Honda Establishes Solar Cell Subsidiary Company, Honda Soltec to Make Full-Scale Entry into Solar Cell Business

December 1, 2006, Japan


Tokyo, December 1, 2006 - Honda Motor Co., Ltd. today announced plans to establish a wholly-owned subsidiary, Honda Soltec Co., Ltd., which will produce and sell the next-generation thin film solar cell independently developed by Honda. The new company will lead Honda to make a full-scale entry into the solar cell business.

The next-generation solar cell to be produced and sold by Honda Soltec was developed by Honda Engineering Co., Ltd., the production engineering subsidiary of Honda. By using thin film made from a compound of copper, indium, gallium and selenium (CIGS), Honda's next-generation solar cell achieves a major reduction in the amount of energy consumed during the manufacturing process by approximately 50% compared to what is required to produce conventional crystal silicon solar cells. This makes the new solar cell more environmentally-friendly by reducing the amount of CO2 generated even from the production stage.

At the end of September 2006, Honda began construction of a plant to mass produce solar cells within the current site of Honda's Kumamoto factory, and the new facility will become operational in fall 2007 with an annual capacity of 27.5 megawatts. Prior to the start-up of the new plant, Honda Soltec will begin sales in limited areas in March 2007, of CIGS thin film compound solar cells produced by Honda Engineering. Once mass production begins at the new plant in Kumamoto in fall 2007, Honda Soltec will expand sales throughout Japan.

In addition to its effort to reduce CO2 emissions through development of clean automobile engines, Honda is committed to develop environmentally-friendly and sustainable energy technologies. Honda will contribute to the effort to prevent global warming through production and sales of a clean energy source which does not use fossil fuels.

【About Honda Soltec Co., Ltd.:】
Establishment: December 1, 2006
Headquarters location: 1500 Hirakawa, Ozu-machi, Kikuchi-gun, Kumamoto (within the current site of Honda Motor Co., Ltd. Kumamoto factory)
Sales office location: Wako, Saitama (plan)
Capital investment: 4 billion yen
Capitalization ratio: 100% Honda Motor Co., Ltd.
Representative: President: Akio Kazusa
Employment: Approximately 150 associates (plan)
Business: Production and sale of solar cells
<About the New plant:>
Lot area: 25,000 square meters (m2)
Facility size: 11,080 square meters (m2)
Investment: Approximately 7 billion yen
Start of operation:  Fall 2007 (plan)
Production capacity: Approximately 27.5 megawatts annually