Honda-The Power of Dreams
Honda Announces 3-year Mid-term Business Plan;
Goal is to Reach 20 Million New Customers in FY Ending March 2005

Tokyo, July 10, 2002 --- Honda Motor Co., Ltd. today announced its mid-term business plans for the next three years, including an outline of how Honda will meet its new goal of increasing the number of customers from 12.7 million for the fiscal year ending March 2002, to more than 20 million customers in the fiscal year ending March 31, 2005.

A breakdown of the sales target by business category for the fiscal year ending March 2005, compared to the fiscal year ending March 2002, shows motorcycle sales of 11 million units, an increase of about 5 million units; automobile sales of 3.4 million units, an increase of about 700 thousand units; and power product sales of 6 million units, an increase of about 2 million units -- for a grand total of 20.4 million units.

Adopting "Spirited Independence" as the theme for its 3-year mid-term business plan, Honda will further advance the global activities it has vigorously pursued in order to enhance its competitiveness in "QCD," or the areas of quality, cost and delivery. In each region around the world, Honda will promote greater autonomy focused on local customers and markets while, at the same time, seeking to dynamically align each of these regional operations through "Global Networking." The goal is to make complementary use of Honda's management resources as well as to achieve the most appropriate global organization -- creating a network among Honda operations worldwide.



Summary of Major Developments By Business Category

Motorcycle Operations:

By drawing on its resources in Asia and its manufacturing know-how in Japan, Honda will offer new products at significantly lower prices.

  The "Wave Alpha" motorcycle sold in Vietnam, and a derivation of this model, have been launched in Thailand and the Philippines and they will be marketed in other countries as well.
  Inexpensive motorcycles made in China will be supplied to Africa and then to other regions.
  In spring 2003, a 100cc class scooter, to be offered at a price comparable to a 50cc scooter, will be supplied to Europe from India.

Honda will also provide new products with high added value.

  In spring 2003, 125cc and 150cc scooters equipped with fuel injection systems will be sold in Europe. Small 2-wheel vehicles equipped with fuel injection systems will be marketed in Asia and Japan.


Automobile Operations:

Japan

  The Accord will undergo a full model change in fall 2002. In order to satisfy the specific needs of customers around the world, two versions will be produced; a Japan/Europe version and a U.S./Asia version.
  In spring 2003, two models produced in North America, the Acura MDX sport utility vehicle and the new Element, will be imported to Japan.
  Annual production capacity in Japan will be maintained at 1.3 million units, with a flexible production system despite elimination of Suzuka Factory's #2 line.
  ~ The daily production capacity of the four lines at Suzuka Factory and the Sayama Plant will be increased to 1,100 vehicles by the end of the fiscal year ending March 2003.
  ~ Flexible innovations to be introduced at Yachiyo Kogyo by fall 2003, will enable an increase in daily production capacity to 1,000 vehicles.


North America

  Before the end of the fiscal year ending March 31, 2005, annual production capacity in North America will be increased to 1.4 million units.
  ~ A new production line will be built at the Alabama Plant, resulting in a 150,000 unit increase in production capacity for vehicles and engines. Production will start on the new line in spring 2004.
  ~ In early 2003, annual production capacity in Canada will be increased to 390,000 units.
  ~ Engine production capacity will be increased in Ohio through a more flexible line to meet increased vehicle production.


Asia

  China
  ~ Production and sales of a new small car model will begin by the end of the fiscal year ending March 2004.
  ~ Agreement has been reached for the feasibility study on a new production plant for the production and export of small cars.
  Taiwan
  ~ By the end of 2002, local production of automobiles will begin with production volume in the first year to total approximately 20,000 units.
  With an eye toward the AFTA arrangement, Honda will begin the reciprocal supply of the current Accord from Thailand to Indonesia and of the Stream from Indonesia to Thailand.
  Expansion of powertrain component supply
  ~ In the Philippines, annual production capacity of manual transmissions will be increased to 140,000 units by fall 2003.
  ~ In Indonesia, a new production facility will begin operation by fall 2003 to produce automatic transmissions and CVTs. Annual production capacity of transmissions will be increased to 250,000 units by the fiscal year ending March 2005. Production of engine valves will also take place at this facility.
  ~ Roughly 30% of the transmissions produced in the Philippines and Indonesia will be supplied to Europe. This is expected to make a significant contribution to European business operations.
  ~ In fall 2002, connecting rods and crankshafts produced at Dongfeng Honda Auto Parts Co., Ltd. in China will be exported to European manufacturing operations.


Europe

  In 2002, the new Accord will be unveiled at the Paris Motor Show.
  In 2003, the Accord Diesel will be launched.
  In spring 2003, the Civic Hybrid will be launched.


Power Product Operations:

  Next-generation engines with even higher performance in both fuel efficiency and quiet operation will be launched in 2004.
  The annual production capacity of the plant in Thailand will be increased to 1 million units by November 2002.


Research and Development:

  In order to further enhance fundamental research and development capabilities in Japan, a next-generation research and development facility will be constructed in 2003 on part of the site of the former Wako Plant.