The year 2011 was one of hard work spent recovering from large-scale disasters of historic scope the Great East Japan Earthquake in March, and then massive flooding in Thailand in October. I would like to take this opportunity to apologize for the inconvenience that we caused many customers and local residents around the world when we were forced to halt operations at facilities in Japan and overseas, particularly in our automobile business, due to the effects of these two disasters.

Following the flooding in Thailand, we marshaled the entire group's resources to effect a rapid recovery and were able to resume production of automobiles on March 26, 2012, just four months after the floodwaters began receding at the end of November. We will continue to work actively to place our operations on track for growth by recovering from remaining delays caused by the earthquake and flooding as soon as possible.

The business environment continues to become more challenging due to the impact on the world economy of such factors as continuing strength in the yen and the financial crisis in Europe. Nonetheless, we look forward to strengthening Honda's presence in markets worldwide through not only products and technologies that delight customers and indeed all stakeholders, but also the full range of our corporate activities.

The year before last, Honda adopted "providing good products to our customers with speed, affordability, and low CO₂ emissions" as its management direction as it moves toward 2020. Last year, we put forth the Honda Environmental Vision, a declaration of our two goals of providing customers with the joy of personal mobility and achieving a sustainable society, in accordance with that direction. Since its founding, Honda has worked to develop personal mobility products and solutions so that customers can experience that joy. I believe that the joy of personal mobility consists, naturally, of pleasure derived from the freedom that comes from being able to operate a vehicle, but also of the sense of thrill and excitement that comes from the discovery of various dreams and inspirations made possible by mobility.
At the same time, we consider reducing CO₂ emissions to be one of the company's top priorities, which need to be addressed by marshaling the Group's management resources in order to realize "a sustainable society where people can enjoy life."

As it moves to achieve the two goals outlined in its Environmental Vision, Honda will continue to propose pioneering products and technologies that thrill and excite, highlighting its unique identity.

Last year, we proposed a variety of products and technologies in order to live up to our vision while meeting stakeholders' needs. For example, we announced Earth Dreams Technology, a group of next-generation automobile and environmental technologies that revamp the power train to blend fun with environmental responsibility in a highly advanced manner. We plan to roll out these technologies, which are engineered to further reduce their environmental impacts, to an increasingly large range of products, starting with the N BOX, a new mini-vehicle that we launched in November 2011. Our goal is to have achieved No. 1 fuel economy in every product category within three years.

We also launched the New Mid series of motorcycles featuring a newly developed 700 cc engine that combines the joy of riding with dramatic improvements in fuel economy. Going forward, we will bring a next-generation 125 cc scooter engine that further boosts fuel economy to not only Southeast Asia, the world's largest scooter market, but also Europe and North America.

During 2011, cumulative production of power products reached 100 million units. Going forward, we will launch a line of LPG-fueled, inverter-equipped generators designed to perform to maximum effect during power outages in times of emergency, and we will bring a series of newly developed portable generators engineered to offer exceptional fuel economy so as to reduce their environmental impact to emerging markets. To date, we have installed thin-film solar panels manufactured by Honda Soltec Co., Ltd., with a total capacity of 3.5 megawatts at worksites in Japan, the most of any Japanese automaker. We also plan to install the largest megasolar power generating system to be used at an automobile plant at our Yorii Plant, which is scheduled to start operation in 2013.

Last year, we introduced an initiative to promote "home production for home consumption," referring to the production of "lifestyle energy" in the form of heat and electricity at home for use in the home while utilizing mobility solutions. During the current fiscal year, we completed a trial home in the city of Saitama featuring the Honda Smart Home System, which provides comprehensive control over energy supply and demand in the home to provide benefits such as self-reliance in energy and mobility in the event of a disaster.

Utilizing these activities as a foundation, Honda is developing a vision for the future in which its technologies and business activities make it possible to achieve a society with an environmental footprint of zero based on a "triple zero" philosophy that seeks to eliminate CO₂ emissions from well to wheel (from the generation of electricity to its use to power vehicles), to eliminate energy risk through energy management technologies, and to eliminate waste products through adherence to the 3Rs (reduce, reuse, and recycle).

Even as we recognize that Honda's corporate social responsibility dictates that we work to achieve "a sustainable society where people can enjoy life" through products and technologies that excel in environmental and safety performance, we must acknowledge that Honda's corporate culture—indeed, its very origin—derives from a willingness to embrace the challenge of creating interesting products that delight customers, pursuing innovation to improve convenience, and daring to do what others have not.

The UNI-CUB, a new personal mobility solution announced in May 2012 that fits between the legs to offer a level of freedom on par with walking under one's own power, is a perfect example of this approach. Honda's research into humanoid robots such as ASIMO helped facilitate the development of the UNI-CUB, and the Honda Robotics technologies created by that program are an expression of a manufacturing philosophy that has remained unchanged since Honda's founding, a commitment embodying the company's founding spirit to create products that are useful, to make people happy through technology, and to ensure that technology exists to help people.

In January 2012, we announced the NSX Concept, a next-generation exotic sports car exemplifying the sporty product domain that symbolizes Honda's identity. We plan to sell the NSX both in Japan and overseas in an effort to provide the joy of driving through the achievement of exceptional environmental performance and fuel economy as well as the unique sense of acceleration and unity of driver and machine that characterize exotic sports cars.

Honda has historically pursued a program of corporate activities based on its fundamental beliefs of Respect for the Individual and the Three Joys. In short, creating exceptional products while respecting and affirming one another so as to delight the customers who use them gives us joy and fuels our dedication to embrace new challenges. We have undertaken development, procurement, production, and sales operations in partnership with people around the world out of a belief in the importance of this cycle. We at Honda will continue to act as a company society wants to exist by creating exciting products that resonate in the hearts of customers and all stakeholders in accordance with the people-oriented approach to manufacturing that lies at our very origins.

Takanobu Ito
President, Chief Executive Officer and Representative Director
July 2012