News Releases 2002

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July 10, 2002

Honda Expands Production of Auto Powertrain Components in Asia

July 10, 2002, Tokyo - Honda Motor Co., Ltd., has announced plans to expand production capacity in Asia for automobile powertrain components, including engine parts and transmissions. The new and expanded facilities will both raise the local content ratio of Honda products produced in the Asia region and supply components to Honda auto plants in other regions, including Europe.

A new parts manufacturing subsidiary, P.T. Honda Precision Parts Manufacturing, will be established in Indonesia. With a target production start-up of fall 2003, the new company will build a new plant, which will produce components such as automatic transmissions, continuously variable transmissions (CVT) and engine valves.

P.T. Honda Precision Parts Manufacturing will represent an investment of approximately 8 billion yen (U.S. $66 million) and new employment of 900 associates. The production will start with automatic transmissions for 2-liter-class 4-cylinder engines to be equipped in models such as Accord and CR-V. The combined annual production capacity of these transmissions will reach 250,000 units when production of CVTs for small vehicles will be added in 2004. These transmissions will be supplied to Honda automobile plants outside the region such as the plant in the U.K., as well as plants in ASEAN countries. The production capacity of engine valves is targeted to reach 550,000 sets in 2004 for automobile production in ASEAN countries and other regions in the world as well.

In the Philippines, Honda will invest about 2 billion yen (U.S. $16.5 million) to an existing facility, Honda Parts Manufacturing Corp., which is currently producing automobile service parts. The company will begin production of manual transmissions this month with a production plan of 10,000 units for the first year to be supplied to Honda plants in the ASEAN region. When its annual production capacity reaches 140,000 units in fall 2003, the company will begin supplying transmissions to Honda automobile plants outside the region, including the plant in the U.K.. Additional employment of 200 associates is expected with the new expansion.

From this fall, in China, Honda's joint venture company, Dongfeng Honda Auto Parts Co., Ltd., which currently produces a variety of automobile components, will export engine parts including crank shafts and connecting rods to the automobile plant in the U.K. for CR-V production.

Under the concept of "Made by Global Honda", Honda has been working to establish highly efficient and flexible networks of global production and parts procurement, making the best use of competitiveness of its production facilities located in every region in the world. By capitalizing on its highly competitive production facilities in Asia, which have the capability to produce both low cost and high quality components, Honda intends to meet the increasing demand for automobile production while further enhancing its global competitiveness.

Outline of P.T. Honda Precision Parts Manufacturing (Indonesia)

Established : August 2002
Location : Bukit Indah Industrial Park
    Approx. 70km southeast of central Jakarta, Indonesia
Representative : President, Fumio Kusunoki
Employment : Approx. 900 associates (in 2004)
Capital Investment : Approx. 8 billion yen
Capitalization Ratio : Honda Motor Co., Ltd. 95%, P.T. Prospect Motor 5%
Start Production : Fall 2003
Products : Automatic transmissions, CVTs, engine valves
Annual Capacity : 250,000 automatic transmissions and CVTs (in 2004)
550,000 sets of engine valves (in 2004)

Outline of Honda Parts Manufacturing Corp.

Established : December 1992
Location : Santa. Rosa Industrial Park
    Suburbs of Manila, Philippines
Representative : President, Haruyuki Inami
Employment : Approx. 300 associates (in 2004)
Capital Investment : Approx. 2 billion yen
Capitalization Ratio : Honda Motor Co., Ltd. 100%
Start Production : July 2002 (for manual transmissions)
Products : Manual transmissions and automobile service parts
Annual Capacity : 140,000 manual transmissions (in fall 2003)

Outline of Dongfeng Honda Auto Parts Co, Ltd.

Established : December 1994
Location : Huizhou City, Guangdong Province, China
Representative : President, Takao Akimoto
Employment : Approx. 500 associates
Capital Investment : Approx. 3 billion yen
Capitalization Ratio : Honda Motor Co., Ltd. 56%, Dongfeng Motor 35%,
other local companies 9%
Start Production : April 1995
Products : Engine parts (crankshafts, connecting rods, cam shafts, sleeves), brake discs, and knuckles
Annual Capacity : 240,000 sets of connecting rods and crankshafts (in 2003)