Summary of 2007 Mid-Year CEO Speech
Honda will further accelerate its effort to strengthen the core characteristics that make Honda unique in each business area and steadily make progress within the following areas, which are the three pillars that will enable Honda to make another great leap forward in the future.
1) Strengthening the foundation for global growth
2) Accelerating our effort in
3) Strengthening Honda's effort to reduce its environmental footprint
1. Strengthening the foundation for global growth
Further Strengthening the Business Foundation of North American Operations
• In June 2007, Civic was ranked as the industry's best selling compact-class vehicle in the U.S. Due to strong sales of models such as CR-V and Fit, sales in the
• A new auto plant in Indiana,
• In fall 2007, the Honda auto plant in
• As a result of these capacity expansion measures, in fall 2008, Honda's total annual automobile production capacity in
• In the area of R&D, the Acura Design Studio opened in
• In November 2007, Honda will celebrate the 25th anniversary of manufacturing cars in the
Strengthening European Business
• Honda's automobile sales growth in
• Due to the increase in demand for these UK-made Hondas, Honda's
• In order to meet the higher demand for Honda's diesel engine, the
• Honda's automobile plant in
Expanding Business and Strengthening Business Foundations in Growth Areas: Motorcycle Business
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• Honda has been introducing models equipped with PGM-FI (Honda's Programmed Fuel Injection) which offers excellent environmental performance to one country after another in
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• As a result of these capacity expansion measures, Honda's total annual motorcycle
production in
of 2007.
Expanding Business and Strengthening Business Foundations in Growth Areas: Automobile Business
• Annual production capacity of the existing Honda auto plant in
• A second auto plant in
• In April 2007, an engine parts plant began operation in
• Looking ahead toward expansion of domestic sales and exports, Honda began construction of a second auto plant in
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•
• In April 2007, Honda Automobile (
• A new company, which manufactures transmissions and other powertrain components, became operational in March 2007, contributing to Honda's efforts to promote further localization and improvement of cost competitiveness.
• Sales of the all-new CR-V, which was introduced in April 2007 and is produced by Dongfeng Honda, and the Acura MDX have been strong. Honda is steadily expanding business and strengthening its business foundation in
• Guangzhou Honda Automobile Co., Ltd., a Honda joint venture company in
•
2. Accelerating our effort in
Establishing manufacturing systems and capabilities in
Strengthening R&D Capabilities
• In addition to the reorganization of Honda's R&D structure, conducted in April 2006, Honda will build a new R&D center in Sakura, Tochigi scheduled to begin operation in 2009.
Strengthening
• Honda recognizes that the role of
• New automobile production plant in Yorii (scheduled to become operational in 2010) will establish a high quality and high efficiency manufacturing system by applying the latest technologies and will be responsible for evolving such manufacturing systems horizontally to other Honda operations worldwide.
• New engine plant in Ogawa (scheduled to become operational in summer 2009) will produce advanced engines, which enables Honda to respond to the increasing demand for fuel efficient vehicles and further advance Honda's production technologies.
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Strengthening Mini-Vehicle Business
• Yachiyo Industry Co., Ltd., a Honda consolidated subsidiary has decided to acquire the land adjacent to its
• Although the detailed plans are still to be finalized, the company plans to begin with the establishment of an engine assembly facility, which will enable the company to achieve synchronous production of automobiles including the engine and the complete automobile, which in turn will help the company improve the efficiency of production and logistics.
Establishing A Sales Channel from the Customer Viewpoint
• Based on our starting point of focusing on the customers' point of view, Honda's domestic sales channels were integrated into one Honda Cars channel as of March 2006.
• We are currently making progress in strengthening our sales channels through various initiatives including re-establishing an optimal sales network suitable for a one-channel approach, enlarging the dealership locations in metropolitan areas, and opening of new dealership locations which incorporate the new concept of Honda Cars, etc.
• In the product area, the highly acclaimed Fit, which was ranked as the best selling car among new vehicle registrations in 2002, and has achieved cumulative worldwide sales of 2 million units (at the end of June 2007), will undergo a full model change this fall.
• Coinciding with the introduction of the all-new Fit, Honda will near completion of the changeover of its integrated dealer network to the identity of Honda Cars and establishment of sales network in metropolitan areas by this fall. Honda will work toward strengthening of the Honda brand and devote intensive efforts to expand sales.
• Based on a comprehensive evaluation of the current market environment, Honda will reassess its basic plan and delay the introduction of Acura brand in
3. Strengthening Honda's effort to reduce its environmental footprint
Environmental Commitment
• In May 2006, Honda announced 2010 global CO2 reduction targets for its products and production facilities. Moreover, in June 2007, Honda newly set and announced 2010 environmental footprint reduction targets for business activities in
• As a company-wide effort on a global scale, Honda will accelerate its efforts and be ahead of the time as a company which will always be at the forefront in the area of the environment.
The Next-Generation Environmental Technologies
The Next-Generation Diesel
• Honda will introduce a next-generation diesel engine, which will meet the U.S. EPA's Tier2 BIN5 emission standard requiring NOx emission levels equivalent to a gasoline-powered vehicle, to the
Hybrid
• Honda will offer a new dedicated hybrid vehicle in 2009 at a price level lower than the Civic Hybrid.
Flexible Fuel Vehicle (FFV)
• Honda added a FFV variation to the product lineup of Civic and Fit produced and sold in
Creation of Energy
Ethanol Production Technology
As for the development of technology which will more efficiently produce ethanol from stems and leaves of plants such as straw, an experimental plant was built within Honda's
Cogeneration
Honda's compact home-use cogeneration unit has been used in approximately 50,000 households in
Solar Cell
In June 2007, sales of Honda's solar cells began primarily in the Kanto area. Starting from this fall, Honda Soltec will mass produce solar cells at its plant with annual capacity of 27.5 megawatts at full production, resulting in the expansion of sales throughout
Activity to Promote Traffic Safety / Aviation Business
Renovation of
• The
• The new facility incorporates the latest technologies. One example of such technologies is a new program which records driving data through GPS, analyses the data, and identifies and improves driving habits or common driving practices.
Aviation Business
• Honda Aero Inc,. a wholly-owned subsidiary of Honda, decided to build a production plant for its small-size jet engine, HF120.
• Honda Aero Inc, will produce the jet engine based on the commission from GE Honda Aero Engines, a joint venture with GE. The new jet engine plant will be located in
• In addition to the HondaJet which will be delivered to customers starting 2010, the HF120 jet engine will be installed to the Spectrum Aeronautical "Freedom" which will go on sale in 2010. Honda's dream toward the sky will continue making progress in the areas of both aircraft and the engine.
While continuing to strengthen its business foundation and pursue new dreams for the future, Honda will further accelerate efforts to strengthen the core characteristics that make Honda unique in each business area and demonstrate spirited initiative to take on challenges to develop advanced technologies and products that create new value for the joy of our customers.
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