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| Honda expands and strengthens its business foundation
in China, which has entered full-scale growth stage. |
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| Product supply framework enhanced to meet customer
needs |
| Honda is working to enhance manufacturing in the world's
fastest-growing auto market. By the second half of 2006, we achieved
annual production of 530,000 vehicles through plant expansion at Dongfeng Honda
Automobile Co., Ltd., and startup of a second plant at Guangzhou Honda Automobile
Co., Ltd. We are also increasing local production of parts and stamping dies.
As for its product lineup, following Guangzhou Honda's introduction of the Accord
in 1999, the Odyssey and Fit models were introduced focused on growing
numbers of individual automobile users. Dongfeng Honda, which became operational
in 2004, commenced production of our mainstay car, the Civic, in 2006 to add
to its manufacturing of the CR-V. To meet the diverse demands of customers,
Honda will introduce the Acura brand into the luxury vehicle market in China,
the first expansion of the brand outside North America. Further, Honda Automobile
(China) Co., Ltd., the first auto production plant in China dedicated
exclusively to exports, began exports of the Jazz to Europe in 2005. |
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| Growth of motorcycle product operations in China |
| In Honda's motorcycle business in China, two joint-venture
corporations, Sundiro Honda Motorcycle Co. and Wuyang-Honda Motors (Guangzhou)
Co., have been active in manufacturing scooter products. These include the Today,
a popular key product in Japan, as well as products sold
inside China. Remarkably, two new plants in Tianjin — Sundiro Honda and Wuyang-Honda —
have been established as environmentally friendly "green factories." In
addition, Honda has established a motorcycle R&D office in Shanghai to accelerate
product development in meeting local needs. In the power products category,
Honda has started to manufacture electric generators and general-purpose
engines, both for export and domestic use. With the expansion of these businesses,
Honda Motor (China) Investment Co., Ltd., has become Honda's business center
in China, less than two years after its establishment in 2004. Additional
operations have been founded in Beijing, Shanghai, and Guangzhou, to meet
the local needs of the Chinese market. |
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