Legal factors

Political factors

1. Government proposal to limit number of cars being sold in the UK. This would affect the sales of Honda as they couldn't manufacture at the level they previously could have.

2. The UK Government was keen to attract foreign firms to invest in to the UK. Honda investing in England.

3. Pressure to produce cars with cleaner emissions. This is mean that Honda has to invest heavily in R&D to produce cars with cleaner engines e.g. i-Vtec.

Economical factors

1. Investing in Europe, Selling in Europe Manufacturing inside of Europe has meant that they wouldn't have had to add the cost of extra tariff to their cars.

2. Exchange rate - £ to Yen. The weakness of the yen makes Honda's cars expensive in the UK.

3. Income Rising incomes means that people have more to spend, Honda has kept up with this by introducing newer models, especially the new Honda Civic which is to go on sale this year.

4. Cost of Petrol Honda have had to accommodate for the market by introducing more economical cars such as the 1.4 Honda Jazz.

Social factors

1. Language Barriers Honda decided to set-up in Swindon because they preffered to deal in the English Language.

2. Increased desirability of Personalized Cars. Honda is a leading manufacturer of cars which can be easily modified, stylistically and performance wise. This is perhaps their USP.

3. Desire for City cars. This has meant Honda has had to create smaller and economic cars such as the Honda Jazz & Honda Beat.

4. Formula1 - Speed! This is an aspect of Honda which is mainly concerned with showboating rather than profit. Honda is one of the leading motorbike manufacturers and has a huge R&D budget devoted to that cause.

Technological factors

1. Specialisation through machinery Machines that specialise at one task ensures that the product is made much quicker and of a higher quality.

2. Safety Requirements Because of Legal & Consumer pressure, car manufacturers have had to develop cars with significant safety features which Honda would have had to research and test. This would be at the expense of their R&D Department. This is significantly different from a decade ago when crash-testing dummies were used.

3. Clever cars Cars have had to include Satellite Navigation systems etc as standard, Honda has had to catch this up in their newer models.

4. Environmentally friendly cars Honda developed i-vtec, which is a follow on from their infamous i-vtec engines. The i-vtec engine provides fuel economy, ample torque and clean emissions.

Legal factors

1. The new government transport policies that acknowledge powered two-wheelers as a viable alternative mode of transport in the quest to tackle congestion and CO2 emissions.As one of the largest motorcycle manufacturer Honda can have competitive advantage over its competitor such as Toyota.

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