Masaya Nagai President. Ltd.

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1 Masaya Nagai President Honda Automobile (China) Co. Ltd.

2

3 Capitalization Ratio!"#$%% #$%%&'( )''*++, $++- Guangzhou Auto Group Honda Motor Co, Ltd ).*.++ 25% ++ &-+*+++ ( 55% 10% Dongfeng Motor 10% Group Honda Motor (China) Investment

4 Honda Automobile (China) Co.,Ltd. Guangzhou Honda Auto Parts Mfg. (transmission) Guangzhou Honda Automobile Dongfeng Honda Engine Foshan Dongguan Honda Automobile (China) Wuyang-Honda Motors (motorcycle) Guangzhou Honda Automobile Plant2 Honda Engineering (China) Huizhou Nansha Dongfeng Honda Auto Parts (engine parts) Shenzhen Hongkong

5 Welding Painting Test course South Gate Parts Distribution Center Assembly Final Inspection Quality Assurance New Parts Distribution Center New Model Center Customs General Administration East Gate

6 Welding Painting New Pa arts Distribution Center Parts Distribution Center Engine Assembly Assembly General Administration Final Inspection Quality Assurance New Model Center

7 Welding Robots Painting Robots Assembly Line Test Track

8 Honda s small-size size vehicle -- JAZZ / )

9 Shipping Center Staging Area at Xinsha Port Loading onto a car carrier ship

10 March 12, 2003 Signing the joint venture contract Purposes of Honda Automobile (China) To utilize the competitiveness of China (quality/cost) on a global basis Growth potential of domestic market (economies of scale) Availability of highly-skilled people (high quality manufacturing) Local availability of raw materials

11 Increasing Regional Autonomy Thinking globally, acting locally Growth in stages: Sales Production Exports Export history U.S. plant in Ohio began with exports to Japan Thai plant began exporting to Australia

12 7000 0'#18 Soichiro Honda Exporting from China will further improve quality and local production capabilities Positive influence on auto industry in China Selected Germany as first destination within Europe: Challenging competition Demanding customers

13 On-the-Job Training at Guangzhou Honda Training at Suzuka Factory in Japan In-house Training

14 Challenging training program targeting quality exceeding mother plant in Japan Training at Suzuka Plant in Japan and Guangzhou Honda Preparation covered four months after our plant became ready (end of 2004) and before starting mass production (April 2005) to achieve perfect quality Training through disassembly/reassembly of sample vehicles more than 1,000 times Satisfied more than 100 improvement requests from Honda Motor Europe experts Inspecting vehicle loading at the port Assembly training

15 Start of exports to Germany home to some of the world s most demanding customers 9 4 $.*++- #3*++- )#::'

16 To achieve Quality beyond Suzuka CHAC-made Jazz and Japan-made Jazz displayed side-by-side at dealers in Europe Customers make no mention of difference in quality said sales reps at dealers

17 Received high acclaim from European customers Honda Jazz in black is my favorite car. Dealer: Barth, Tübingen, 20 October 2005 What a wonderful day! My new Honda is shining in the bright sunlight! Dealer: Kurth, Forstern, 18 October 2005 I am so convinced about the Honda Jazz that for me no other car comes into question. Dealer: Fugel, Frankfurt, 10 October 2005 My first new car must be Honda because of the perfect quality. Dealer: Schäffer, Göppingen,26 October 2005

18 Honda Automobile (China) Quality Assurance System Dealer Network Honda Motor Europe Honda Automobile China Honda Motor Japan Quality Control Quality assurance system linking Europe, China and Japan Quality control rules based on Honda s Global Standards

19 Norway Sweden Finland China-made Jazz Export destinations Ireland U.K. Denmark Estonia Latvia Lithuania Belarus Russia number of destinations is increasing due to high acclaim from the market Holland Belgium Germany Poland Portugal Spain France Czech Slovakia Austria Switzerland Hungary Slovenia Italy Croatia Bosnia Moldova Romania Bulgaria Macedonia Ukraine Jul. 13 countries Mar.2007 Apr countries Jan countries Oct countries Jun countries 4 - countries Jul countries Aug.2007-

20 Production start-up of right-hand hand drive variation (for U.K. market) April 2, 2007 First right-hand drive vehicle rolling off our production line

21 April 2007 Began operating at full capacity of 200 units/day June 2007 Cumulative production reached the 50,000-unit milestone ++; ++< Production = 11,000 units Export = 10,000 units Production = 25,000 units Export = 25,000 units Production = 43,000 units Export = 43,000 units (units/day) units/day 5 5) #-*++< 5 -+*+++ (units) units/day $,*++< = ++ -+*

22 Contributing to the growth of the automobile industry in China Model case of exporting for advanced automobile nations Exporting to European nations such as Germany, France, and the U.K. Contribution to China s export and foreign currency earnings 2007 Passenger Cars exported from China Total 266,163 units Honda Automobile (China) 43,124 units (16.2%)

23 Quality WVTA (EU s unified type certificate [cars/plant] ISO9001 (quality control) Production Safety OHSAS18001 (Occupational health and safety) Environmental Protection ISO14001 (Environmental management) Complying with European laws and regulations regarding environmental protection and ban on hazardous substances

24 Thank You

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