The Dream E-Type was Honda’s first 4-stroke machine. The Japanese motorcycle industry had become more competitive about a year before, and bikes with 4-stroke engines were produced for the first time. The market started to show preference for 4-stroke rather than 2-stroke bikes.
Later, Honda came to be known as "4-stroke Honda" although in fact it was rather slow in switching to the new type of engine. But at this time a lot of 4-stroke engines were fitted with side-valves for reasons of economy and ease of manufacture, while Honda opted for the overhead valve (OHV) system. Another difference was that Honda’s bikes, both 2-stroke and 4-stroke, were much more powerful than other Japanese machines with 150 cc engines.
"The Old Man probably wanted to make proper 4-stroke bikes from the very beginning. In those days people’s ideas about 2-stroke engines were rather hazy and since they burn up lubricating oil, which isn’t meant to be burnt, the Old Man probably only tolerated them as a kind of stop-gap at a time when he had no money and inadequate facility, " said Kawashima. "For two decades after the launch in the following year of Cub F-Type (a 2-stroke machine), Honda made only 4-stroke bikes. The E-Type was the first bike the Old Man really enjoyed making."
The frame of the E-Type, like that of the D-Type, was of channel-frame construction, but because there had been so much trouble with the failure of the wet-cone clutch on the D-Type, the E-Type was fitted instead with a dry-type multiple disc clutch. The clutch control was also changed to the more conventional left-hand lever system.
Kawashima recalls, "On reflection, we realized we had made a mistake in being too unique and we decided to make our bikes more conventional. But since it’s not Honda’s way to revert to old designs, we decided that the point of difference should be the quality of the engine. These were extraordinary bikes in the best sense. They sold well and brought pleasure to both customers and dealers."
The E-Type went on sale in October 1951. Compared to the D-Type, which had shipped 160 units per month at its peak, the E-Type was already shipping 500 units a month only half a year after its launch and a year later, when it was fitted with a third gear, this rose to 2, 000; three years later annual production reached 32, 000 units. Now that Honda had overcome the critical problems of its early years, the company would, as Mr. Honda himself had predicted, start to expand thanks to the success of the E-Type, and seize the opportunity for rapid future development.
In September 1951 Honda published its first company magazine, Honda Monthly, and in December, Soichiro Honda used the pages of this publication to explain the basic corporate concept of the "Three Joys" for the first time.