|Honda Establishes New Automobile Sales Subsidiary in Argentina|
|Buenos Aires, December 10, 1998 --- Honda Motor Co., Ltd. issued the following News Release in Argentina on December 9, 1998.
Honda Motor Co., Ltd. has announced that it is establishing a local subsidiary in Buenos Aires, Argentina. Honda Automobiles de Argentina S.A.will import and sell Honda automobiles and parts, with operations due to commence in January 1999.
With sales of approximately 430,000 units in 1997, the Argentinean vehicle market is the second largest in South America behind Brazil, and it is expanding. Since 1990, Honda has sold automobiles in Argentina through Surauto S.A, a local import agent. As one part of plans to strengthen its operations in the Mercosur* trading bloc, Honda has decided to strengthen its sales network in the region with the establishment of a joint venture sales company in Argentina. The new company is a joint venture with Surauto. A formal joint venture agreement was formally signed at a ceremony held on December 9.
In Argentina, Honda currently sells Accord and Civic models imported from the United States, as well as CR-V and other models imported from Japan. In conjunction with the establishment of the new company, Honda also plans to import and sell Civic models manufactured in Brazil, starting at the beginning of 1999. Honda's total motor vehicle sales in Argentina were approximately 2,400 units in 1997, and the Company sales target is 3,500 units in 1998, and 5,000 units in 1999.
* Mercosur (short for 'Mercado Comun del Cono Sur,' meaning the single market covering the southern part of South America) has four members: Brazil, Argentina, Uruguay and Paraguay. The agreement was signed with the goal of creating a regional free-trade area governing the movement of labor and capital, as well as trade in services. It came into being with the signing of the Asuncion Treaty in 1991. As of January 1, 1995, the Mercosur bloc boasted a total GDP of US$700 billion and a population of over 200 million people.
Outline of the new company:
** Honda Automoveis do Brasil Ltda. is a 100%-owned local Honda subsidiary that manufactures and sells automobiles and parts for repair in Brazil.