Honda 2008 Mid-Year CEO Speech — 3 New Honda Hybrids Coming Soon!

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Honda New Mid Concept

Honda 2008 Mid-Year CEO — 3 New Honda Hybrids Soon!

Honda Chairman Fukui and Honda CR-Z Concept at Tokyo Motor 07

TOKYO, Japan, May 21, 2008 A new 3-year mid-term plan in April of this year. The idea for this 3-year is to establish a corporate structure to sustain our strengths and that enable us to grow globally in the and begin such efforts under the leadership of our operations in

Two concrete directions are set as followings;

1. To world-leading environmental technologies, them to life as products, and them to more customers. 2. To a significant advancement toward the generation of manufacturing systems will enable Honda to such advanced products.

will play a central The goal of our efforts will be to technologies and products in Japan, put Honda at the forefront in the area of and evolve them from to the world along with the of our manufacturing systems and capabilities.

this end, various will be taken with a on the following three core

1. Strengthening motorcycle business 2. of automobile manufacturing in Japan 3. strategy to achieve full-scale penetration

1. Strengthening motorcycle

[Importance of motorcycle business / anniversary of Super Cub]

began its business with entered into the global with motorcycles, and established a foundation which later Honda to enter into the business.

Motorcycle business is the force of Honda’s growth and and it is one of the key strengths of Honda that automakers do not have.

Honda sells more than 13 motorcycles annually including which provide an essential of transportation for people in their lives as well as recreational motorcycles which provide the joy of

Among such Honda products, the Super Cub model represents Honda is celebrating its anniversary this year.

The Super Cub has maintained its original concept and basic style, but has advanced as a model that the needs and preferences of people in areas around the world. As a the Cub series achieved cumulative production of 60 million units (as of the end of 2008).

Demand for motorcycles as a of transportation is expected to continue to mainly in Asian and South nations. In addition, considering the high price of crude there is a good chance motorcycles will be considered not in developing countries but on a global

Honda will create products which reflect the characteristics of Honda and exceed the of customers while striving to another model which a new motorcycle category and market as did the Cub.

[Strengthening motorcycle

Toward this end, it is to strengthen motorcycle production. The new plant at Honda’s Kumamoto which began operating in 2008, will play a key

The goals of the transfer of motorcycle from Hamamatsu, the birthplace of to Kumamoto are; 1) to improve by consolidating production and 2) to strengthen ability to build motorcycle which offer new value even higher quality.

Honda will thoroughly its manufacturing operations at the starting in Japan, dramatically enhance its and leverage this enhanced to further grow and advance its motorcycle business.

Production at the new plant at Kumamoto Factory reach its full-capacity in the first of 2009.

In order to efficiently approximately 60 models, from to large-size motorcycles, Honda and built from scratch efficient and ideal production to accommodate the unique characteristics of model.

In addition to employing state-of-the-art equipment, reducing the of production processes and increased are used for mass production The new plant will produce on three main lines achieve a high level of resource efficiency and high The new plant also has 15 cell where high value products are assembled completely by a team of associates.

These lines make it possible to a product with enhanced and quality. At the same time, a line has a significant benefit in the of human resource development as it is for the advancement of associates’ skills and of production know-how.

Through initiatives, including a 20% improvement in efficiency compared to the existing Honda will strive to a strong motorcycle production which will remain competitive even if the exchange of the Japanese yen to the U.S. dollar is in the

The new plant also is an environmentally-responsible which reduces CO2 emissions by 20% compared to the existing plant various efforts including of natural energy.

As the leader plant within global motorcycle production and as a source of Honda’s strength to products that will the expectations of our customers around the Kumamoto Factory will be a force of motorcycle business in the future.

[Strengthening technological and attributes]

In the area of environmental installation of PGM-FI (Honda’s Fuel Injection) on all scooters in Japan is now virtually completed, and will be installed on to all Honda sold in Thailand by the end of 2009. plans to install PGM-FI on of its motorcycles worldwide by the end of 2010.

In the of safety technology, Honda install a motorcycle airbag and ABS (Antilock Brake System) on products. Honda plans to ABS in all 250cc or larger class worldwide, except off-road by the end of 2010.

In advancing nations, will introduce a new model, in the popular 100cc class, achieves high fuel high performance, and low cost. of this new model will first in Thailand in summer and then in other Asian

In advanced nations, Honda introduce its innovative environmental and technologies including a Variable Management (VCM) system for which significantly improves efficiency as well as electronically-controlled ABS (C-ABS), an advanced brake which further improves while braking. Moreover, will improve the product of medium-to-large size models and those aspects of a product contribute to the joy of riding.

Motorcycle RD also be strengthened with a and passion to create the Super Cub of the generation.

2. Innovation of automobile in Japan

[The thinking manufacturing reform in Japan]

In to the new motorcycle plant in Kumamoto, next generation production will begin operation in over the next three including Hamamatsu Factory will undergo renovation, Industry’s new mini-vehicle production Honda’s new engine plant in and the new auto plant in Yorii.

In outside of Japan, a new auto in Indiana, in the U.S. a new engine in Canada, and a second auto in Thailand will begin in the latter half of 2008.

has been promoting the autonomy of operations in order to enhance satisfaction in each region and to business efficiency. However, in to further strengthen Honda’s and product attractiveness, it is necessary, as in the of motorcycle business, to have a Japan operation which further refine and advance technologies in Japan and evolve technologies to regions outside of

In the early 2000s, Honda at Suzuka Factory and Sayama a flexible production system is capable of producing multiple models based on market This system was evolved to outside of Japan, and Honda a global production system is complementary among various

As a result of this introduction of the New System under the leadership of Honda became capable of production on a global level accommodates changes in market

In order for Honda to continue high quality and highly products to customers around the and to sustain its advancement and growth in the new innovation of manufacturing is necessary. realizes that the time has again for Japan to take the and take on new challenges.

The purpose of series of manufacturing reforms is to Honda’s manufacturing technologies and with a customer focus so Honda can continue creating which satisfy customers than before. Toward end, Honda will its manufacturing system by reorganizing its operations in Japan and by refining New Value Creation.

One of the key roles operations in Japan will is to evolve the results of the reform to the other Honda operations of Japan.

Yachiyo Industry build a new mini-vehicle plant on adjacent to its Yokkaichi Factory. the new plant becomes operational, Kumamoto Factory will the production of mini-vehicle engines to the new This will enable the to establish a highly efficient system which is capable of production of mini-vehicles including the and the complete automobile.

The purpose is to reform Honda’s mini-vehicle by strengthening the link between and production. In order to respond to demand for mini-vehicles in Japan, will not only strengthen of its mini-vehicle products but also advance the mini-vehicle production

Honda is not looking just at business in Japan. Completing the reform and improving cost in the mini-vehicle market, where pressures and customer expectations are severe, will enable to gain a significant strength in with intensifying global in the future.

[Engine plant in Ogawa and plant in Yorii]

The new engine in Ogawa, which will operational in the first half of and the new auto plant in Yorii, will become operational in will play a central in this manufacturing reform.

goal with these is to advance them as next-generation plants and enable their to lead to Honda’s growth on a scale.

The new engine plant in will be responsible for the production of the high-performance environmentally-responsible engines require highly advanced technologies. At this plant, plans to flexibly produce engines which require production processes, including engines, diesel engines, 4-cylinder engines, and V-type

The Yorii plant will, as a in the area of the environment, strive to a next-generation auto plant pursues energy efficiency and new values at the same time.

various initiatives including the of a state-of-the-art system which controls the amount of energy for production and the recycling of energy, the plant will strive to an environmentally-responsible and advanced auto which reduces the amount of used to produce each by more than 30% compared to at the exiting Sayama plant.

For the process, a universal design is to achieve a people-friendly line.

Honda will establish a manufacturing system capable of each individual component to a vehicle and to a customer in order to improve product quality and satisfaction.

Honda New Mid Concept

At the Yorii plant, in to improving workforce efficiency by efficiency in the area of logistics be largely improved by establishing Control Center. Through efforts, Honda will improve its competitiveness.

Striving to these next-generation plants will become a leader for Honda manufacturing operations the world, Honda plans to a total of approximately 158 billion yen for and Yorii plants.

3. Hybrid to achieve full-scale market

Reduction of CO2 emissions is a means to the environment on a global scale. CO2 reduction as one of the most important challenges, Honda became the automaker to announce global CO2 targets for 2010 for both its and production activities and is making in various areas.

There are ways to reduce CO2. Honda believes that, in the area, the advancement of hybrid is the most practical and effective at this time.

It is important to move hybrid from the current image-oriented to the new stage toward full-scale

To accomplish this goal, is making an all-out effort to a new dedicated hybrid vehicle.

on the belief that a hybrid made by Honda must and please customers by offering new as an automobile, the new dedicated hybrid largely improved attractiveness as a car in to its environmental performance.

With a and compact 5-door/5-passenger size and an design that employs the of the FCX Clarity, this vehicle achieve unique and highly characteristics as a dedicated hybrid

For its hybrid system, a compact, and highly-efficient IMA (Integrated Motor system was developed with the of providing motor assist it is necessary during startup and while relying on the engine as the power source.

Through a developed platform which the control unit and battery the cargo space, this new hybrid vehicle achieves and comfortable driving. It is nearing development as a vehicle that a new world of driving that is not by a conventional gasoline-powered vehicle.

technologies, including a function to more fuel efficient are being installed to achieve a improvement of practical fuel so that customers can actually the excellent fuel efficiency of vehicle.

Moreover, in addition to reduction, significant cost was achieved through various including making key components of the such as the control unit and more compact, creating a motor, and further advancing the and processes used to produce the

For example, a new motor production will be added at Suzuka and per-hour production capacity of line will be more doubled compared to the existing by increasing the speed of each and increasing the ratio of automation.

new motor production line become operational at the end of 2008. annual production capacity be expanded to 250,000 units 70,000 units from the line. Further expansion of capacity is possible to accommodate growth in the future.

Through comprehensive approach, an even affordable price will be so that this hybrid will be chosen rationally by customers based on its economic

At the same time, this make it possible to establish a structure for the success of hybrid business.

Honda’s new dedicated vehicle will go on sale in North America, and Europe in 2009 with expected global sales of 200,000

Honda will expand sales in the small class by a new sporty hybrid based on the Civic Hybrid, and the addition of a Fit model.

Combined annual of these four hybrid is expected to reach approximately units.

[Next generation cell vehicle: FCX Clarity]

A cell vehicle, which no CO2 and uses no fossil fuel, in operation is an essential technology for the and Honda is making steady toward market penetration of cell vehicles.

FCX Clarity is a next-generation fuel cell which is, designed from as a fuel cell vehicle.

sales of FCX Clarity will in the U.S. in July 2008 and in in fall 2008.

In the U.S. and combined, Honda expects to several dozen FCX Clarity per year to reach a total of 200 units in the first three

Honda is planning to provide FCX for the Hokkaido Toyako Summit, advanced environmental technologies be showcased.

Strengthening motorcycle which is one of Honda’s key strengths; of manufacturing in Japan, which is a of Honda’s competitiveness; and the hybrid toward full-market penetration empower Honda to continue products and joys which customers’ expectations and to grow in the future.

During this Mid-term business plan, will make steady mostly through the leadership of our operations.

Finally, on May 29, 2008, will introduce an all-new Freed, to the Japanese market. this vehicle Honda to accelerate its sales in Japan, the all-new Fit, and strives to the domestic automobile market in

Honda New Mid Concept
Honda New Mid Concept
Honda New Mid Concept
Honda New Mid Concept
Honda New Mid Concept

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