Honda Announces Future Motorcycle Business Plan in Asia Oceania Region

JCN Newswires, Sept 30, 2005

Tokyo, Japan, Sept 29, 2005 - (JCN Newswire) - Honda Motor Co., Ltd., today announced future plans for its motorcycle business in the Asia Oceania region. Honda sold 8million motorcycles in the Asia Oceania region last fiscal year, an important market accounting for approximately 70% of Honda's global motorcycle sales. Honda aims to achieve annual sales of approximately 12 million units in this region by the fiscal year ending March 31, 2008. Toward this end, Honda is committed to passing the joy of mobility on to the next generation, and to proactive adoption of environmental and safety technologies that enhance safety. In addition, Honda will further strengthen its activities to promote traffic safety with its dealers and through other opportunities.

Expansion of Production Capacity

The motorcycle market in the Asia Oceania region is growing rapidly consistent with economic growth in the region. Honda will expand production capacity in each country to continue to meet growing demand for motorcycles. Honda's annual motorcycle production capacity in Asia Oceania reached 8 million units in 2004, and will be expanded to 14 million units by 2007.

Key plans for motorcycle production capacity expansion:

- Indonesia: a third plant with annual capacity of 1 million units will begin operation this month.

- Philippines: a new plant with annual capacity of 500,000 units will become operational in April 2006.

- Pakistan: a new plant with annual capacity of 500,000 units will become operational in April 2006.

- India: a third plant of Hero Honda Motors Ltd. is expected to become operational in 2006.

The total investment for the expansion of motorcycle production capacity in the Asia Oceania region by 2006 is expected to be approximately 30 billion yen.

Strengthening Local Development

At the end of 2004, Honda R&D Southeast Asia Co., Ltd., Honda's motorcycle research & development center in Thailand, was moved to a new office building adjacent to a test course, and various new functions including development of mockup models, design development and testing of prototype motorcycles were added to existing functions such as market research, designing, and sketching. In order to more quickly develop products that meet the needs of customers in the rapidly changing ASEAN market, Honda will further strengthen collaboration among its R&D facilities in the region.

Expanding Product Lineup

Honda is planning to introduce an all-new commuter model in ASEAN markets starting from Thailand beginning of 2006, which will be equipped with a compact water-cooled engine designed especially for Asian markets and an automatic transmission. Local Honda research centers will develop and introduce derivative models based on this platform, which is tentatively named the ASEAN New Commuter (ANC). Moreover, Honda plans to introduce a family type model tentatively named the ASEAN New Family (ANF) equipped with a super-low-friction engine which is currently being developed to improve fuel economy by 13% compared to the level of 2005. Further in the future, Honda plans to introduce a more casual, and easy-to-ride commuter model to cultivate new market demand.

Strengthening Dealer Networks

Honda will continue to provide customers in each country with an environment in which they can purchase and use Honda products with confidence. In Thailand, for example, the used (second hand) motorcycle business will be strengthened in order to establish a system through which pre-owned models are promoted to potential motorcycle owners and upgrading by existing owners is encouraged. Honda will establish a comprehensive support system which provides the existing 4S (Sales, Service, Spare parts, and Safety) as well as the other S - for "Second Hand (used)" business. In Indonesia, Honda will establish a network of 4,000 dealers and service shops to strengthen sales and after sales service to better serve customers in an ever growing market.

Environmental Initiatives

Honda is committed to proactively install environmental technologies on Honda motorcycle products being sold in the growing market of Asia. In Thailand, in 2003, Honda introduced the first model equipped with an electronic fuel injection system, PGM-FI (Honda Programmed Fuel Injection), which achieves improved fuel economy and cleaner emissions as well as excellent start-up capabilities. By 2007, Honda plans to introduce a total of ten PGM-FI equipped models in Thailand, Indonesia, Philippines, and India.

Safety Initiatives

In beginning of 2006, in Thailand, Honda will introduce a new automatic transmission model equipped with a Combined Brake System (known as CBS, or the front and rear wheel interlocking brake system), which distributes an appropriate balance of front and rear wheel braking force only with left brake lever (rear wheel). As a company which provides mobility, Honda is committed to proactively promote safe motorcycle use. As a part of an effort to strengthen activities to promote safety, Honda will open another traffic education center in Indonesia in 2006, in addition to the existing centers in The Philippines, Vietnam, Thailand, Singapore, Australia, and India. Moreover, Honda has a plan to establish the Safety Riding School across the nation in Thailand, which will expand opportunities for Honda to educate motorcycle riders about safety.