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February 08, 2010

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Dongfeng Honda to Build Second Auto Plant in China

Dongfeng Honda Automobile Co., Ltd., an automobile production and sales joint venture of Honda in China, announced plans to build an automobile production plant with lower environmental impact in order to meet continued growing demand in the Chinese market.

To build the second plant, the company is planning to acquire one million square metres of land, approximately four kilometres from the existing plant, within the Wuhan, Hubei Province. The new plant will be the first Honda production plant to generate a portion of the electricity used for production processes from solar panels produced by Honda Soltec. The use of solar energy is expected to lead to a reduction of CO2 emissions by approximately 500 tons a year. In addition, the new plant will strive to achieve a significant reduction of CO2 through other measures such as utilisation of natural light and waste heat.

The second Dongfeng Honda plant is scheduled to become operational in the latter half of 2012 with annual production capacity of 60,000 units. The company envisions the future expansion of production capacity to 240,000 units. The initial investment will be approximately 1.15 billion R.M.B. (approximately €120 million*). The new plant will accommodate production processes including welding, painting and assembly and is expected to be an advanced plant utilising production technologies refined at the existing plant, as well as adopting new environmental technologies.

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

Dongfeng Honda has been producing the CR-V since April 2004, the Civic since 2006 and the Spirior since August 2009. The company's sales results have continued strong, 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 overall annual automobile 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 automobile production joint venture.

(Feb 01, 2010)

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