Honda Begins Production of Automatic Transmissions at New Plant in Indonesia

September 25, 2003, Indonesia


Jakarta, September 25, 2003 --- P.T. Honda Precision Parts Manufacturing, Honda's parts production subsidiary in Indonesia, held an inauguration ceremony today at its new plant, marking the start of production of automatic transmissions and engine valves for automobiles. The new plant represents a capital investment of approximately US$64 million and employs approximately 1,000 associates. 

The automatic transmissions produced at P.T. Honda Precision Parts Manufacturing will be mated to the 2-liter-class 4-cylinder engine to be equipped in models such as the Accord and CR-V. The new plant is expected to achieve an annual production capacity of 250,000 automatic transmissions and 550,000 engine valve sets in 2004. The automatic transmissions and engine valves manufactured at the new plant will be supplied to Honda's automobile plants within the ASEAN region as well as exported to Honda plants in other regions including Europe. 

Automatic transmissions are one of the most sophisticated components of an automobile and require advanced machining technologies. Honda has become the first major automaker in the ASEAN region to produce automatic transmissions from start to finish. Production processes include casting, forging, machining and assembly. Honda began motorcycle production in Indonesia in 1971, and has been producing motorcycle transmissions including gears and other parts. Based on this technological expertise, experience and know-how, Honda has now been able to achieve local production of automatic transmissions for automobiles in the region. 

Under the concept of "Made by Global Honda," Honda has been working to establish a highly efficient and flexible global network for production and parts procurement, making the best use of the competitive strength of its production facilities located in different regions in the world. By expanding production of powertrain components in Indonesia, Honda is improving the local content ratio of its vehicles within the ASEAN region. Further, by capitalizing on its highly competitive production facilities in Asia, which produce low cost, high quality components, Honda will meet the needs of expanding automobile production while further enhancing its global competitiveness. 

In February 2003, P.T Honda Prospect Motor, a Honda automobile manufacturing and sales joint venture, began operation of a new automobile plant in Karawang, in the suburbs of Jakarta. In late May 2003, the transfer of automobile production from the previous plant to the new plant was completed. The total amount invested in construction for the new plant was approximately US$70 million with production for the first year forecasted at approximately 20,000 units. Annual production capacity is targeted to reach 40,000 units in 2004. The current number of associates is approximately 2,000, responsible for assembly of three models -- the Civic, CR-V and Stream.

Outline of P.T. Honda Precision Parts Manufacturing

Established: July 2002
Location: Bukit Indah Industrial Park, Suburbs of Jakarta
Representative: Fumio Kusunoki
Employment: Approx. 1,000 associates (in 2004)
Capital Investment: US$64 million
Capitalization Ratio: Honda Motor Co., Ltd. 100%
Start of Production: September 2003
Products: Automatic transmissions and engine valves for automobiles (casting, forging, machining and assembly)
Production Capacity: 250,000 automatic transmissions (in 2004) 
550,000 sets of engine valves (in 2004)

Outline of P.T. Honda Prospect Motor

Established: February 1999
Location: Karawang, approx. 70km southeastward from central Jakarta
Representative: Hadi Budiman
Employment: Approx. 2,000 associates
Capital Investment: US$70 million
Capitalization Ratio: Honda Motor Co., Ltd. 51%
P.T. Prospect Motor 49%
Start of Production: February 2003 (new plant)
Products: Civic, CR-V, Stream
Production Capacity: Approx. 40,000 units/two shifts