Honda Hybrid Cars

Honda Hybrid Cars

Introduction

Honda Motor Co. Ltd is a Japanese company making cars, motorcycles and mopeds. It also manufactures engines for boats or equipment for gardens or households. The company is known for making cars that do not require continuous repairs and are very durable. Honda produces more than 28 million engines per year and is a world leader in production and marketing of motorcycles. It is also the world's largest manufacturer of internal combustion engines and one of the 40 largest global corporations. Honda operates globally with a network of 434 subsidiaries, which also includes 118 production facilities and presence in more than 33 countries. Since the company rests its origin in Japanese, the highest consumption of Honda motors is in Japan and then in North America, totalling 40% of the company's revenues. Honda was founded in 1946 in Hamamatsu (Japan) and reflects the philosophy of its founder hidden in the company's slogan; The Power of Dreams, and in the innovative spirit of the company, which defines its mission as "providing products that contribute to improving the mobility of people and the welfare of society. It accentuates that Honda's products are known worldwide not only for its good quality, but also the philosophy behind them, our policy is to create things that serve the interests people.

Discussion

Theory of Price Elasticity

The elasticity of demand to price is an important concept in economics. Elasticity is an important element in determining the price that best suits the demand of a product. When the elasticity is zero, the demand when the price varies; it remains unchanged regardless of the price. This is particularly in the case of essential commodities, when the price increases, consumption remains constant since there few alternatives. In the short term, it is also true of " pre-committed expenses such as rent, insurance, subscriptions, telephone, television, internet, water supply, electricity, etc. Similarly, when the price falls, demand does not necessarily increase. Zero elasticity in the short term, however, can be nonzero in the long run, because rising prices can push in the search of new alternatives. Oil, for example, is a non-substitutable in the short term but over the long term, increasing its price can promote the exploitation of new energy sources and the purchase of cars consuming less and / or cheaper fuels. This verge has been seen by Honda and they came up with hybrid technology. The increasing price trend in terms of oil is not expected to come down, which leaves an optimistic view of Hybrid cars.

When the elasticity is high, a small change in price causes a large change in demand. This is for example the case of fashion products with sales collapse during the crisis and increase tenfold during growth. When the elasticity is positive, demand increases with price, which is paradoxical. When the price increases, the demand is also increases and known as Veblen or Demonstration effect (Brons, 25-45).

Automobile industry is usually price elastic because of the nature of product. The product line Honda offers ...