Honda is the largest motorcycle manufacturer in Japan and has been since it started production in 1955. At its peak in 1982, Honda manufactured almost 3 million motorcycles annually. By 2006 this figure had reduced to around 550,000 but was still higher than its three domestic competitors.

    During the 1960s, when it was a small manufacturer, Honda broke out of the Japanese motorcycle market and began exporting to the U.S. Taking Honda’s story as an archetype of the smaller manufacturer entering a new market already occupied by highly dominant competitors, the story of their market entry, and their subsequent huge success in the U.S. and around the world, has been the subject of some academic controversy. Competing explanations have been advanced to explain Honda’s strategy and the reasons for their success.

    The first of these explanations was put forward when, in 1975, Boston Consulting Group (BCG) was commissioned by the UK government to write a report explaining why and how the British motorcycle industry had been out-competed by its Japanese competitors. The report concluded that the Japanese firms, including Honda, had sought a very high scale of production (they had made a large number of motorbikes) in order to benefit from economies of scale and learning curve effects. It blamed the decline of the British motorcycle industry on the failure of British managers to invest enough in their businesses to profit from economies of scale and scope.

    The second explanation was offered in 1984 by Richard Pascale, who had interviewed the Honda executives responsible for the firm’s entry into the U.S. market. As opposed to the tightly focused strategy of low cost and high scale that BCG accredited to Honda, Pascale found that their entry into the U.S. market was a story of “miscalculation, serendipity, and organizational learning” – in other words, Honda’s success was due to the adaptability and hard work of its staff, rather than any long term strategy. For example, Honda’s initial plan on entering the U.S. was to compete in large motorcycles, around 300 cc. It was only when the team found that the scooters they were using to get themselves around their U.S. base of San Francisco attracted positive interest from consumers that they came up with the idea of selling the Super Cub.

    The most recent school of thought on Honda’s strategy was put forward by Gary Hamel and C. K. Prahalad in 1989. Creating the concept of core competencies with Honda as an example, they argued that Honda’s success was due to its focus on leadership in the technology of internal combustion engines. For example, the high power-to-weight ratio engines Honda produced for its racing bikes provided technology and expertise which was transferable into mopeds. Honda's entry into the U.S. motorcycle market during the 1960s is used as a case study for teaching introductory strategy at business schools worldwide.

    Honda Racing Corporation (HRC) was formed in 1982. The company combines participation in motorcycle races throughout the world with the development of high potential racing machines. Its racing activities are an important source for the creation of leading edge technologies used in the development of Honda motorcycles. HRC also contributes to the advancement of motorcycle sports through a range of activities that include sales of production racing motorcycles, support for satellite teams, and rider education programs.

    Soichiro Honda, being a race driver himself, could not stay out of international motorsport. In 1959, Honda entered five motorcycles into the Isle of Man TT race, the most prestigious motorcycle race in the world. While always having powerful engines, it took until 1961 for Honda to tune their chassis well enough to allow Mike Hailwood to claim their first Grand Prix victories in the 125 and 250 cc classes. Hailwood would later pick up their first Senior TT wins in 1966 and 1967. Honda's race bikes were known for their "sleek & stylish design" and exotic engine configurations, such as the 5-cylinder, 22,000 rpm, 125 cc bike and their 6-cylinder 250 cc and 297 cc bikes.

    In 1979, Honda returned to Grand Prix motorcycle racing with the monocoque-framed, four-stroke NR500. The FIM rules limited engines to four cylinders, so the NR500 featured non-circular, 'race-track', cylinders, each with 8 valves and two connecting rods, in order to provide sufficient valve area to compete with the dominant two-stroke racers. Unfortunately, it seemed Honda tried to accomplish too much at one time and the experiment failed. For the 1982 season, Honda debuted their first two-stroke race bike, the NS500 and in 1983, Honda won their first 500 cc Grand Prix World Championship with Freddie Spencer. Since then, Honda has become a dominant marque in motorcycle Grand Prix racing, winning a plethora of top level titles with riders such as Mick Doohan and Valentino Rossi.

    In the Motocross World Championship, Honda has claimed six world championships. In the World Enduro Championship, Honda has captured eight titles, most recently with Stefan Merriman in 2003 and with Mika Ahola from 2007 to 2010. In observed trials, Honda has claimed three world championships with Belgian rider Eddy Lejeune.