March 11, 2008 – Yachiyo Industry Co., Ltd., a Honda’s consolidated subsidiary in Japan, announced plans to build a new auto plant which produces both engines and bodies on land adjacent to its Yokkaichi Factory in the effort to further strengthen its mini-vehicle business.

Equipped with advanced technologies, the new plant will be a state-of-the-art, highly flexible, and environmentally-responsible plant. It will start with engine assembly operations in the first half of 2009, followed by establishment of the automobile production
in the latter half of 2010.

With the new plant, Yachiyo will establish a highly efficient and high quality production system by separating production between the existing and the new plants based on product characteristics. (The new plant will produce the front-engined models, Life and Zest, with the existing plant concentrating on the midship-engined models, Acty and Vamos.)

The combined annual production capacity of the two plants will be approximately 240,000 units, which is almost the same as the current capacity. Total investment related to the establishment of the new plant is expected to be approximately 50 billion yen.

Once the new plant becomes operational, Honda’s Kumamoto Factory will transfer the production of mini-vehicle engines to the new plant and the assembly of mini-vehicle transmissions to Honda’s Suzuka Factory. Honda is expecting to improve the efficiency of logistics by concentrating production of key components to the Suzuka area.

With ongoing efforts to strengthen its auto sales structure in Japan and this new plan to strengthen its mini-vehicle production system, Honda will strive to further improve the attractiveness of its products and the company’s competitiveness in the mini-vehicle market where demand is expected to remain high.