New Honda Aviation Subsidiary 'Honda Aero, Inc.' Begins Operations Near Washington, D.C.

LAS VEGAS, Oct. 12, 2004 -- Honda Aero, Inc., the new aviation subsidiary of Honda Motor Co., Ltd., began operations effective October 1, in Reston, VA, near Washington, D.C., Honda Motor Co. President & CEO Takeo Fukui announced today at the National Business Aviation Association (NBAA) 2004 Conference.

A wholly owned subsidiary of Honda Motor Co., Honda Aero, Inc. is now responsible for Honda's aviation engine business, including such functions as procurement, and preparing Honda's HF118 turbofan jet engine for mass production. Honda Aero also holds a 50 percent share of GE Honda Aero Engines LLC, the new joint venture with General Electric Co. (GE), which was formally established today with the signing of a Joint Venture Agreement. GE Honda Aero Engines will commercialize the HF118 turbofan jet engine.

Honda's research efforts for small jet engines and jet aircraft began in 1986. Development of the Honda HF118 engine, which fits in the smallest category of the business jet engine class, began in 1999. Full-scale flight tests of the HF118 engine have been conducted since December 2003. The HF118 engine is designed for light business jets, a category with an estimated annual market of 150 to 200 units, and where further growth is expected in the future.

Honda and GE, the world's largest jet engine manufacturer, signed a basic agreement on February 16, 2004, to jointly pursue commercialization of Honda's HF118 jet engine. Issues such as marketing strategy, business structure and production have been under discussion.

   About Honda Aero, Inc.
   CEO:                Junichi Araki
   Establishment:      October 1, 2004
   Location:           Reston, VA, near Washington, D.C.
   Capitalization:     Honda Motor Co., Ltd. 100% ($4 million as of
                       October 1, 2004)
   Employment:         Approximately 10 associates
   Business Areas:     Procurement, and production preparations for aviation
                       engine business