98AccordEx

http://www.hondanews.com/CatID1000?m...51132&mime=asc

THE FOLLOWING ARE EXCEPTS RELATED TO AUTOMOBILE PRODUCTION:

The business environment is becoming more difficult due to several factors including the escalating price of crude oil and sudden fluctuations in currency exchange rates. In this increasingly competitive environment, Honda maintains its focus on being a company that society wants to exist. We will also focus on strengthening the core elements that make Honda unique in each area of its activities including R&D, production and sales and service.

* Honda will develop a strong and robust corporate structure to buffer the company from exchange rate fluctuations and other changes in the business climate by increasing the self-sufficiency and autonomy of each regional operation and by improving quality, cost and delivery in our parts sourcing efforts.
* Honda will further enhance its sales and service by focusing on its customers. Our highest priority is customer satisfaction.
* Honda will strengthen its R&D efforts by looking more than 10 years into the future. Honda's goal is to continuously provide advanced products to our customers.

Automobile Business
In the fall of 2005, the Civic, with annual sales of more than 500,000 units worldwide, will undergo a full model change. Honda's automobile business has advanced in step with the Civic. The Civic is now manufactured in Japan, North America, South America, Europe and Asia. Civic is a truly global car and will be produced in all six regions of Honda's global operations when China begins Civic production in 2006. The Civic is a key model for Honda and will continue to drive Honda's automobile business forward with its next full model change.

Automobile Production:
Based on Honda's commitment to "build products close to the customer," we have proactively pursued the localization of production. In the last three years, overseas auto production increased by more than 500,000 units. In order to strengthen our corporate structure to enable us to deal flexibly with currency exchange rate fluctuations and changes in the economic environment of each country, Honda will promote local production of engines and key drivetrain components, which require a high level of precision manufacturing.

-U.S.
Honda will invest a total of US$270 million dollars in the U.S. for powertrain production.

* In Georgia, Honda will establish an automatic transmission plant with an annual production capacity of 300,000 units.
* In Alabama, production of crank shafts and connecting rods will be added.
* In Ohio, local production of high precision transmission gears will begin - the first time for it to be done in the U.S.


Automobile - Japan:
2004 Domestic Sales Forecast: 740,000 units (up 1% from 2003)
In the spring of 2005, Honda will introduce a new model that offers new values in the small wagon segment. Teamed with the all-new Civic, Honda will strengthen its product lineup. E-dealer systems, now installed at all dealers, will fully conform to the Automobile Recycling Law at the beginning of 2005. This system enables Honda dealers to provide consistent service nationwide from the first price estimate to auto inspection and maintenance. Honda will fully utilize such IT systems to further improve its sales and service to achieve a 2005 sales goal of 770,000 units. Further, Honda is committed to put even greater focus on our customers and maximize the lifetime satisfaction of the cumulative 8.8 million Honda owners.

Automobile - North America:
2004 U.S. Sales Forecast: 1, 376,000 units (up approximately 2% from 2003)
In the spring of 2005, Honda will begin sales of the "Ridgeline" - Honda's proposal for a next generation light truck. Civic, with annual sales of approximately 300,000 units in the U.S., will undergo a full model change in 2005 as well. Combined with these new models, Honda will enhance its product lineup to meet a wide range of customer needs - from passenger cars to light trucks.

The U.S. sales plan for 2005 is set at 1.45 million units based on our plan to launch new products with excellent fuel efficiency and environmental performance and to reach full capacity on the second production line in Alabama. In addition, a new Acura SUV will be launched at our Ohio plant in 2006.

Honda will strengthen the foundation of its automobile business in North America by enhancing its product lineup and by strengthening its production operations.

Automobile - Europe:
2004 European Sales Forecast: 253,000 units (up 16% from 2003)
Total automobile production at the Swindon, UK plant is expected to exceed 190,000 units in 2004. All-time records are expected both for production and sales.

Sales of the Accord Diesel, introduced at the beginning of this year, has reached 20,000 units, which has helped increase total Accord sales in 2004 to 50,000 units, compared to 35,000 units in 2003. Looking ahead, Honda will launch the CR-V Diesel at the beginning of 2005, aiming to double sales of the vehicle. Further, the FR-V Diesel will be launched by the summer of 2005. By introducing these diesel models in segments with a high ratio of diesel sales, Honda will be better able to meet customer needs. The European sales plan for 2005 is set at 275,000 units.

The all-new Civic, which will go on sale at the beginning of 2006 in Europe, will also be equipped with a Honda diesel engine to expand the market for the vehicle. In order to meet growing demand in Europe created by our enhanced diesel product lineup, Honda will dedicate the entire CR-V production capacity of the UK plant to meeting demand in the European market. At the same time, Honda also decided to discontinue exports of the CR-V from the UK to the US by beginning local production of the CR-V at one of its plants in Ohio, starting with the next generation CR-V.

-Automobiles
In Japan, all Honda automobiles now comply with the 2005 emission regulations. Eleven models are certified as "Ultra" low emission vehicles and 16 models are certified as "Excellent" low emission vehicles. The unit percentage of "Ultra" and "Excellent" low emission vehicles totals 82% of all Honda vehicles, an industry leading penetration level. In the area of safety, the Odyssey, Elysion, and Edix have already been certified as complying with the "pedestrian head protection standard" which will be implemented in Japan as of September 2005.

In the U.S., the Accord Hybrid, equipped with a V6 hybrid engine went on sale this month. This vehicle employs our Variable Cylinder Management system which improves fuel efficiency and reduces greenhouse gas emissions. The Accord Hybrid is Honda's third hybrid vehicle following introduction of the Insight and Civic Hybrid.

As for safety, anti-lock brake systems will become standard equipment for all Honda and Acura vehicles in the U.S. and Canada by the end of 2006, while front side airbags and side curtain airbags will be standard equipment on virtually all Honda and Acura vehicles. In addition, we have begun installing side curtain airbags and roll-over sensors as standard equipment on all light truck models.

Based on ASV-2, announced in 2000, Honda began introducing safety technologies such as a lane-keeping assist control, our Collision Mitigation Brake System, and intelligent night vision in our mass production vehicles. Next year, we will reveal ASV-3, which features even more advanced safety technologies.

Honda's mission is to be the leader in safety and environmental technologies, always looking one step ahead.

kurt_bradley

Good news write-up. Thanks.

Revenent

Hmmmm - nothing about the Euro/JDM Accord getting a change. Which most likely means the TSX won't get anything new either.

I'm out of the loop on Civics - anybody seen the new Civic or what it might look like?

And China-made Hondas - hmmm - I wonder which market they'll serve?

TSX Hokie

Is this the Jazz/Fit?

biker

I think that CR-V diesel will be real popular around here.

Is it a bit of concidence that both the new SUV and CR-V production move to Ohio are at the same time frame?

sauceman

Interesting insight. Thanks for the good post.