News Releases 2004
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CorporateJapanJuly 15, 2004
Honda Announces Directions for the New Mid-term Plan

Tokyo, July 15, 2004 – Honda Motor Co., Ltd. today announced the direction and some initiatives for the new mid-term plan that will begin with the start of the next fiscal year, April 1, 2005.


Directions for the new mid-term plan:
For the new mid-term, Honda will pursue the “creation of new joys” and further highlight Honda’s originality. “Creation of new joys” means to continuously provide products and services that are ahead of the times and beyond customers’ expectations. In order to achieve these objectives, Honda will focus on the following four core points of Honda’s uniqueness during the new mid-term.
 
1) R&D: strengthen the ability to create new and unique technologies and products, which is the origin of Honda’s uniqueness.
2) Manufacturing: create dynamic manufacturing operations where high quality is achieved in every manufacturing process.
3) Sales: strengthen sales and service to achieve stable sales and lifetime customer satisfaction.
4) Mother function of Honda Japan: strengthen the capability of Honda in Japan to create new technologies that support the growth of global operations.
Honda will focus on technology, quality and motivation of Honda associates in order to strengthen the core points of Honda’s uniqueness and build a stronger Honda brand.

Motorcycle Business:
 
Develop new manufacturing technologies to achieve even lower cost for Honda’s affordable motorcycles that account for the majority of current worldwide annual sales of nearly 10 million units.
Enhance the mother function of the Kumamoto factory in ATV production such as the development of new manufacturing technologies and support for overseas operations.


Automobile Business:
 
Position Honda’s innovative SH-AWD (Super Handling All-Wheel Drive System) as one of the advanced technologies that enhances “fun-to-drive” characteristics and continue to advance this technology to expand its use to more models.


--- Automobile: Japan
 
Increase focus from the customers’ viewpoint to achieve the highest possible level of lifetime customer satisfaction.
Strengthen Honda’s minivan product lineup and continuously have a full model change or new model introduction each year in this category.
Establish a system to provide better overall service to our customers by promoting personnel training and developing IT-based systems.
Retain current total of 8.7 million Honda customers while adding more new customers.


--- Automobile: North America
 
Continue introduction of new products in the light truck category, including an all-new Odyssey (fall 2004), Honda SUT (spring 2005), and Acura brand SUV.
Strengthen Honda’s competitive advantage in the passenger car category with an all-new Acura RL (fall 2004) and a new entry-level Honda model (2006).
Continue to introduce vehicles with high fuel efficiency such as the Accord Hybrid (fall 2004) and all-new Odyssey equipped with Variable Cylinder Management (VCM) system.
Increase the flexibility of Honda’s overall production capacity in North America to better meet market demand.


--- Automobile: Europe
 
Expand and strengthen Honda’s lineup of diesel-powered vehicles by adding CR-V (early 2005), FR-V (known as Edix in Japan) and the next generation Civic.
Strengthen diesel engine production by increasing capacity of molding and machining at the Honda Engineering Tochigi Center and by transferring the assembly process to the Suzuka and Saitama plants (fall 2004). Achieve daily production of 300 units by spring 2005. Begin diesel engine assembly at Honda’s UK engine plant by the end of 2005.


--- Automobile: China
 
In addition to Guangzhou Honda’s annual production capacity of 240,000 units, capacity of Dongfeng Honda (Wuhan) will be expanded to 120,000 units over the next three years.
Guangzhou Honda will begin production of the Fit 5-door in fall 2004. Expansion of Dongfeng Honda’s (Wuhan) product lineup is being considered.
Establish Honda Engineering China Co., Ltd., a local subsidiary of Honda Engineering Co., Ltd in August, 2004 (tentative) to strengthen support for local production plants as they expand capacity, add new models and procure production equipment.
Improve the quality of Honda’s dealer network by adding sales of pre-owned vehicles to some dealer operations by the end of 2004.


--- Automobile: Asia/Oceania
 
Expand the product lineup such as the Jazz, with local production shifting into high gear.
Establish a training center in Thailand (August 2004) to develop staff for both sales and production areas in order to build a solid foundation to achieve high customer satisfaction.


Power Product Business
 
Further increase competitiveness by employing a new global production supply network – commercial use GS series engines are produced in Thailand and China while home use GC series engines are produced in the U.S. and Europe.
Further strengthen Honda’s competitive advantage in the area of the environment with Honda’s cogeneration system as well as marine engines and general purpose engines which exceed environmental standards.  The development of even cleaner engines will be continued.


Aviation Business
 
Establish Honda Aero, Inc. in the U.S. to oversee Honda’s aviation engine business. (July 2004)
Establish the Wako Nishi R&D Center to consolidate and strengthen aviation engine development. (July 2004)


Future Technology Development
 
HRI (Honda Research Institute) in Japan, the U.S. and Europe will hire engineers from a variety of industries and universities, and collaborate with outside organizations such as universities and venture companies to pursue development of new technologies in new areas such as new materials, intellectual systems and plant genomics.


Robotics
 
Honda’s invention of Macro Stabilization Control Technology received the 2004 Invention Award from the Minster of Education, Culture, Sports, Science and Technology. This invention was achieved through the research for bipedal walking robots. Honda will apply this technology in the future to develop posture control technologies for motorcycles, automobile and other vehicles.


Motor Sports
 
Honda is now in the final stages of renewing its contract in Formula One racing with British American Racing beyond next year. Honda will strengthen its team with a long-term view to win the series championship.



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