Guangzhou Honda to Build Second Auto Plant in China

November 9, 2004, China


Tokyo, November 9, 2004 --- Honda Motor Co., Ltd. today announced that Guangzhou Honda Automobile Co., Ltd. (GHAC), an automobile production and sales joint venture with Honda and Guangzhou Auto Group Corp. in China, plans to build a second auto plant. The new plant will be located in the Zeng Cheng region in Guangzhou, to the east of the existing Guangzhou Honda plant, and will have an annual production capacity of 120,000 units. Total investment in this project is expected to be approximately 2.2 billion R.M.B (28 billion yen), with the new plant to be operational in the latter half of 2006.

GHAC's new plant will accommodate production processes including stamping, welding, painting, assembly, and final inspection. The new plant will pursue high quality and high efficiency by utilizing the production know-how of the existing plant, as well as adopting the advanced production equipment of Honda's flexible New Manufacturing System to achieve Honda's global standard for advanced levels of quality, efficiency and flexibility. In addition, the new plant will reflect Honda's "Green Factory" concept - to realize a more people- and environmentally-friendly factory.

GHAC began production in 1999 with an annual capacity of 30,000 units. The production capacity has grown steadily with the growth of the Chinese market, and the plant currently has an annual capacity of 240,000 units. By adding a new plant, the total production capacity of GHAC will reach 360,000 units in 2006 and will enable the company to respond to strong demand for its current product line up as well as to meet the long-term growth in demand of the Chinese automobile market. To support this expansion, there is also a plan to expand engine production capacity at Dongfeng Honda Engine Co., Ltd., an engine production joint venture of Honda and Dongfeng Motor Corp.

In addition to this second plant in Guangzhou, Honda has announced plans to expand production capacity of Dongfeng Honda Automobile (Wuhan) Co., Ltd. (WDHAC), the automobile production and sales joint venture of Honda and Dongfeng Motor located in Wuhan, Hubei Province, to 120,000 units by early 2006. Furthermore, Honda Automobile (China) Co., Ltd., Honda's joint venture with Guangzhou Auto Group and Dongfeng Motor, is currently building a new auto plant dedicated exclusively for export. Honda's total annual auto production capacity in China will be nearly doubled from the current 270,000 units (GHAC: 240,000units, WDHAC: 30,000 units) to 530,000 units (GHAC: 360,000 units, WDHAC: 120,000 units, export plant: 50,000 units) in 2006.

【About Guangzhou Honda Automobile Co., Ltd.】

Established : July 1998
Capital Investment : US$139.94 million
Capitalization Ratio : 50% Honda Motor Co., Ltd.
50% Guangzhou Auto Group Corp.
Location : Guangzhou City, China
Representative : Lu ZhiFeng, Chairman
Sho Minekawa, President (Director, Honda Motor Co., Ltd.)
Employment : Approximately 4,300 associates
Start of Production : March 1999
Products : Accord, Odyssey, Fit Saloon, Fit
Annual Capacity : 240,000 units (to be increased to 360,000 in latter half of 2006)