Honda Corp's 3-year plan.

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TOKYO, Japan, May 21, 2008 â?? A new 3-year mid-term plan began in April of this year. The basic idea for this 3-year plan is to establish a corporate structure necessary to sustain our strengths and that will enable us to grow globally in the future, and begin such efforts initially under the leadership of our operations in Japan.

Two concrete directions are set as followings;

To create world-leading environmental technologies, bring them to life as products, and offer them to more customers.

To achieve a significant advancement toward the next generation of manufacturing systems which will enable Honda to create such advanced products.

Japan will play a central role. The goal of our efforts will be to mature technologies and products in Japan, which put Honda at the forefront in the area of environment, and evolve them from Japan to the world along with the advancement of our manufacturing systems and capabilities.

Toward this end, various measures will be taken with a focus on the following three core areas;

Strengthening motorcycle business
Innovation of automobile manufacturing in Japan
Hybrid strategy to achieve full-scale market penetration
1. Strengthening motorcycle business
[ Importance of motorcycle business / 50th anniversary of Super Cub ]

Honda began its business with motorcycles, entered into the global market with motorcycles, and established a business foundation which later enabled Honda to enter into the automobile business.

Motorcycle business is the driving force of Hondaâ??s growth and expansion, and it is one of the key strengths of Honda that other automakers do not have.

Honda currently sells more than 13 million motorcycles annually including commuters which provide an essential means of transportation for people in their daily lives as well as recreational large-size motorcycles which provide the joy of riding.

Among such Honda motorcycle products, the Super Cub model that represents Honda is celebrating its 50th anniversary this year.

The Japanese-born Super Cub has maintained its original creative concept and basic style, but has continuously advanced as a model that accommodates the needs and preferences of people in different areas around the world. As a result, the Cub series achieved cumulative worldwide production of 60 million units (as of the end of April 2008).
Demand for motorcycles as a means of transportation is expected to continue to grow mainly in Asian and South American nations. In addition, considering the global high price of crude oil, there is a good chance that motorcycles will be considered not only in developing countries but on a global basis.

Honda will create motorcycle products which reflect the unique characteristics of Honda and exceed the expectations of customers while striving to develop another model which creates a new motorcycle category and market as did the Super Cub.

Strengthening motorcycle production

Toward this end, it is important to strengthen motorcycle production. The new motorcycle plant at Hondaâ??s Kumamoto Factory, which began operating in April 2008, will play a key role.

The goals of the transfer of motorcycle production from Hamamatsu, the birthplace of Honda, to Kumamoto are; 1) to improve efficiency by consolidating production and 2) to strengthen Hondaâ??s ability to build motorcycle products which offer new value with even higher quality.

Moreover, Honda will thoroughly strengthen its manufacturing operations at the starting point in Japan, dramatically enhance its competitiveness, and leverage this enhanced competitiveness to further grow and advance its global motorcycle business.

Production at the new motorcycle plant at Kumamoto Factory will reach its full-capacity in the first half of 2009.

In order to efficiently produce approximately 60 models, from commuters to large-size motorcycles, Honda conceived and built from scratch highly efficient and ideal production lines to accommodate the unique characteristics of each model.

In addition to employing various state-of-the-art equipment, reducing the number of production processes and increased automation are used for mass production models. The new plant will produce motorcycles on three main lines which achieve a high level of human resource efficiency and high flexibility. The new plant also has 15 cell lines where high value added products are assembled completely by a small team of associates.
These cell lines make it possible to build a product with enhanced attractiveness and quality. At the same time, a cell line has a significant benefit in the area of human resource development as it is ideal for the advancement of associatesâ?? skills and sharing of production know-how.

Through these initiatives, including a 20% improvement in workforce efficiency compared to the existing plant, Honda will strive to establish a strong motorcycle production system which will remain highly competitive even if the exchange rate of the Japanese yen to the U.S. dollar is in the 90s.

The new plant also is an environmentally-responsible plant which reduces CO2 emissions by approximately 20% compared to the existing plant through various efforts including utilization of natural energy.

As the leader plant within Hondaâ??s global motorcycle production network, and as a source of Hondaâ??s strength to create products that will exceed the expectations of our customers around the world, Kumamoto Factory will be a driving force of motorcycle business growth in the future.

Strengthening technological and product attributes

In the area of environmental technology, installation of PGM-FI (Hondaâ??s Programmed Fuel Injection) on all scooters sold in Japan is now virtually completed, and PGM-FI will be installed on to all Honda motorcycles sold in Thailand by the end of 2009. Honda plans to install PGM-FI on most of its motorcycles worldwide by the end of 2010.

In the area of safety technology, Honda will install a motorcycle airbag system and ABS (Antilock Brake System) on more products. Honda plans to install ABS in all 250cc or larger class models worldwide, except off-road models, by the end of 2010.

In advancing nations, Honda will introduce a new model, in the most popular 100cc class, which achieves high fuel efficiency, high performance, and low cost. Sales of this new model will begin first in Thailand in summer 2008 and then in other Asian countries.
In advanced nations, Honda will introduce its innovative environmental and safety technologies including a Variable Cylinder Management (VCM) system for motorcycles which significantly improves fuel efficiency as well as electronically-controlled combined ABS (C-ABS), an advanced brake system which further improves stability while braking. Moreover, Honda will improve the product attractiveness of medium-to-large size models and strengthen those aspects of a product which contribute to the joy of riding .

Motorcycle R&D will also be strengthened with a determination and passion to create the Super Cub of the next generation.
 
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