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May 23, 2014

Marc Sours

T.E. McHALE:  Our guest this morning is Marc Sours, who is the manager of the commercial division at Honda Performance Development.  We're going to take a little bit of time today to step away from the IndyCar program and talk a little bit more globally about the scope of Honda's activities in motorsports, specifically HPD's involvement in a variety of motorsports disciplines outside the IndyCar Series. 
Marc is more qualified than most to speak to that because he's been with HPD since 1994, served as a track-side engineer on the IndyCar program, including championship seasons with Alex Zanardi in 1988 and Gil de Ferran in 2001. 
He served as HPD's general manager from 2010 to 2012.  He was really, for purposes of today's discussion, the project leader of the activity that moved HPD into what we call the Grassroots Motorsports Initiative which made more of an attempt and more of a commitment to reach out to our customers on the racing side at the lower levels, so-called grass-roots levels, of the sport. 
So, Marc, for openers, talk about how you've seen HPD evolve in that role from 1994. 
MARC SOURS:  It's actually been quite a journey to work there.  I started very early.  At the time that I began, there were seven English-speaking people at HPD and about 30 Japanese people that would come in and move out in phases depending on the projects at the time.  All the announcements made on the PA system at that time were in Japanese and translated by our Japanese counterparts who happened to be standing near us at the time. 
At this moment we have 150 English-speaking people working there now.  All the announcements are in English.  We're in a building that's three times the size of what the facility we were working in back in 1994.  It's been quite amazing. 
It's changed frequently.  The programs we've been working on have morphed in their own right but then expanded.  It's never ceasing.  It's never the same.  That's part of the reason that I've stayed there so long.  It's fantastic. 
T.E. McHALE:  So with specific regard to the grass-roots Motorsports Initiative, without getting into too much of the mundane details of how all that plays out, I was a part of that process and know that it took the better part of a year and a half from the first meeting until the execution of the actual strategy and plan going forward. 
It might be helpful to our guests to walk through from a Honda standpoint what all is involved in an initiative like that. 
MARC SOURS:  Although they're all called Honda, I think at one point in time I was told there were 15 different companies in North America that function as Honda.  In order to have a broad, successful business platform that incorporates the elements, the perspectives and the experiences to make sure you're successful, you want to draw upon all those viewpoints in order to make sure you considered everything, planned everything well. 
The plan that T.E. spoke of that I led were involved from Honda R&D, people from regulatory, people from the sales functions, the factory functions.  We really studied what it is the consumer wants, specifically the motorsports consumer, and what is it uniquely that Honda can offer them that will fulfill their motorsports passions, which executives challenge us to do. 
It was a wide variety of study and a lot of different meetings and discussions, a lot of executive involvement to get their perspectives and their experiences on Honda and what they understood the consumers were asking them for in their market niches.  It's come together and expanded since it was approved in 2009 and grown considerably over the last five years. 
An example of that is we've been doing these motorsports overview documents that some of you have now since 2009.  I think the first one was a page and a half.  As you can see, it's quite a tome at the moment and that expands and showcases the expansion of things we're offering to the motorsports markets and consumers. 
T.E. McHALE:  The essential message behind that is serving the passions of our customers, the opportunity to do that in a lot of ways, however that looks.  The fundamental goal here is to be responsive to the customers who are most passionate about our product. 
MARC SOURS:  Mr. Honda, I was told, created the Suzuka Formula One circuit before he ever sold a road car.  He believed that racing was important to him.  It was his passion, but it also could be important to the company he was working to establish. 
I was reminded recently anecdotally that in the mid '60s Honda R&D was basically divided up.  60% of the associates that worked on it worked on the Formula One program and the other 40% were actually working on consumer products.  So racing is ingrained in the company.  We say it's in our DNA in a way that we think is unique. 
Mr. Honda believed that racing taught individual associates the need for time-certain schedules, improved their problem-solving skills, and also worked to improve their ability to analyze technical issues. 
More broadly, a company that's working in racing he believed would improve its ability to offer technical solutions that would be turned into something for the consumers. 
These elements are inherent in the Honda brand.  People look to us because of those brand characteristics.  So HPD has an opportunity to meet the needs of its motorsports consumers, to meet the consumer's demands for motorsports products that other Honda companies tried to do but couldn't do because they weren't racing-focused.  It's really grown organically from that desire and those characteristics. 
T.E. McHALE:  We'll open it up to questions. 

Q.  How independent are your decisions?  Are there any ideas or proposals which are coming from headquarters in Japan or you're totally independent what kind of championship you can run?  How independent is HPD as an entity regarding its decisions and how much comes from Japan regarding racing activities? 
MARC SOURS:  HPD is a wholly owned subsidiary of American Honda.  American Honda is charged with handling projects in North America, America specifically.  We work in lockstep with them.  They're aligned with Japan and Japan's global strategy.  We're working with our subsidiary and our partner rather than Japan itself. 

Q.  Any regrets that you don't have the complete IndyCar ladder system? 
MARC SOURS:  We're not trying to own racing.  We don't believe that racing is about Honda.  We're trying to participate in racing and to offer a good, cost-effective, durable product for those that want to go racing in their local communities. 
We believe we're a large part of the IndyCar paddock, but we're a part of it, it's not all about us.  We have engine products that run the gamut of the ladder from shifter carts, (indiscernible) horsepower engines, obviously all the way up to the IndyCars that are going to run on Sunday.  No matter where you are on that ladder, there's a Honda product that we believe will be a good value for you and will offer you fun. 
The Road to Indy has been successful.  We think that's good for IndyCar racing.  We're pleased that they have a program like that. 

Q.  How much of your grassroots focus is on trying to Americanize Honda?
MARC SOURS:  With Honda's manufacturing base in Ohio and around the country, with its R&D facilities, the largest one is in Ohio, there's also one in L.A., its sales network, it didn't occur to us that we had to Americanize Honda.  We believe Honda is already an American company with many, many, many Honda American associates. 
It happens that we are in America.  Our consumers are Americans for the most part.  So we're selling our products to Americans.  But it wasn't a goal, it was on an imaging perspective.  It was more because just that's what we do and we've got good products to offer them. 

Q.  What are the plans for the NSX? 
MARC SOURS:  Part of the basis, part of the goals for NSX is competition.  It's being built with that in mind.  Competition will be used to create the vehicle, to develop the vehicle.  HPD expects to be part of that. 

Q.  Is there a thought or idea at this point to take the American Grassroots Initiative more global and place it in Europe, Japan, et cetera? 
MARC SOURS:  Honda has regional focuses.  I explained American Honda and HPD's focus is on the American region, the North American region.  Those are the consumers we want to help and support, and the products that we develop are more focused on those sanctioning bodies, those classes of racing, midgets being one of them. 
That being said, HPD does offer products internationally.  Our sports car engines have been running in the FIA Championships, the WEC.  We've provided engines to the GT300 CRZs that ran in Japan last year.  The Honda racing line is available to Canadians.  They actively participate.  We support product and teams in the Canadian Touring Car Championship, in addition to all the series that we support in America. 
We have global participation, but it's always been the guise of what corporate Honda needs in those territories and the Honda companies that are governing those territories, such as Honda Motor Europe or Honda Canada. 

Q.  Maybe you could take a moment and explain what the Honda racing line is. 
MARC SOURS:  Sure.  For people that are racing Hondas, if you have a competitive license and you are active, you can join the Honda Racing Line Program.  That gives you direct access to HPD, our technical support, and the ability to purchase motorsports parts and components through the website for direct delivery to your door. 
The program was initiated in the summer of 2009 and has expanded at this point to approximately 1300 participants.  It's another way that we can connect directly with the motorsports consumer. 

Q.  The debut of the Acura TLX GT in the Pirelli World Challenge in Detroit, what can you speak to regarding the development of that car, what to look for going forward? 
MARC SOURS:  GT will be the pinnacle of Acura Motorsports and of course the backbone of the program is the launching of that platform.  We've been working on the program with RealTime Racing for seven, eight months at this point.  We're excited about it. 
The car is I think going to be amazing.  Our engineers have been actively participating in developing, our fabrication group has been supporting RealTime, as well.  We have a team of people that will be involved directly with RealTime throughout the development of the program. 
It's just another expansion of what HPD has been doing and what American Honda has been doing in motorsports through Acura. 

Q.  The level of cooperation between HPD and its counterparts in Europe, and the revival of the Formula Atlantic Series, can you talk about that. 
MARC SOURS:  First, with Europe.  HPD has had customers in Europe leasing our HR 2.8 TT engine for the last couple of years.  It's by design very focused on a unique set of customers.  The cars are elegant.  The ARX cars that we've been developing with our partners going back to the mid 2000s, 2006, 2007, are sophisticated cars. 
The engines are developed in-house.  At this point we initially made the first one with our partner Honda R&D in Ohio.  They're production-based.  That is something we at HPD are proud of.  It's something Honda can be proud of. 
The rules for LMP2 were established to try to bring the costs of sports car racing, particularly prototype sports car racing, down.  Honda was first successful in developing an engine developed on this rules platform.  Currently we're competing in the United States with two manifestations, one is a 2.8, the other is a 3.5 for DP racing.  The building materials is approximately 450 parts.  55% of those are OE parts.  It's a large part production engine.  I think it says a lot about the capability, the durability of what Honda produces. 
Regarding Atlantics, before I was a Honda associate, I was an Atlantic mechanic when it was the series in the late '80s.  Really when you're an aspiring driver or mechanic, it's really the first bespoke complicated class of open-wheel car. 
HPD offers a version of the 2.0 liter Honda engine which we've designed a mechanical throttle around which makes it legal for the Atlantic class of car. 
Specifically the series has been started by a group, a consortium, called GRW.  In 2011 they had a trial series to revive a Pro Atlantic Championship.  They had three events, two races per event.  We were intrigued by what they were trying to achieve. 
They went on hiatus last year to think about what they learned.  They launched the championship vigorously this year.  It is now five events, so a 10-race series over the course of the season.  I think they had race number two.  The next one I think is July 4th, if I'm not mistaken.  HPD has signed a two-year sponsorship commitment to that series.  We're looking forward to being a part of it. 
We expect that we'll have our engines fitted into Swift chassis, working with Swan Motorsports to do the first one.  We're really pleased with it.  It's going to be a lot of fun. 

Q.  (No microphone.)
MARC SOURS:  It's an HPD I'm going to say product.  We believe it's going to make the sport more unique.  It will make the cars I think very identifiable.  We've been working hard to get our designs going.  We're in the final phase, if you will, of establishing those components and developing them. 

Q.  Aero tested here in the States? 
MARC SOURS:  We will.  We will. 

Q.  When will we see the aero package? 
MARC SOURS:  In the fall.  I'm expecting a launch date like the end of September.  Of course, it's something that we hope to find a competitive advantage, so it's not something we're going to roll out until we have to.  We're trying to keep it under wraps at the moment. 
T.E. McHALE:  With that we will close.  We thank you all for joining us this morning for this media briefing.  Appreciate your being here. 

FastScripts Transcript by ASAP Sports

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