Honda-The Power of Dreams
Honda to Fortify Japanese Domestic Automobile and Power Products Sales Operations

TOKYO, Japan, May 23, 2005 – Honda Motor Co., Ltd. announced today that with the aim of reinforcing workplace fundamentals and promoting the evolution of its automobile and power products sales operations, it will implement a new sales structure in Japan for the two business fields on September 1, 2005. Main elements of the new operational structure include the creation of high-efficiency business field structures and the fortification of the sales function.

Under the new sales structure, Honda will create an even more robust and modern sales system that maximizes lifetime customer satisfaction. The major initiatives within the new structure are as follows:

Creation of High-Efficiency Business Field Structures
  1) Unification of Branch Offices with Honda Headquarters
  The following branch offices in Japan will be closed and merged with Honda headquarters: the six automobile Regional Sales Offices, the six Parts Centers, the eight Power Products Sales Offices, and the Power Products Administrative Office. This unification will serve to concentrate main tasks in corporate headquarters, place corporate headquarters on the front line of operations, fortify cooperation between the headquarters and dealers, and use IT even more efficiently, leveraging the ability of Honda associates to serve our customers. As a result, Honda will respond more flexibly and rapidly to market changes and customer needs that are increasingly varied and complex.

  · The six automobile Regional Sales Offices will merge their functions with departments in Honda headquarters. The new Eastern Japan Sales Division and Western Japan Sales Division will perform such key functions as territory-based field sales and dealer communication, aiming for increased cooperation at the point of sale.

  · From sales to logistics, the supply chain will be completely redesigned and the roles within it made more clear. To achieve functional unification, the role of the six Parts Centers will be transferred to two headquarter divisions, the After-Market Control Division will assume control of sales functions and the Parts Business Division will assume control of logistic functions of the six Parts Centers to centralize and fortify each function.

  · The new headquarters-based Power Products Sales Division will replace the eight Power Products Sales Offices and the Power Products Administrative Office. The new organizational management structure will achieve functional unification to respond to the changing purchasing practices and business realities at both large-scale retailers and local dealers.

  2) Introduction of Direct-Access Field Sales
  Under the current system, associates use regional offices as bases from which they visit dealers to collect information and communicate strategies. In contrast, under the new system, associates will live and work in their territories and keep in contact with the dealers directly. By eliminating the travel time between regional offices and dealers’ locations while also maximizing the efficiency with which IT solutions are implemented, the new sales system will be speedier, more efficient, and more connected to the point of sale.

  · For automobile sales, Primo Block Managers and Service/Parts Block Managers will live and work in each sales territory.

  · Similarly, Power Products Block Managers and Power Products Service Managers will live and work in their respective territories.

  · In both areas, direct access to dealers and the fuller use of IT will create a sales system that is speedier, more efficient, and more connected to the point of sale.

Strengthening the Sales Network and Sales Function
  1) Introduction of Direct-Access Field Sales
  To improve the quality of sales and service for small- and medium-sized regional automobile dealers and further strengthen management, a new system will replace the current Local Dealer Guidance System. Drawing upon a wealth of experience and specialized knowledge, approximately 120 department-head-level associates will be assigned to dealers for extended periods to effect a general fortification of dealer management systems.

  2) Fortifying the Development of Human Resources
  To reinforce workplace fundamentals and promote the evolution of the corporate structure, Honda seeks to fortify the development of the company’s human resources on a lifelong basis. To this end, Honda Consulting Co., Ltd. will be established as an independent and flexible human resources development company that helps improve skills and maximize each person’s experiences and abilities.

This new company will employ current associates, experienced dealers, retired Honda associates, and external human resources as instructors to effect industry-leading dealer sales and human resource development.

Overview of Honda Consulting Co., Ltd.
Name: Honda Consulting Co., Ltd.
Capital: 100 million Japanese yen
Captilization: 100% owned by Honda Motor Co., Ltd.
Date of foundation: Registration planned for July 2005
Number of employees: Approximately 130 (estimate for September 1, 2005)
Address: Sumitomo Fudosan Iidabashi Building, Building 3, 10F;
Nishi-Gokencho 13-1, Shinjuku Ward, Tokyo