Dongfeng Honda to Build Second Plant in China

TULLAMARINE, AUSTRALIA – January 28, 2010: Dongfeng Honda Automobile Co., Ltd., a joint venture of Honda in China, will build a vehicle production plant with lower environmental impact to meet continued growing demand in the Chinese market.

The plant will be built on one million square metres of land four kilometres from the existing plant, within the Wuhan, Hubei Province. It will be Honda’s first plant to generate a portion of its electricity from solar panels produced by Honda Soltec. This will lead to a reduction of CO2 emissions by approximately 500 tons a year. In addition, the new plant aims to achieve a further reduction of CO2 through other measures such as utilisation of natural light and waste heat.

The second Dongfeng Honda plant will be operational mid to late 2012 with a production capacity of 60,000 units. The company’s future production target is 240,000 units. The initial investment will be approximately 1.15 billion R.M.B. (approx. AUD$188 million).

Prior to building the second plant, Dongfeng Honda plans to expand production of its existing plant from the current 200,000 units to 240,000 units in early 2010. Once the second plant begins production, Dongfeng Honda will have a combined capacity of 300,000 units. Flexibility between the two plants will enable Dongfeng Honda to better fulfil the ever diversifying needs of customers in China.

Dongfeng Honda has been producing theCR-Vsince April 2004, the Civicsince 2006 and the Spiriorsince August 2009. The company’s sales continue to grow, with 2009 sales of 211,000 units, up 28.2% compared to 2008, achieving a record high for a fifth consecutive year.

When Dongfeng Honda’s second plant begins production, Honda’s total production capacity in China will reach 710,000 units – 300,000 units at Dongfeng Honda; 360,000 units at Guangzhou Honda; and 50,000 units at Honda Automobile (China), an export production joint venture.