Tokyo, Japan, September 20, 2006 - Honda Motor Co., Ltd. today announced that it will consolidate all motorcycle production in Japan at its Kumamoto Factory to strengthen the plant's global leader function for motorcycle production. The move is being made in response to the evolution of product and production engineering and increases in global motorcycle demand. Honda will also strengthen its production system for automatic transmissions (AT) at the Hamamatsu Factory, as demand continues to increase worldwide.

Honda has been expanding its motorcycle business, with Asia at the center, and the company expects global sales of more than 18 million units by 2010, an increase of more than 5.7 million units compared with 2005 results. In addition, Honda is promoting the evolution of production engineering through expanded application of advanced technology to motorcycles in such areas as the environment and safety. As a result, Honda facilities in Japan play a larger role each year as leaders for production facilities worldwide, in areas such as new model launches and advancing the skills of engineers.

As a result of this key role, Honda plans to gradually shift production of medium to large motorcycles (displacement over 250cc) from Hamamatsu Factory to Kumamoto Factory starting in 2008, concentrating technology and expertise at Kumamoto. Toward this end, Honda plans to construct a motorcycle plant on the current Kumamoto Factory site with an annual capacity of 600,000 units.

This step will further enhance the levels of production engineering and new model startup technology at Kumamoto Factory, and promote the advancement of the skills of engineers and implementation of advanced technology at Honda production facilities around the world. This will make Kumamoto the global leader factory in the production of motorcycles and ATVs.

As a result of the expansion of its automobile business in each region of the world, Honda expects sales of more than 4.5 million automobiles by 2010, an increase of more than 1.1 million units compared with 2005 results. To handle the expected rise in demand for automatic transmissions and related technical advances, Honda will strengthen the production system at Hamamatsu Factory, the leader factory for AT production. In particular, production capacity will be increased, with major portion of the planned increase produced in-house, to respond to growing demand for transmission gears, which require sophisticated production engineering.

More specifically, the current Hamamatsu Factory motorcycle plant will become a transmission gear production plant, with the goal of establishing a highly efficient production system covering all processes, from molding to machining. Further, construction of a new casting plant and renovation of the machining and assembly lines will contribute to an evolution of the AT production system, including parts. Hamamatsu Factory will also enhance its function for transferring the cutting-edge production technology it has developed to Honda production facilities around the world.

< Reference > Outline of the Factories *As of September, 2006