News Releases 2006

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February 28, 2006

Wuyang-Honda Begins Production at New Motorcycle Plant

Guangzhou, February 28, 2006 --- Wuyang-Honda Motors (Guangzhou) Co., Ltd., a motorcycle production and sales joint venture in China between Honda and Guangzhou Motors Group Company, today began production at a new motorcycle plant in Zeng Cheng, Guangzhou. An investment of 380 million RMB (approximately 5.6 billion yen), the annual production capacity of the new plant is 1 million units. Key officials from local governments and Guangzhou Automobile Industry Group attended the line off ceremony today, along with Atsuyoshi Hyogo, Senior Managing and Representative Director and COO of the China Regional Operations of Honda Motor Co., Ltd.

The new 100,000 m2 plant is located on a 320,000 m2 lot in the Xintang Industrial Area of Zeng Cheng. The layout of the new plant accommodates almost all production processes within one building. A major improvement in efficiency is expected by synchronizing welding, painting, engine assembly and motorcycle assembly. In addition, the introduction of a system to control temperature and humidity in the paint facility and automated paint robots help maintain stable paint quality. Further, the new plant has many other new technologies, including adopting acrylic acid in the e-coating process to increase rust protection by six times over previous methods.

The new plant has environmentally-friendly features throughout the plant, adopting Honda's "Green Factory" concept. Wastewater from the factory and rainwater is recovered for reuse in watering plants and cooling the facility, and electricity is saved through use of natural lighting.

Wuyang-Honda is planning to start production this summer of a new small scooter with PGM-FI (Honda Programmed Fuel Injection System) to achieve improved fuel economy and cleaner emissions. This is the first time Honda will both produce and sell a model equipped with PGM-FI in China.

Further, Wuyang-Honda decided to begin activities to promote motorcycle safety riding with the Zeng Cheng local government. The construction of "traffic model city" will be supported to improve motorcycle driving skills and the attitudes for traffic safety in its residents.
Wuyang-Honda has been producing 100 to 125 cc motorcycles and scooters since 1992 and achieved the cumulative production milestone of 4 million units in February 2006. The production result for 2005 was 638,000 units, a 17% increase from 2004, with the company exporting more than 70,000 units to 38 countries, including the export of scooters to Japan.

<Wuyang-Honda Motors (Guangzhou) Co., Ltd.>

Established: July 1992
Location: Xintang Industrial Area of Zeng Cheng, Guangzhou, China
Capital Investment: US$30 million
Capitalization Ratio: 50% Honda Motor Co., Ltd.
50% Guangzhou Motors Group Company
Representative: YANG Dadong, Chairman
Chiaki KATO, President
Business: Production and sales of motorcycles
Employment: Approx. 3,300 associates (as of February 2006)
Annual Capacity: 1,000,000 units
Production Models: @Stream (125cc scooter), SCR100 (100cc scooter), MCR125, GL125, CGL125, CG125 (125cc motorcycle)
Spacy 100 (100 cc scooter for export)