Honda-The Power of Dreams
Honda Builds Second Car Plant in the UK

Reading, Berkshire, June 11, 1998 --- The following News Release was issued in London at 10:00 a.m. local time on June 11 (6.00 p.m. Tokyo time). Preceding the issue of the News Release, the president of Honda Motor Co., Ltd., Nobuhiko Kawamoto, was involved in official talks at Downing Street with British Prime Minister Tony Blair and the Secretary of State for Trade and Industry, Margaret Beckett.

Today the European subsidiary of Honda, Honda Motor Europe Ltd. (HME: Headquarters: Reading, Berkshire, UK; President: Minoru Harada) announced that Honda's manufacturing subsidiary in the UK, Honda of the U.K. Manufacturing Ltd. (HUM: Headquarters: Swindon, Wiltshire, UK; President: Akira Takano) planned to build a second car manufacturing plant in Britain.

Plans envisage the construction of a new plant on an existing Honda site capable of annual production of 100,000 vehicles, with production slated to commence at the end of the year 2000. Alongside this, Honda plans to upgrade its existing engine manufacturing and car body assembly plants by 2002 to supply the enhanced manufacturing capacity. Once the new plant is operational, HUM's two environmentally friendly, high-efficiency, state-of-the-art production lines will between them be capable of making over 250,000 vehicles per year.

The total capital investment in new plant and machinery will be around 450 million pounds, bringing Honda's total investment in the UK to over 1.15 billion pounds. HUM anticipates the new plant will employ around 1,000 workers. By 2002, when all the manufacturing capacity investments have been made, HUM says it will employ roughly 4,000 workers during full-scale production.

The new second plant will house welding, painting, vehicle assembly and finished product quality inspections. Engines and pressed body parts will be supplied from existing factories. Construction will begin as soon as final approval has been given by local authorities. Honda expects to be able to begin producing Civic models at the plant from around the end of 2000. The plant will also be the site of manufacture for a new small car due to be launched in 2002.

Since announcing its intention to make its European operations as independent as possible in June 1994, Honda has been steadily strengthening and expanding its sales, production, development and procurement capabilities within Europe. These new developments build on the progress that has been made over the past 4 years, and are designed to boost Honda's operational independence in Europe, underpinned by a strong UK production base capable of producing 250,000 vehicles per year.

Planned investments: outline

Construction of No. 2 plant (finish 2000): 130 million pounds
Upgrading of existing plants (finish 2002)
and related investments:
120 million pounds
Investments in new model development: 200 million pounds
Total: 450 million pounds

Outline: Honda of the U.K. Manufacturing Ltd.

Company name: Honda of the U.K. Manufacturing Ltd.
President: Akira Takano
Head office: Highworth Rd., South Marston, Swindon, Wiltshire SN3 4TZ (approximately 130 km west of London)
Established: February 1985
Finished automobile inspections began in 1986.
Engine production began in 1989.
Finished automobile production began in 1992.
Paid-in capital: 370 million pounds
Site area: 1,497,000 sq. meters
Total building area: 107,000 sq. meters
(including office space)
Employees: 3,000
Manufacturing statistics (1997): Engines: 135,195 units; cars: 108,102 vehicles
Models manufactured: Accord, Civic, Civic Aerodeck (station wagon)-all models specifically built for the European market

(Reference material)

Honda of the U.K. Manufacturing Limited

Capital investments

To date:
Engine manufacturing: 70 million pounds
Car body manufacturing: 300 million pounds
Pressing plant: 300 million pounds
Capacity upgrading (from 100,000 to 150,000 vehicles): 60 million pounds
Related to new model development: 240 million pounds
New planned investments:
No. 2 plant (by 2000): 130 million pounds
Upgrading of existing plants (include. engine plant) and related investments (by 2002): 120 million pounds
Investments in new model development (by 2002): 200 million pounds
Grand total: 1.15 billion pounds

Principal developments at HUM

February 1985 Honda of the U.K. Manufacturing Limited established. Construction starts at the site of an abandoned airfield (1,480,000 sq. meters) in South Marston, Swindon, Wiltshire UK
September 1986 Operations begin with the Pre Delivery Inspection (PDI) of Rover-built Honda cars, and other Honda cars imported from Japan as a PDI Center
July 1989 Construction of engine manufacturing plant completed. Production of engines for the Honda Concerto and Rover 200/400 series (manufacturing sub-contracted to Rover) begins
October 1992 Car body assembly plant and second engine production line enable integrated automobile manufacturing facility; production of the European version of the Accord commences
May 1994 ISO 9002 quality standard certification acquired
September 1994 Two-shift system introduced in the body assembly plant
October 1994 Production of HUM's second model, the Civic 5-door hatchback, commences
April 1995 Pressing plant begins operations, producing body panels Cylinder-block machining line for Accord engines commences operations
February 1996 Maintenance center opened for pressing plant molds
October 1996 Cumulative HUM production surpasses 250,000 vehicles
February 1998 Production of HUM's third model, the Civic Aerodeck, commences
March 1998 ISO 14001 environmental management systems standard certification acquired
August 1998 Production of new European version of the Accord commences

Production-related data (calendar years)

4-wheeled vehicles
Accord Civic 5D Total
1992 1,100 1,100
1993 32,139 32,139
1994 36,233 6,652 42,885
1995 23,521 67,677 91,198
1996 41,627 64,292 105,919
1997 33,439 74,663 108,102
1998 (forecast) --- --- 130,000

Engines

Honda cars Rover cars Total
1989 2,847 2,684 5,531
1990 27,204 48,388 75,592
1991 35,419 46,754 82,173
1992 33,729 43,261 76,990
1993 49,382 66,632 116,011
1994 48,672 84,630 133,302
1995 91,173 65,355 156,528
1996 98,895 38,929 137,824
1997 97,003 38,192 135,195
1998 (forecast) --- --- 149,000

Honda vehicle sales in Europe

Total number of Honda vehicles sold in Europe:

1993: 164,543 vehicles
1994: 172,380 vehicles
1995: 184,000 vehicles
1996: 204,576 vehicles
1997: 235,288 vehicles
1998 (forecast): 250,000 vehicles (130,000 manufactured by HUM)
2000 (forecast): 300,000 vehicles (150,000 manufactured by HUM)