It would not be beneficial to redesign this car and start from scratch. Honda has a one-year deadline to meet for this project before the new tax laws are in effect. Honda has a unique approach to redesign a car from the ground up. Not only do they redesign the body and chassis, they also build a new engine for the new car. They feel that it is the best way to get the best experience of the “new’ car. There is not enough time for Honda to completely redesign the Today with the new frame, chassis, and engine.
The average time is at least 18 months. Also if engineers are pulled away from other projects to redesign the Today, it could hurt future products and affect the market growth in those car sectors. I believe the best approach in this case would be for Kumara to choose the cost effective approach and increasing the engine displacement option. He would be able to guarantee that the Today would be ready in time before the new tax laws, as well maintain the image for Honda.
If they were not able to release a new resigned model f the Today in time, they could lose some of the market share to other competitor and it could even damage its image. I feel that Kumara should keep the car the same, and invest in the minor tooling changes needed to make the engine with ICC. That would be the most cost effective way, after already investing over 5 billion into the development of the current Today. I know this is not the traditional “Honda” way, but this could be seen as an “upgraded” model to the current ICC model, instead of a completely new design.
Also if you look at Honda current lineup of cars, you will see that many of the cars have different engine sizes. Even though they are based on the same design, they still have different engine sizes. (Exhibit B) Now increasing the engine cubic centimeter to 660 will decrease fuel economy, which is a major concern for the Today buyers, but it will also increase the horsepower of the car. (Exhibit 8)That could be a selling point for buyers, that with the increased horsepower you are able to “enjoy’ the car more.