Honda Strengthens Function of Regional Operation Center in China

December 17, 2003, China

Corporate

Tokyo, December 17, 2003 --- Honda Motor Co., Ltd. today announced that it will establish a new wholly-owned subsidiary in China - Honda Motor (China) Investment Co., Ltd. - with the objective of strengthening the function of its regional operation center there. The new company will be responsible for developing Honda's overall business strategy in China and representing Honda group companies in various areas including corporate communications, and intellectual property management. The company is expected to begin operations in February 2004. 

Honda currently has 11 joint ventures and subsidiaries in China for its motorcycle, automobile and power equipment businesses. In April 2003, Honda established its sixth regional operation worldwide in order to manage Honda's growing operations in China more comprehensively. The new company will consolidate the regional headquarters functions and ensure that management decision-making is deeply-rooted in local market conditions and the needs of the customer. This strategy enables Honda to optimize its businesses to respond quickly to changes in the business environment of this rapidly growing market. 

The new company will serve as a holding company with various stakes in each Honda company in China. In this way, the company can make timely decisions on the allocation of business resources within the region. The specific investment of Honda Motor (China) Investment Co. in each business subsidiary is to be determined. 

Since 1994, Honda managed its global operations through a "matrix" system including both regional operations and its major business line operations. Under this system, Honda's six regional operations - Japan, North America, South America, Europe, Asia/Oceania, and China - are empowered to make strategic decisions in various business areas including product line-up, manufacturing, sales and investments. At the same time, headquarters functions for each business line - automobile, motorcycle, power equipment, and parts - make cross-regional decisions and strategic adjustments to optimize the efficiency of Honda operations globally.

About the new company

  Name of company : Honda Motor (China) Investment Co., Ltd.
Establishment : January, 2004 (tentative)
Start of operations : February, 2004 (tentative)
Capital : US$30million
Shareholder : 100% owned by Honda Motor Co., Ltd.
Representative (CEO) : Atsuyoshi Hyogo
Location : Beijing, China
Number of associates : approximately 35