Move Will Match Flexible Manufacturing Capacity to Market Demand

Torrance, Calif. 10/23/2006 -- Honda will enhance its ability to match flexible manufacturing capacity with market demand in a move that will make it possible to increase North American production¹ of fuel efficient 4-cylinder Civic models in early 2007 by up to 60,000 units on an annual basis.

The most fuel-efficient car company in America², Honda is striving to meet demand for its popular 4-cylinder passenger cars in a timely fashion, since higher fuel prices rekindled consumer interest in fuel economy. Key components of the plan include:

• From February 2007, production of Pilot sport utility vehicles in Canada will be gradually shifted to Honda's Lincoln, Alabama plant. This will return the Alabama plant's production to a full annual capacity of 300,000 vehicles and engines and will make it the sole source for both Pilot and Odyssey models after the shift.
• From April 2007, production of Civic Sedan models will be added for the first time to Honda's Plant 2 in Alliston, Ontario, Canada, which has produced only light truck models since opening in fall 1998. Plant 1 in Canada already builds Civic Sedans and Coupes. The added Civic production will not impact the plant's current production capacity of 390,000 units.

"We have been challenged to keep up with record customer demand for our lineup of fuel efficient cars and trucks, "said Dick Colliver, executive vice president of American Honda Motor Co, Inc. "Our flexible production system is a wonderful tool that enables Honda to better meet the demand of our customers and dealers in an efficient and timely way."

Sales in the U.S. of the hot Civic lineup are up 7.1% through September 2006, over 2005, while overall passenger car sales (up 3.9%) and light truck sales (up 8.2%) are leading American Honda toward a 10th consecutive annual sales record and a 13th straight year of increasing sales.

As previously announced, Honda has added production this year of two light truck models at its Ohio auto plants. Honda's East Liberty Plant in Ohio began production of the all-new 2007 Honda CR-V in September, and the Marysville Auto Plant began producing the all-new Acura RDX in July, after building only passenger cars since opening in 1982. Increasing production of the Civic will strengthen Honda's passenger car production in North America and further its ability to meet strong customer demand in a timely manner.

Currently, Honda builds Civic models at two North American plants - the East Liberty Plant and the Alliston Plant. Over the past few months, both plants have added overtime production in an effort to meet customer demand.

Further, on June 28, Honda announced plans to increase its North American capacity to by an additional 200,000 units with the construction of an auto plant near Greensburg, Indiana for the production of 4-cylinder vehicles and a 200,000-unit engine plant in Canada to build 4-cylinder engines. These plants are scheduled to begin operation in 2008.

Honda began operations in the U.S. in 1959 with the establishment of American Honda Motor Co., Inc., Honda's first overseas subsidiary. Honda began U.S. production operations in 1979. Honda has invested more than $8.5 billion in its North American operations with 14 major manufacturing plants, employment of more than 33,000 associates and the annual purchase of more than $16 billion in parts and materials from suppliers in North America. Nearly 8 of 10 Honda and Acura cars and light trucks sold in America are produced in North America.

¹ Honda products are produced using domestic and globally-sourced parts
² Based on model year 2005 CAFE ratings and weighted sales for passenger car and light truck fleets sold in the U.S. by major manufacturers