North America represents the largest source of revenue for the company. Apart from Japan, the US and Canada, Honda has production facilities in Belgium, Brazil, China, India, Indonesia, New Zealand, Pakistan, Peru, Thailand, Turkey and the UK.