Honda Enhances Flexible Manufacturing Network in North America

Business Wire, Oct 13, 2008

-- Production of V6 Accord will begin in Alabama --

TORRANCE, Calif. -- Honda (www.honda.com) will begin production1 of V-6 Accord sedans at its Alabama auto plant while increasing production of 4-cylinder Accords in Marysville, Ohio, the company today announced. These moves are part of a series of production adjustments that Honda is making in North America and globally to meet customer demand for its lineup of fuel-efficient passenger cars and light trucks, as well as to ensure the most efficient use of its manufacturing capacity.

"We are leveraging our flexible manufacturing network to meet the needs of our customers for more fuel-efficient products," said John Mendel, executive vice president of American Honda Motor Co., Inc. "We will continue to guide our business based on strategic and careful management tied to our core values."

The latest changes in Honda's North American production strategy include:

* The majority of V-6 Accord sedan production will shift from Honda's Marysville Auto Plant in Ohio to the Honda auto plant in Lincoln, Ala. in mid-2009.

* The Marysville Auto Plant will increase its production of 4-cylinder Accord sedans in mid-2009, decreasing imports of Accord to the U.S.

* The Anna, Ohio Engine Plant, will increase production of 4-cylinder engines.

* Production of the Honda Ridgeline pickup will be moved from Canada to Alabama in early 2009 (previously announced).

Alabama Auto Plant to Begin Production of V-6 Accord Sedan

By mid-2009, the majority of V-6 Accord sedan production will shift from Honda's Marysville Auto Plant in Ohio to the Honda auto plant in Lincoln, Ala. This will be the first time the Alabama plant has produced passenger cars since it began production of the Odyssey minivan in November 2001. The Accord V-6 sedan will become the fourth model produced on the plant's two assembly lines.

The Alabama plant now produces the Odyssey minivan and Pilot sport utility vehicle. Earlier this year, Honda announced plans to transfer production of the Ridgeline truck to Alabama from its No. 2 auto plant in Canada in early 2009. Annual production capacity at the Alabama plant will remain at 300,000 vehicles and 300,000 V-6 engines.

The Alabama plant plans to further reduce light truck production through the end of the fiscal year ending March 31, 2009, to adjust output to current market conditions as well as to prepare for the launch of Accord production.

Marysville, Ohio, Auto Plant Increasing Production of 4-cylinder Accords

In conjunction with the start-up of V-6 Accord sedan production in Alabama, the Marysville Auto Plant will increase production1 of 4-cylinder Accord sedans. This will result in Honda reducing imports of 4-cylinder Accords from its Saitama Factory in Japan. The Marysville plant will continue to produce the V-6 Accord sedan and coupe, Acura TL performance sedan, and the Acura RDX luxury SUV on its two assembly lines.

Through September 2008, more than 80 percent of Honda's Accord sales in the U.S. were produced in the U.S. Following this production adjustment next year, an even higher percentage of Accords sold in the United States will be produced in Ohio and Alabama. Annual production capacity of the Marysville Auto Plant will remain at 440,000 units.

Anna, Ohio Engine Plant Increasing Production of 4-cylinder Engines

In conjunction with the transfer of V-6 Accord sedan production to Alabama, and to help meet demand for 4-cylinder engines, Honda's engine plant in Anna, Ohio, will shift some of its production capacity from V-6 to 4-cylinder engines. In Alabama, Honda will add V-6 Accord engines to its current V-6 engine production for its Odyssey and Pilot models. The Anna plant produces engines for vehicles assembled in Ohio, Indiana and Canada, and for export to Honda operations overseas. Annual capacity at Anna will remain at 1.18 million engines.

Flexible North American Production Operations

For the past decade, Honda has invested in the development of a highly flexible and efficient manufacturing network of plants in North America, enhancing its ability to quickly and efficiently respond to changes in customer demand. The addition of Accord production in Alabama will provide Honda with increased flexibility to meet the requirements of the North American market, while also ensuring more efficient use of overall production capacity. Already, Honda's East Liberty and Marysville plants in Ohio and the No. 2 plant in Canada are producing cars and light trucks on the same line.

Honda built a record 1,432,731 cars and light trucks in North America in 2007, including 1,015,462 units in the U.S. Last year, more than 76 percent of all Honda and Acura vehicles sold in America were produced in North America, the highest percentage for any international automaker. Honda purchased more than $18.8 billion in parts and materials from suppliers in North America last year.

About Honda

Honda began operations in the U.S. in 1959 with the establishment of American Honda Motor Co., Inc., Honda's first overseas subsidiary. Honda began U.S. motorcycle production in Ohio in 1979, and began U.S. automobile production in 1982 at its Marysville, Ohio, auto plant. The company has invested more than $10.6 billion in its North America operations, including 16 major manufacturing facilities employing more than 35,000 associates and producing more than 2 million products annually, including more than 1.4 million Honda and Acura automobiles as well as motorcycles, all-terrain vehicles, personal watercraft, lawn mowers, general-purpose engines, and other power equipment products. Honda currently partners with more than 650 North American suppliers and purchased more than $18.8 billion in parts and materials from North American suppliers in 2007.