How a Poor Japanese Boy Created Honda

Finance & Beyond
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In 1922, a 15-year-old boy shows up for his first day at work at a small auto-repair shop in Tokyo Japan. The owner, who questioned if the boy was even meant for this type of business, assigned him to clean the workshop and look after his child instead. At the time, nobody thought much of him, neither they cared, but only because they had no idea who this kid would eventually become.
Fast forwards a few decades, and that boy, Soichiro Honda, was now competing with some of the biggest car brands in the world, while also owning the largest motorbike manufacturer.
This is the story of how one poor Japanese boy, went from babysitting children… to building a multibillion-dollar brand, Honda Motors.
#finacialtips #finance
In 1922, a 15-year-old boy shows up for his first day at work at a small auto repair shop in Tokyo,
Japan. The owner, who questioned if the boy was even meant for this type of business,
assigned him to clean the workshop and look after his child instead. At the time, nobody thought
much of it, neither did they care, but only because they had no idea who this kid would
Fast forward a few decades, and that boy, Soichiro Honda, was now competing with some
of the biggest car brands in the world, while also owning the largest motorbike manufacturer.
This is the story of how one poor Japanese boy went from babysitting children to building the
multi-billion dollar brand, Honda Motors. The story begins in 1906 in a small poverty-ridden village
called Tenryu, Shizuoka, at the foot of Mount Fuji. It was there that Gihei Honda and his wife
welcomed their first son, Soichiro Honda. Soichiro's father was a local blacksmith from the village,
who also fixed bicycles on the side, while his mother was an accomplished weaver. Raised in
difficult economic situations, Soichiro lost five of his siblings growing up due to health issues.
When Soichiro was eight years old, he was going about his normal routine in the neighborhood,
when he heard a strange rumble that grabbed his attention. He followed the sound until he came
across a big piece of strange machinery rolling along on four wheels. This machine was a Ford
Model T, and Soichiro was left captivated by what he had just witnessed. It was the first car I saw.
What a thrill! I could not understand how it could move under its own power,
and when it had driven past me, without even thinking why, I found myself chasing it down
the road as hard as I could run. This experience left a mark in his life that would forever change
the way he would engage with machines. He learned how to wet the blades of the farm machinery and
repair bicycles. He was fascinated by all kinds of engines and motors. But Soichiro hated the
idea of going to school, and instead of pursuing a proper education, he spent the majority of his
childhood helping his father with his bicycle repair business. His lack of interest in school
affected his grades so terribly that he used some rubber that he found to forge his family's stamp
on his grade reports. That way, his father wouldn't need to sign the paper and see his grades.
Eventually, he got caught, and his father punished him by making him kneel on his knees
for an entire day without lunch. In 1922, Soichiro came across a magazine ad for a Tokyo-based
automobile servicing company called Art Shokai. He reasoned that, since the company was one of the
most popular motor car services in the city, they might be in need of new workers. So, he wrote a
letter to Art Shokai inquiring about a job, and luckily enough, he received a positive reply.
So, at the age of 15, Soichiro dropped out of school, left home, and headed for Tokyo in pursuit
of his dreams. When Soichiro got to Tokyo, he was overwhelmed to see how fast and different
city life was compared to the village he had come from. When Soichiro arrived, the shop's owner,
Yuzo Sakakibara, had a job already prepared for him. He was to babysit the owner's child.
Soichiro was disappointed to find that, over the next few months, he wasn't making any money,
and the only work tasks he was assigned was to carry a baby wrapped around on his back.
The only thing that made him stay was the shame of returning home a failure and facing his parents.
As time went by, the owner couldn't keep up with the high demand of his automobile business,
so he finally pulled Soichiro in to help him out. Even though Soichiro started out doing menial
tasks, he gradually climbed his way up until he became a trusted mechanic at the company.
His talent and dedication eventually caught the attention of the owner, who decided to take
little Soichiro under his wing and teach him not only mechanical repairs, but the business
side of the company as well. Although Sakakibara's repair work included both automobiles and bicycles,
cars were not as popular then as they are today. Not only were automobiles a luxury that only
people of the upper class could afford, but most of the automobiles around at the time were foreign
made. Through his work, Soichiro quickly became familiar with a wide range of automobiles,
including Lincolns, Mercedes, Daimlers, and even various motorcycles that were brought
in to the workshop. Soichiro poured everything he had into expanding his knowledge and understanding
of his craft. It was through this company that Soichiro was also introduced to the world of
motorsports. Around this time, motorsports were quickly gaining popularity around Europe, America,
and even Japan. And in 1923, Sakakibara himself began to build racing cars with the help of his
workers, including Soichiro. Their first model was the Art Daimler, built using a second-hand
Daimler engine, and their second model was the Curtis. The Curtis was made using another
second-hand engine from an American Curtis biplane, placed on the chassis of another American car,
the Mitchell. This car would go on to race in the 5th Japanese Motor Car Championship in 1924,
taking a stunning first position, with Sakakibara's brother as driver and Soichiro
as the accompanying engineer. It was a special experience for the 17-year-old boy,
and from then on, motorsports became his religion. In 1926, Soichiro was drafted for military service,
but didn't pass the medical exams as they revealed that he was colorblind.
Thus, he was excused from the army and was able to keep working at Art Shokai.
By 1928, Yuzo Sakakibara wanted to expand his business and decided to open a branch of Art
Shokai in Hamamatsu. He believed there was no better man to leave in charge than his young
apprentice, and at the age of 21, Soichiro was called upon to run the new branch. However,
Soichiro's repair shop struggled during the first year, largely because people didn't want to
entrust their cars with someone so new and so young. So, Soichiro had to live off the scraps
that other repair shops cast aside. Still, the young man used all the knowledge and skill he
had acquired over the years, and in time, he successfully managed to grow his business.
By the 1930s, his new shop had grown from a one-man operation to a staff of 30 people.
The branch grew at an incredible pace during the next few years, and with so much work to be done,
Soichiro had to bring his wife in to help run the company. Even though Soichiro was known as
a brilliant mechanic, he was also a prodigious racing driver, and this was another skill that
helped him stand out from his peers. Inside his shop, Soichiro had built the Hamamatsu race car,
in which he managed to set a new speed record by driving it up to 120 kilometers per hour,
a record that stood for 20 years in Japan. However, racing at the time was far more
dangerous than it is today, and in June 1936, Honda was involved in a serious crash while
racing the Hamamatsu in the suburbs of Tokyo, and almost died. Soichiro's left arm was fractured,
his shoulder was dislocated, and his face was damaged. Despite spending a couple of months
at the hospital, nursing his injuries, Soichiro returned to the racetrack only 4 months later.
His family, however, was unhappy with his return to racing, and after several arguments with his
wife and father, Soichiro never raced again. By 1936, Honda became tired and weary of his
repair work. He wanted to do more, and was planning to move on to manufacturing car parts.
He proposed turning the Art Shokai Hamamatsu branch into a separate company for this purpose,
but the shareholders of the company disagreed with him. The investors saw that the current
orders and workload from the repair shop were bringing in enough profit, and they didn't want
to take a gamble on a venture they believed was unnecessary. So, Soichiro decided to open his own
company to manufacture piston rings, and founded the Tokai Seiki Heavy Industry,
and made one of his close friends, Shichiro Kato, the president of his company.
Soichiro and Kato worked tirelessly in their new venture, and together started the Art Piston Ring
Research Center. Soichiro, in particular, was still working at his Hamamatsu branch,
spending his days at the repair workshop and his nights developing pistons. For a long time,
they struggled to make any breakthrough, and during the next couple of years, Soichiro had
worked so much that he lost a lot of weight, causing his face to look emaciated. All the
stress his body and mind were going through made him look like a completely different person.
And after a series of failures, Soichiro decided to enroll as a part-time student
at the Hamamatsu Industrial Institute to improve his knowledge of metallurgy.
It wasn't until 1939 when Soichiro would finally create a successful working piston.
Confident in his design, he quit his job at Art Shokai, handing the branch off to some of
his trainees, and proceeded to work full-time at his new company. Honda began producing pistons
day in and day out, but his creations were still flawed and nowhere near the quality they needed
to be. Toyota contacted Soichiro to make pistons for the company, and out of the 50 he submitted,
only 3 passed Toyota's standard. It was a big setback for Soichiro, but he didn't give up.
He spent the next few years traveling around Japan, visiting steelmaking companies and
universities to improve his knowledge of manufacturing piston rings. After gaining
confidence in his knowledge and experience, Soichiro gave it another try. The result was
incredible. Not only did his new pistons pass quality control, but orders also began to come
in from all over the country. So much so, that the company went on to employ around 2,000 people
just to catch up with the orders. Things were starting to look great for Soichiro and his
Japan joined the Pacific War in 1941, and Soichiro's company was placed under the
direct command and control of the Ministry of Munitions. The following year, Toyota took over
45% of the company's equity, and Soichiro was downgraded from President to the position of
Senior Managing Director. Things went from bad to worse as many male employees began to resign
as they were drafted for military service, and his company began to struggle. Soichiro did
everything he could to keep his company afloat, but he wasn't ready for what was yet to come.
In 1944, air raid sirens began to intensify in Japan, and it became very obvious that the
country was headed towards defeat. Hamamatsu was in great danger, and Soichiro's company was struck
by a direct bomb blast, destroying the factory. The company would go on to suffer a second
misfortune in January 1945, when the Nankai earthquake shook the region and the Iwata plant
collapsed. Japan eventually surrendered in August 1945, but by then, Soichiro had nearly lost
everything. After the war, Soichiro decided to sell what was left of his company to Toyota
for a sum of 450,000 yen, and publicly told everyone that he was going to take some time off
to figure out what the future would hold as Japan was left in ruins. A year after the war,
the country experienced an economic meltdown that threatened the lives of its citizens.
There was a shortage of food, clothing, and shelter, and resources were rationed. As a result,
Soichiro couldn't even find enough gas to drive his car to the market and buy food for his family.
One day, Soichiro came across a generator engine that belonged to the Japanese Imperial Army,
which was used during the war to power up a wireless radio. He was fascinated with the engine,
and after figuring out how it worked, a bright idea came to him. What would happen if he attached
this engine to a bicycle? By no means was this a new invention. The practice of clipping a motor
onto a bike was common in Europe, and a few of these had even made their way to Japan.
But Soichiro knew the country was in desperate need of cheap transportation, and so, in 1946,
Soichiro used his old warehouse to establish the Honda Technical Research Institute for the sole
purpose of figuring out a way to make motorbikes. There, he and a staff of 12 men followed through
with his idea and successfully managed to put together a motorbike using some engines he found,
along with other spare parts. These new bicycles instantly became a hit,
and orders began to come in from different parts of the country. Soon enough, Soichiro was running
out of used engines, so he decided to design and develop one of his own. In 1947, he finished the
Type A engine, and for the very first time, the Honda name was emblazoned on a machine.
Soichiro founded the Honda Motor Company in 1948 with the initial goal of building motorcycles
to help get Japanese workers around. The only problem was, Soichiro needed more money to expand
his production. So, he wrote an open letter to all 18,000 bicycle shop owners in Japan,
telling them that he had thought of a solution to get Japan moving again.
Out of the 18,000 stores he wrote, he received positive responses from 3,000 of them,
and they provided him with the money he needed to start making his first shipments. A year later,
the company produced its very first complete motorcycle, the Model D. Even though the Model D
was a big achievement for Honda, it was too big and heavy, and because of this, only a few people
bought the motorcycle. Soichiro wasn't satisfied with this, so he stripped down the motorbike and
worked long hours to make another bike that was smaller and lighter. After three years of trial
and error, he succeeded in building another motorcycle and named it the Super Cub. The
Super Cub was an instant hit and became so successful that it won the Emperor's Prize.
Honda also joined efforts with investor Takio Fujisawa, who provided the capital he needed
as well as financial and marketing strategies. This partnership became the foundation upon which
the Honda Motor Company was built on. The Super Cub reached the United States in 1958 with a
sticker price of just $295, which was a quarter of the price of what other American motorcycles cost,
and thanks to the company's marketing and engineering skills, it soon outsold both Triumph
and Harley-Davidson in their respective home markets. But by then, Soichiro had also expanded
his motorcycle brand into the racing world. Racing at the time was more than a sport. It was
the biggest platform for these manufacturing companies to showcase their cars and motorbikes
to the rest of the world. So he traveled all over the world to see the races, studying and examining
all the motorcycles of his competitors. In fact, throughout his career on the track, whenever a
benchmark was set by one of his competitors, Honda would take this information home and strive to
It was this attitude that took Honda Motorcycles from an awful and disappointing finish at their
first international race in 1954 to the Manufacturer's Team Prize at the 1959
Isle of Man TT, the biggest motorcycle race in the world. Two years later, Honda would win again
at the Isle of Man TT, and his success on the racetrack put the Honda name on the map. By the
After the release of the Honda Dream in 1949, they had produced a total of 10 million motorcycles
by 1968. However, becoming the biggest motorcycle company wasn't enough for Soichiro. There was
another big dream he'd been chasing since he was 8 years old, and it was none other than entering
the car-making industry. When Soichiro announced he was going into the automobile market,
many people warned him that it was too risky for the company and that he was better off just making
motorcycles. Around this time, Japan had Nissan, Toyota, and a few other companies who were
competing in the tough world of the automobile market, and Japanese officials tried to convince
Soichiro that the country didn't need another car manufacturer. But Soichiro didn't listen to
their arguments. Honda debuted its first automobile in 1963 with the release of the
T-360 minitruck, a small but reliable pickup truck. Unfortunately, the minitruck never gained
much traction, and it was soon followed with the company's first ever sports car, the S500.
This S500 was a two-door roadster with a four-speed transmission, capable of reaching
80 miles per hour. It was a smaller car, but it was smooth and easy to drive. But sadly,
only around 1,300 cars of this model were built, making it one of the rarest Honda cars ever made.
But just like Soichiro did with his motorcycles, Honda brought its cars into the racing world.
The Honda RA271 made its Formula 1 debut at the 1964 Belgian Grand Prix. It only took one year
for Honda to achieve a first-place victory at the 1965 Mexican Grand Prix with their new
successor, the RA272. But despite its early success on the racetrack, Honda was nowhere
near beating its competitors in the car market. So they took a break from racing and turned their
attention to building one of the most successful cars in the automobile market, the Honda Civic.
Honda debuted their new model in 1972, and in the following years, it became one of the most
popular cars in the world. One of the reasons for its success, especially in European and American
markets, was due to the oil crisis of the 1970s. During this period, shortages of fuel spread all
over the world. And to tackle this, Soichiro devised a brand new method for fuel management,
called the Compound Vortex Controlled Combustion, or CVCC for short. This allowed people to travel
further distances with their car without burning too much fuel. The Honda Civic also tackled the
pollution problem caused by exhaust gases by adding a catalytic converter to its vehicles,
something that other big automakers didn't consider as much at the time. And just like that,
Honda was rapidly becoming popular in the automobile market. Even though Americans
might have bought the Civic out of necessity, it was the Honda Accord that really changed the game.
Initially, the Honda Accord debuted as a compact hatchback, but it later expanded to sedans.
This new model contained the same fuel-efficient feature as the Civic,
but with a better moderate size. And thanks to their wider interior space and comfort,
the Honda Accord would later become one of the best-selling sedans in the automotive history.
At the beginning of the 80s, the Honda Motor Company was the third largest producer of cars
in Japan. And by the end of the decade, it was the third biggest car company on the planet.
Soichiro Honda retired from the company in 1973 and later died on the 5th of August, 1991.
Looking back on my work, I feel that I was doing nothing more than mistakes, blunders,
and serious omissions. But I am proud of the achievements. Although I did one mistake
after another, my mistakes and failures never occurred for the same reasons.
Honda has now expanded into multiple industries, including jets, boat engines, power equipment,
and robots, to name a few. Thank you all for watching.
Make sure to subscribe and like the video. Until then, I'll see you in the next one.
