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Vietnam
July 25, 2011

Honda to Build Third Motorcycle Production Plant in Vietnam with Annual Capacity of 500,000 Units, Increasing Total Annual Motorcycle Production Capacity to 2.5 Million Units

Hanoi, Vietnam, July 25, 2011 - Honda Vietnam Co., Ltd. (HVN), a Honda motorcycle and automobile sales and production joint venture in Vietnam, announced plans to build a third motorcycle production plant and expand its total annual production capacity by 500,000 units to accommodate consistent and rapidly growing demand of the motorcycle market in Vietnam.

HVN began motorcycle production in 1997, and by 2011, reached a total annual production capacity of 2 million units. The addition of the third plant will further increase HVN’s production capacity to 2.5 million units.

With an expected total investment of US$120 million (approximately 9.6 billion yen *1), the third plant is scheduled to become operational in the second half of 2012, in Ha Nam Province, approximately 40 kilometers south of Hanoi.

The motorcycle market in Vietnam has been staidly growing and the market size reached 2.69 million units*2 in 2010, an approximately 20% increase compared to 2009, making it the world’s fourth largest motorcycle market behind only China, India and Indonesia. Motorcycles have been an integral part of people’s daily lives in Vietnam, and further expansion of the market is forecasted as the economy continues to grow. Based on this forecast, HVN determined to build the third plant in order to further strengthen its capability to continue providing products to Vietnamese customers in a timely manner.

Since the start of production in 1997, HVN’s cumulative motorcycle production has reached 9.6 million units and sales has experienced a year-on-year increase for 14 consecutive years. Moreover, HVN’s market share in Vietnam reached 64% in 2010. HVN will continue enhancing its product lineup to fulfill the increasingly diversifying customer needs in Vietnam.

Honda will continue maximizing the joy of customers by creating good products with speed, affordability and low CO2 emissions.

*1
Calculated based on the exchange rate of US$1 = 80 yen
*2
Total sales results of four foreign-owned motorcycle manufacturers in Vietnam.

[About HVN Motorcycle Plants]

  First plant Second plant Third plant (plan)
Location Vinh Phuc Province
(32km Northwest of Hanoi)
Ha Nam Province
(40 km south of Hanoi)
Start of productionDecember 1997July 2008Second half of 2012
Annual production capacity1 million units1 million units500,000 units
EmploymentApprox. 3,800 associates
(as of the end of June, 2011)
Approx. 3,900 associates
(as of the end of July, 2011)
Approx. 1,800 associates
Total floor space 44,000 m2 69,000 m2 51,000 m2
Lot size 460,000 m2 270,000 m2
Major production models Super Dream,
Wave 110, Future
Click, Air Blade,
Lead
Automatic transmission (AT) models

About Honda Vietnam Co., Ltd.

Establishment: March 1996
Location: Head office (plants): Vinh Phuc Province
Sales office: Hanoi, Ho Chi Minh
Capital: US$ 62.9 million
Capitalization ratio: 42% Honda Motor Co., Ltd.
28% Asian Honda Motor Co., Ltd.
30% VEAM Corporation
(Vietnam Engine Agricultural Machinery Corporation)
Representative: President: Koji Onishi
Business: Production, sales, services of motorcycles and automobiles
Start of production: Motorcycle: December 1997
Automobile: July 2006
Production capacity: Motorcycle: 2 million units annually (2 shifts)
Automobile: 10,000 units annually (2 shifts)
Number of motorcycle dealers: 529 dealer locations (as of June 30, 2011)

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