Honda-The Power of Dreams
Honda Announces New Automobile Sales Channel Strategy and Introduction of Acura(*1) Brand to Japan
-- Focus will be on maximizing customer joy and satisfaction and creating new value --

TOKYO, Japan, December 14, 2005 – Honda Motor Co., Ltd. today announced plans to integrate the company’s three existing domestic automobile sales channels – Primo, Clio and Verno – into one Honda channel in March 2006. This integration will enable Honda customers to purchase and service any Honda brand automobile at a single Honda dealer and to maintain a continuous relationship with the same dealer for future sales and service needs as a means to achieve a high level of satisfaction.  In addition, Honda announced plans to introduce its luxury brand, Acura, in Japan, by fall 2008.  The Acura brand will offer distinctive products with a core focus on advanced, leading edge technologies that are always ahead of the times.

The goals of the new sales channel strategy are to maintain Honda’s ability to respond to changes in society and the automobile market and to continue to provide the diverse values desired by customers and meet increasingly sophisticated customer needs.  In turn, this will enable Honda to maximize the joy and satisfaction of existing customers earned through the three channel structure (with the cumulative number of Honda vehicles in Japan now standing at approximately 9 million units). Further, Honda aims to restructure and strengthen its domestic automobile dealer network by creating new value for the customer through Acura brand products.

Integration of Honda channels to maximize customer joy and satisfaction
Honda established the current three-channel structure by creating Verno in 1978, Clio in 1984, and Primo in 1985, offering Honda products for customers with different lifestyles. Supported by growing automobile demand at that time, Honda continued to enhance its product line-up and increased sales and the number of dealers. At the same time, Honda began conducting the CSI (Customer Satisfaction Index) survey in 1984, and strengthened initiatives which always put customer satisfaction at the core. Through these efforts, Honda steadily increased the number of Honda customers and made significant progress in achieving the autonomy of its dealers.

The Japanese automobile market has now entered a stage of increasing maturity, and the surrounding society and marketplace are in a transition stage as well. In this increasingly competitive environment, the most important factor is to always continue improving the lifetime satisfaction level for the customers who have already chosen the Honda brand.

Based on this concept, Honda decided to integrate its existing channels into one Honda channel where customers will be able to purchase and service any Honda brand automobile and to continue receiving high quality sales and service from the same dealer for future needs whether that be replacing their current vehicle or adding another one. Honda also aims to build a dealer network that places the Honda brand at the forefront by maximizing use of existing facilities and manpower and by optimizing the location of sales facilities.

Introducing Acura to create new value for the customer and to continue to achieve further growth and to take a big step forward in Japan
Recently, the values desired by the customer have become even more diverse and customer needs are becoming increasingly sophisticated in the automobile market.  Honda will proactively respond to these changes by creating new value for the customer with the introduction of Acura, a luxury brand that will offer a distinctive driving experience and other unique characteristics. The Acura brand will start in fall 2008, with approximately 100 dealers in Japan.  This also will enable Honda to achieve further growth and take a big step forward in its home market of Japan.

With this new sales channel strategy, Honda will accelerate its effort to maximize customer joy and satisfaction, and by challenging in this new area Honda will pursue the goal of consistently achieving annual sales of more than 800,000 units.



(*1) Acura is a luxury brand Honda first introduced in the U.S. in 1986.