News Releases 2008

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July 31, 2008

Honda Consolidates Motorcycle Business Structure in Malaysia

Penang, Malaysia, July 31, 2008 – Honda Motor Co., Ltd. today announced it has signed a joint venture agreement with Oriental Holdings Bhd. (OH) in Malaysia to establish a 50/50 joint venture company, Boon Siew Honda Sdn. Bhd., in September 2008, to consolidate motorcycle production and sales in Malaysia and achieve higher customer satisfaction and efficiency.  

Currently, Boon Siew Sdn. Bhd. (BSW) is responsible for wholesaling Honda motorcycle products in Malaysia and contracts the final assembly of Honda motorcycles to Kah Assemblers Sdn. Bhd., a wholly-owned subsidiary of OH.

With the new agreement, Honda will obtain 50% of the outstanding shares of Kah Assemblers Sdn. Bhd. from OH, and establish a 50/50 joint venture with OH. In January 2009, wholesale operations are scheduled to be transferred from BSW to consolidate production and sales operations with the new company. While envisioning collaboration with other Honda companies in the ASEAN region, the new company will strengthen its competitiveness and strive to provide products and services which exceed customer expectations.

The overall size of the motorcycle market in Malaysia was approximately 468,000 units in 2007 (up 6% from 2006) and is expected to reach approximately 520,000 units in 2008 (up 11% from 2007). As steady growth is expected to continue, Honda will establish a new business structure which enables Honda to quickly respond to the diverse needs of customers and further grow its motorcycle business in Malaysia.

<About Boon Siew Honda Sdn. Bhd.>

Establishment: September, 2008 (planned)
Location: Penang, Malaysia
President: Shoichi Harada
Capital Investment: 2.5 million malaysian ringgit (MYR)*
   *about 83 million yen
Capitalization ratio: 50% Honda Motor Co., Ltd.
50% Oriental Holdings Bhd.
Business: Production and sales of motorcycle
Production Models: EX-5, Wave100, Wave125, Click, CBR150R
  * :1 malaysian ringgit (MYR) = approximately 33.2 Japanese yen

<History of Honda motorcycle business in Malaysia>

1957 Boon Siew Sdn. Bhd. (BSW) began import sales of Honda motorcycles
1969 Honda and BSW formed a technical collaboration and Kah Motor Sdn. Bhd. began final assembly of motorcycles in Malaysia contracted by BSW.
2005 Kah Assemblers Sdn. Bhd. became independent from Kah Motor Sdn. Bhd.
2007 BSW celebrated its 50th anniversary. Cumulative motorcycle production reached the 3 million unit milestone.

<Companies involved in Honda motorcycle business in Malaysia>

Name of company Establishment Capitalization Scope of Business
Boon Siew Sdn. Bhd. 1957 Boon Siew Family 100.0% Wholesaling of motorcycles
Kah Assemblers Sdn. Bhd.
(began final assembly of motorcyles under Kah Motor in 1969, and the company became in dependent in 2005)
2005 Oriental Holdings 100.0% Final assembly of motorcycles
HICOM-Honda Mfg. Malaysia Sdn. Bhd. 1985 DRB-Hicom 48.0%
Honda 30.0%
Boon Siew 19.0%
Others 3.0%
Engine assembly
Armstrong Auto Parts Sdn. Bhd. 1978 Oriental Holdings 53.6%
Honda 23.6%
Showa 5.0%
Others 17.8%
Production of body frame parts
Oriental Holdings Bhd. 1963 Boon Siew 43.0%
Honda 4.0%
Others 53.0%
Holding company (listed)