News Releases 2005

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November 10, 2005

Honda to Expand Automobile Production Capacity in Brazil

Sao Paulo, November 9, 2005 --- Honda Automoveis do Brasil Ltda. (HAB), Honda's automobile production and sales subsidiary in Brazil, today announced plans to expand the production capacity of its existing automobile plant in Sumare, Sao Paulo.

HAB has experienced strong sales of the Civic and Fit models it manufactures due to growing demand for automobiles in South American markets where a strong economic recovery continues. Based on this growing demand, HAB will expand overall production capacity through expansion of its existing plant facility and by adding new weld, paint, and assembly lines and other production equipment. The annual production capacity will be expanded from the current 56,000 units (actual 2004 result, including exports), to more than 80,000 units by the beginning of 2007, and to 100, 000 units in 2008. The total investment related to this capacity expansion is estimated at US $100 million.

The automobile market in Brazil regained sales momentum beginning in 2003, and in 2004, overall automobile sales in Brazil grew 9% compared to the previous year, reaching approximately 1.48 million units. Honda's sales in 2004 grew faster than the growth rate of the overall market and reached 50,692 units -- a 58% increase compared to 2003. In 2005, Honda increased production by operating the plant on 3-shifts, and year-to-date sales from January to October reached 46, 641 units - a 14% increase compared to the same period a year ago. Honda expects to achieve an all-time automobile sales record in Brazil in 2005.

About Honda Automoveis do Brasil Ltda. (HAB)

Establishment : May, 1996
Capital Investment : R$882.78 million
Capitalization Ratio : 100% Honda South America Ltda.
Location : Sumare, Sao Paulo, Brazil
Representative : Tetsuo Iwamura, President
Business areas : Production and Sales of automobiles
Employment : Approximately 1,570 associates
Start of Production : August, 1997 (Civic)
Products : Civic, Fit
Production Capacity : 55,000 units/year (2-shifts) (as of 2005)