Honda Motor Company Announces Small Car, New Plant for India

December 19, 2006 hsci

Tokyo, Dec 19: Honda Motor Company today announced that it would introduce a small-size vehicle in India and construct a second automobile plant with an aim to produce and sell more than 150,000 units of automobiles in India by the end of 2010.

Mr Takeo Fukui, President & CEO, Honda Motor Company, in his year-end address in Tokyo today, announced a series of initiatives and expansion plans for Honda operations in Japan and across the world.

With reference to the Indian automobile operations, Mr Fukui also said, “Annual automobile production capacity in India will be doubled to 100,000 units by the end of 2007”. The expansion to 100,000 units at Honda Siel Cars India’s Greater Noida plant has already begun and is progressing as per schedule.

In his speech he said, Honda would further accelerate its effort to strengthen the core characteristics that make Honda unique in each business area in order to continue creating new value and providing products and services which are beyond customers’ expectations.

Dwelling on Honda’s estimated worldwide sales for the year 2006, he said, Honda globally expects to achieve all-time record sales in all three product areas.
Motorcycles: 12.7 million units (up 3% from 2005)
Automobiles: 3.55 million units (up 5% from 2005)
Power Products: 6.4 million units (up 15% from 2005)

Asia Region (Excludes Japan & China operations)

Asia region’s 2006 automobile sales forecast: 320,000 units (up 4% from 2005, an all-time record for the 4th consecutive year)

Asia’s 2007 automobile sales plan: 360,000 units (up 13% from 2006)

For the Motorcycle business, Honda expanded motorcycle production capacity in India, the Philippines and Pakistan in 2006, and also announced further capacity expansion in India and Vietnam in 2007.

Strengthening Honda’s Commitment to Reduce its Environmental Footprint
• With new technologies such as advanced VTEC and VCM for automobiles and “super-low friction engines” for motorcycles, Honda will achieve further improvement of fuel efficiency and cleaner tailpipe emissions.

• Application of hybrid technology will be expanded to a smaller size vehicle. Honda will offer a new dedicated hybrid vehicle in 2009 at a price level lower than the globally popular Civic Hybrid.

• Application of diesel technology will be expanded to a medium-to-large size vehicle. Honda will introduce “super-clean diesel engine” that will meet the stringent U.S. TierⅡBIN5 emission standard, which reduces exhaust gas emissions to a level equal to a gasoline engine, in the U.S. market within the next three years. Honda will consider introducing this engine in Japan as well.

• In November this year, Honda began sales in Brazil of automobiles equipped with a flexible fuel vehicle (FFV) system, which enables gasoline engine-based power plants to operate on a wide range of ethanol-gasoline fuel mixtures between 20% to 100% ethanol. The Civic FFV went on sale in November and the Fit FFV in December.

• As for the development of technology which will more efficiently produce ethanol from stems and leaves of plants such as straw, an experimental plant will be built within Honda’s Fundamental Technology Research Center in Wako in 2007 in order to work toward establishment of the mass-production technology of bio-ethanol in the future.

• Compact, a home-use cogeneration unit, which has been sold roughly 40,000 units in Japan since its introduction in 2003, will be sold in U.S. from next year. (the first home-use cogeneration unit to be sold in the U.S.)

Solar Cell

• A new solar cell subsidiary, Honda Soltec Co., Ltd., was established earlier this month. This company will begin full-scale sales of soar cells when mass production begins at the new plant in Kumamoto in fall 2007. Through production and sales of environmentally-friendly and sustainable energy, Honda will further contribute to the effort to prevent global warming.

Fuel Cell

• A mass production model based on the technology and design of the FCX Concept will become available for lease sales in 2008 in Japan and the U.S.

• As for hydrogen generation technologies, Honda will further advance the Home Energy Station which produces hydrogen from natural gas, as well as the solar cell based Hydrogen Station, which Honda has already begun testing in the U.S.

Honda will continue to be the leader in the effort to reduce its environmental footprint by accelerating the company’s commitment and challenges to reduce CO2 emissions through innovation of engine technologies and production of clean energy.

• Honda has been receiving far more orders than the annual production plan of 70 units. With a plan to deliver the first HondaJet to a customer in 2010, Honda is making progress in determining the location for a production plant in the U.S. and establishing a high quality sales and service network.

• In addition to the HondaJet, the HF120 Turbofan engine which was developed by the joint venture company GE Honda Aero Engines LLC, will be installed to the Spectrum Aeronautical’s “Freedom” which will go on sale in 2010. Honda will also be providing fuel efficient and highly competitive advanced engines in the world of aviation.

Honda will further strengthen the core characteristics that make Honda unique and continue taking on challenges in the creation of advanced technologies and products that represent the uniqueness of Honda to accomplish our goal to provide our customers with even greater joy and excitement.