honda honda update update 200 200 9 9

1

HondaHonda UpdateUpdate 20020099

CR-Z Concept

1. Strengthening Advanced Environmental Technologies

2. Advancement of Motorcycle Business

3. Advancement of Automobile Business

Honda Direction and Key Challenges

2

3

500,000units

Annual global sales target(beyond 2010)

Civic Hybrid 2nd Generation 2005 2009 2010

3rd Generation Insight

CR-ZFIT/Jazz Hybrid

Hybrid models： Honda recognizes hybrid technologies as the mostrealistic path for CO2 reduction at this time

a lightweight and compact 1.3-liter engine with a motor

Integrated Motor Assist (IMA) systemＣＶＴ

path of drive force

path of an electronic force

Motor Engine

BatteryInvertera lightweight and compact

1.3-liter engine with a motor

Integrated Motor Assist (IMA) systemＣＶＴ

path of drive force

path of an electronic force

Motor Engine

BatteryInverter

INSIGHT Early 2009 Launched in U.S., Japan and Europe Excellent Fuel Economy ---- 41mpgLess CO2 ---- 101g/kAffordable Price ---- $19,800～

Strengthening Advanced Environmental Technologies

Enhancement of hybrid vehicle lineup

- Development of hybrid system forwith medium to large-size vehicles

- Establishment of Blue Energy Co., Ltd., joint venture with GS Yuasafor lithium-ion batteries for hybrid vehicles


4

Blue Energy Osadano Plant in Kyoto, JapanProduction start in Fall 2010

Applying PGM-FI (fuel injection) system to all models in Thailandby the end of 2009

Redesigned Wave 110 series with PGM-FI is a new Asian core-platform model; – 18% performance improvement– Improved fuel efficiency; 18% mileage improvement– Significant reduction in cost and development time

Honda to develop and market Electric Motorcycle around 2010

– Targeting Zero CO2 next generation transportation – Launching in 2 years time


5





6

7

Maintaining strong position particularly in markets with high potential

Advancement of Motorcycle Business

0

100

200

300

400

500

600

700

0 .9 1 .2 1 .1 1 .5

3 .2

2 .9

77%

69%66%

46%

60%

0

12

3

4

56

7

8

India Indonesia Vietnam Thailand Brazil0%

25%

50%

75%

100%Subsidiary Joint VentureOther Market Penetration

( Million Units )

Source: Honda

Honda’s Market Penetration

Penetration Rate (per capita) of MotorcyclesGDP per capita (U.S.$)

(JETRO 2007)

CY2008 Unit Sales

59.5%25.3%

23.6%

14.8%5.9%

4.6%

400 500 1,2001,1003002001000 (millions)

Population (millions)

Units in operation (millions)

*As of 2007*Indonesia as of 2006*India as 2005

Taiwan$16,697

Thailand$3,732

Vietnam$828

Indonesia$1,925

Brazil$6,938

India$941 1 unit for 21.7 people

1 unit for 16.9 people





8

5.8

7.6

9.0 9.2 9.6

11.1

0.8

0.8

1.01.2

1.5

1.7

0

2

4

6

8

10

12

14

16

2003 2004 2005 2006 2007 2008


Honda Motorcycle Sales Growth (2003 to 2008)Unit

(millions)

Asia

China

South America

North AmericaJapan

Europe

Growth centered in Asia and South America

15. 038

90

5

10

15

FY 01 02 03 04 05 06 070%

10%

20%

30%

40%

50%


Super Cub series, a big hit for 50 years, continues as a Honda strength

Biz （Brazil）Super Cub (Japan)Revo （Indonesia）Wave110 （Thailand）

Honda Motorcycle Production Unit of cub series produced in 2008Total unit producedRatio of cub series

Unit （millions）

– Global Production of Cub Series has reached 60 Million Units– Honda Cub Series sells more than 3 million units a year worldwide– Cub Series achieves high profitability with production efficiency and strong brand

image

Not a performance bike, but meets everyday customer needs





10

11

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Unit: thousands

Others

Accord

Civic

CR-V

Fit/Jazz/City

- Unit Sales of Honda’s Global 4 Models ＋１（Hybrid Models）

Source: Honda

Accord Fit/Jazz Civic CR-V

Growth of global models makes Honda competitive and efficient

76%

58%

Advancement of Automobile Business

500,000units

Annual globalsales target

(beyond 2010)

- Growth of Hybrid Models

Insight

12

- Current Fit model demonstrated that sourcing from Asia contributed to significant cost reduction

160K

220K

270K

As volume grows, Thai and China J/V ship more cost competitive FIT / City

components to Japan

- Current Fit attained cost reduction compared to previous model(Including City)

Previous

Global Common Design and Global Purchasing Network


Current FIT Current City

13

AllistonAlliston

Light TrucksPassenger cars

440440

OhioOhio

Line 2

195

Line 2

195

Line 1

195

Line 1

195Canada Canada

AlabamaAlabama

240240

MarysvilleMarysville

East LibertyEast

Liberty

U.S.U.S.

LincolnLincoln

IndianaIndiana 100100GreensburgGreensburg

Location AnnualCapacity

CSX

Small Middle Luxury Crossover Pickup Van

5050Mexico Mexico El SaltoEl Salto

Line 2

150

Line 2

150

Line 1

150

Line 1

150

Importfrom Japan

Importfrom Japan

Element

OntarioOntario

Flexible model allocation to optimize capacity utilization

TL RDX

Civic

Civic

Civic

Civic

Pilot

Accord

Accord

AccordSedan V6

CR-V

CR-V

CR-V

Ridgeline

Ridgeline Odyssey

Odyssey

MD-XCivic

Mid 2009


ZD-X

FITFIT（（US modelUS model））

Mature flexible production system to enable Honda to get through anticipated future changes with minimal impact

STREAMSTREAM


- Production of the Stream was transferred from Suzuka Factory to SaitamaFactory in January 2009

- Production of the U.S. and Canada version of the Honda Fit startedin Saitama Factory from May 2009 in addition to Suzuka Factory

■■ SaitamaSaitama

SuzukaSuzuka ■■

14


- Revision of CAPEX for expansion

- Revision of R&D activities and expenses

Yorii Assembly plant

Discontinue NSX successor model with V10 engine

Sakura R&D Center Yachiyo Industry new mini-vehicle plant

Withdrawal of Acura brand launch for Japan market

- In order to minimize the impact of recent changes in the businessenvironment and to focus company resources on necessary areas,All investments and development projects were reviewed.

Withdrawal from F1 and focus on environmentaltechnologies

Reallocation of CAPEX and R&D expenses

15

50%

50%

YoriiAssembly Plant

2012～

Yachiyo IndustryNew Mini-vehicle Plant

2011～

SakuraR&D Center

2010～

69%

50%

50%

YoriiAssembly Plant

2012～

Yachiyo IndustryNew Mini-vehicle Plant

2011～

SakuraR&D Center

2010～

69%

627654

599

390

361

417 408380

0

100

200

300

400

500

600

700

FY07 FY08 FY09 FY10(P)

CapitalExpendituresDepreciation

Capital Expenditures & Depreciation

Cost StructureReform

In market deterioration due to the financial crisis, our goal is for business to be in the black in FY10 based on cost structure reforms

Operating income

189.6

Operating income

10.0

CurrencyEffect

- 193.0

Revenue, model mix,

etc.

- 334.8 Cost Reduction, etc.

- 39.0

Decrease

in SG&A

+ 339.0

Decrease in R&D

+ 48.2

Yen (billions)Operating Income - 179.6 bn. yen ( - 94.7 %)

Cost StructureReform

-Effects of cost reductions, etc

+30B yen

Cost Structure Reform-Reducing sales incentive, etc

+50B yen

- Total Amount of Cost Structure Reform Approx. 250B yen

- Targetingbusiness

in the black

16

FY09 FY10

Cost Structure Reform-Decrease in quality related expenses-Withdrawal from some racing activities-Revision of expenses, etc

+125B yen

1. Honda global business environment

2. North America

3. Japan

4. Europe

5. Asia

6. Other Regions

Industry and Major Market Outlook

17

Honda motorcycle sales up by 30% in April in India

Honda UK plant shut down from Feb to May

Russia auto sales down by 54% in April

Lack of consumer confidence

Auto sales down by 12% in Western Europe in April

Scrap incentives will start in U.K. from May

April SAAR 9.3Ｍ

Monetary measures “TALF”

Used vehicle prices recover since end of 2008

U.S. unemployment rate remain high -- 8.9% in April

Gas price stable around $2

IPI tax cut extended until JuneBrazil auto sales down by 6% in April

Tax cut program for Eco-vehicle started from April

Honda announced voluntary separationopportunity in America

FY10 auto demand forecast 4.3mill (JAMA)Auto sales down by 23% in April

Auto sales increased 20% in Germany due to scrap incentives in April

Auto sales increase approx. 30% in China

Brazil motorcycle sales downby 16% in April

Interest rate cut down 7.25% in Indonesia

Motorcycle sales in April down 30% in Indonesia.

2009 auto demand forecast over 10mill units

Chrysler began Chapter 11 bankrupcy procedures

Honda Insight No.1 sales in April in Japan(registered car segment)

Palm oil price raise in Indonesia for 5monthPreferential vehicle purchase tax cut (below 1.6L) from 10% to 5% in China

Japan

South America

North AmericaEurope

Asia

Honda Global Business Environment

63.1156.3116.097.0128.4118.295.7114.4

-107.4

94.5 22.5 70.0

-15.7%

4.3%

9.5%7.5%

6.7% 6.1%7.7%7.3%7.8%

6.3%

1.6%

5.7%

-150

-100

-50

0

50

100

150

FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q-16%

-12%

-8%

-4%

0%

4%

8%

12%

16%

Yen (billions)

Operations in North America

4Q operating income in North America down due to sluggishsales in U.S., increase in fixed cost and higher yen

19

20

0

5,000

10,000

15,000

20,000

CY03 04 05 06 07 08 09(E)

Passenger CarsLight Trucks

Unit(thousands)

0

500

1,000

1,500

2,000

CY03 04 05 06 07 08 09(P)

Passenger CarsLight Trucks

Source: Honda

Industry Demand Honda Unit SalesUnit

(thousands)

1,349 1,394 1,462 1,50916,14816,831 16,88416,652 16,556

1,551

(aggregate numbers of Honda brand and Acura brand)

13,3001,428

Source: Honda

Production capacity & flexible lines New Indiana plant , New Canadian Engine plant started productionAccord V6 will be produced in Alabama plant

Innovative technologies to achieve CAFE Leadership

( 10,500 )

Fit (Aug 2008)Pilot (May 2008)Acura TSX (May 2008) FCX Clarity (Jul 2008)

Major Markets – Honda Automobile Business in U.S.

Operations in North America

Strategy in N.A Market

Acura TL (Sep 2008) Insight (Mar 2009) Acura ZDX (Fall 2009)

※Retail Sales ※Retail Sales

2.3

56.273.360.668.241.968.948.9

-176.0

37.9 40.9

-64.3

-23.8%

0.2%

4.5%6.0%5.9%5.2%5.4%

3.4%4.4%3.3% 3.4%

-6.0%

-200

-150

-100

-50

0

50

100


-18%

-12%

-6%

0%

6%

12%Yen

(billions)

4Q operating income in Japan down by higher yen anddecrease in revenue and model mix change, etc

Operations in Japan

21

22

Enhancing product line up with efficiency- Strengthen Hybrid model- Cost reduction by using global purchasing network

Enhancing sales network- Enhancing sales and marketing function for hybrid vehicles- Improving stability of consolidated sales subsidiaries

0

2,000

4,000

6,000

CY03 04 05 06 07 08 09(E)

Registered vehicle

Mini

Source: Honda

Industry Demand Honda Unit Sales

0

100

200

300

400

500

600

700

800

900

FY04 05 06 07 08 09 10(P)Source: Honda

Mini

Small

Minivan

Others

Unit(thousands)

Unit(thousands)

732 717 710 720

580

640

(572)5,082

5,829 5,855 5,854 5,7395,354

Accord (Dec 2008) Insight (Feb 2009)

FREED (May 2008) Odyssey (Oct 2008) Life (Nov 2008)

FCX Clarity (Nov 2008)

Mature Markets - Honda Automobile Business in Japan

Operations in Japan

Strategy in Japan Market

※Retail Sales※Retail Sales

**

**Apr.09-Mar.10

18.65.816.710.312.63.79.06.4

-10.5

11.2 8.3 1.1

-4.0%

4.2%

1.6%

4.3%

2.9% 2.6%

2.9%

1.4%2.0%

3.1%

2.4%

0.4%

-15

-5

5

15

25


0%

5%

10%

Operations in Europe

4Q operating income in Europe (including Russia)down, due to sluggish sales in Western Europe

Yen (billions)

23

24

Industry Demand（EU15+EFTA）

(excluding commercial vehicles)

Honda Unit Sales（EU15+EFTA）

0

5,000

10,000

15,000

CY03 04 05 06 07 08 09(E)

PetrolDiesel

Unit(thousands)

0

50

100

150

200

250

300

350

CY03 04 05 06 07 08 09(P)

Civic

Accord

Jazz

CR-V

Unit(thousands)

Source: HondaSource: Global Insight

232Others

13,558

194

256272 280

220

Accord (Jun 2008)

Insight (Mar 2009)Jazz (Oct 2008)

Strategy in Western Europe Market

Environmental strategyLow CO2 emission models; Insight 101g/km, Jazz 125g/km

Flexible Production Lines and Production Allocation Jazz production starts at UK plant within 2009

Operations in EuropeMature Markets - Honda Automobile Business in Western Europe

※Retail Sales ※Retail Sales

21.938.333.436.919.220.218.219.4

-6.3

48.3 33.4 24.9

-1.9%

5.3%

9.3%

8.0%

5.8%

9.4%

5.2%

6.7%6.8%

11.6%

8.4%

6.5%

-10

0

10

20

30

40

50


-1%

1%

3%

5%

7%

9%

11%

13%

15%

Operations in Asia

Operating income in Asia exceeded 100 billion in FY09with auto and motorcycle growth

Yen (billions)

25

26

0

5,000

10,000

15,000

20,000

25,000

CY03 04 05 06 07 08 09(E)

India Indonesia Thailand Vietnam

Industry:Unit ( thousands )

Source: Honda

Industry Demand in Major Asian Motorcycle Markets

(18.3mil)

Operations in Asia

(7.4mil)

(6.5mil)

(1.7mil)

(2.7mil)

(7.4mil)(7.8mil)(6.8mil)(6.0mil)(5.4mil)

(4.9mil)(4.6mil)(5.1mil)

(3.9mil)

(1.6mil)(1.9mil)(2.1mil)

(2.0mil)

(2.9mil)(2.4mil)(1.8mil)

(1.4mil)

(1.3mil)

(2.8mil)

(1.8mil)

※Wholesale

0

2,000

4,000

6,000

8,000

10,000

CY03 04 05 06 07 08 09(E)

27

Other brandsHero Honda Honda Motorcycle & Scooter India

Industry: Unit (thousands)

Source : Honda

In India, motorcycle business foundation solidified behindtwo companies, Hero Honda and HMSI

Principal models of Honda Motorcycle & Scooter India

Splendor NXG

Principal models of Hero Honda Motors Limited

Passion+ CBF Stunner

(979)

(3,516)

Operations in Asia

ActivaFMC Apr. 09 Debut in June. ‘08Debut in May. ‘07 Debut in May. ‘07

Super SplendorDebut in May. ‘07

※Wholesale

28

0

200

400

600

800

1,000

1,200

1,400

CY03 04 05 06 07 08 09(E)


Source : Honda

Steady Growth of Honda Motorcycle & Scooter India (HMSI), a subsidiary of Honda in India

Principal models of HMSI

Debut in June. ‘08

CBF StunnerAviatorDebut in Feb. ‘08

(979)

ActivaFMC Apr. 09

Operations in Asia

※Wholesale

29

0

1,000

2,000

3,000

4,000

5,000

6,000

CY03 04 05 06 07 08 09(E)

Added annual production capacity in Sep. 2005 (2,000 → 3,000 thousand units)

Other brandsHonda

Source: Honda


Principal models

Continuously introducing innovative productsto the Indonesian motorcycle market

(2,875)

Revo110cc

FMC Jan.09

Operations in Asia

CS1125cc

Debut Apr. 08

BeAT110cc

AT ModelDebut Jun. 08

Blade110cc

Debut Dec.08

※Wholesale

30

0

500

1,000

1,500

2,000

2,500

3,000

3,500

CY03 04 05 06 07 08 09(E)

Other brandsHonda

Source: Honda


Principal models

Honda to enhance product pipeline for Vietnamese motorcycle market

(1,247)

Operations in Asia

Click110cc

AT ModelDebut Oct. 06

Future Neo FI125cc

Fuel InjectionDebut Apr 07

Air Blade110cc

AT Model Debut Apr 07

Wave S 100cc

Debut May 07

Wave α100cc

ＭＭＣＪｕｌ 08

※Wholesale

31

0

50

100

150

200

250

CY03 04 05 06 07 08 09(P)

Malaysia Thailand

Indonesia Philippines

0

500

1,000

1,500

2,000

2,500

CY03 04 05 06 07 08 09(E)

Malaysia Thailand

Indonesia Philippines

Source: Honda

Honda Unit SalesUnit (thousands)

Industry DemandUnit (thousands)

Source: Honda

123

156148

138146

Optimal allocation to enhance production efficiency

Production of FREED in Indonesia starting in June 2009

Enhance complementary approach in ASEAN region

Strengthening of purchase function to flexibly consolidateand re-allocate

1901,892

Freed (Jun 2009) Jazz (May 2008) City (Sep 2008)

Strategy in Southeast Asian Market

Honda Automobile Business in Southeast AsiaOperations in Asia

※Wholesale ※Retail Sales

32

0

20

40

60

80

CY03 04 05 06 07 08 09(P)

213 242 244 294 299 264

299362 357

425521

531

249

303

302 405

195

135

0

500

1,000

1,500

CY03 04 05 06 07 08 09(E)

Premium

"A"

800cc

Industry Demand(excluding commercial vehicles, SUV and MUV)

Unit (thousands) Unit

(thousands)

Honda Unit Sales

City

Accord

Civic

Source: Honda

CR-V

Category

Source: Global Insight

15

3540

55

6153

Established 2nd plant (parts) in Sep 2008to supply body panels and engine components to the 1st plantto export engine components to Asian countries

Introduce Jazz in India in mid 2009to enjoy excise duty benefit for small-sized car

1,200

City (Nov 2008) Jazz (Mid 2009)

Operations in AsiaHonda Automobile Business in India

Strategy in India Market

※Wholesale ※Retail Sales

Operations in Other Regions

32.731.730.121.719.516.021.415.2 32.721.7 48.7 41.8

4.1%

10.4%11.2%11.3%10.9%

9.6%

8.4%8.3%8.6%

12.4%

14.0% 13.8%

0

10

20

30

40

50

FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY09 1Q 2Q 3Q 4Q0%

5%

10%

15%

Operating income in Other regions in FY09 centers on Brazil to grow

Yen (billions)

33

34

0

500

1,000

1,500

2,000

CY03 04 05 06 07 08 09(E)

Other brandsHonda

Source: Honda


Principal models

Solid operation as a market leader in Brazilian motorcycle marketIntroducing PFM-FI (Fuel Injection) models to meet Euro3

Exceed one million units per year(1,459)

CG 150 TitanCG 125 FAN Biz 125CG 150 Titan Mix

Flex FuelDebut Mar 09


※Wholesale

0

20

40

60

80

100

120

140

160

180

200

03 04 05 06 07 08 09(P)0

1,000

2,000

3,000

CY03 04 05 06 07 08 09(E)

Unit (thousands)

Unit (thousands)

Source: HondaSource: Global Insight

32

5057

67

Brazil

86

Confidential

118

( Flexible Fuel Vehicle)( Petrol Engine Vehicle)

2,671

FFV

2,377

1,844

1,6181,532

1,339

35

Expansion of production capacityBrazil: Expand capacity to 120,000 units in Aug 2008

Environmental strategy(FFV->Brazil)

Fit FFV (Nov 2008) Civic FFV

Strategy in South America Market

Honda Unit SalesStrong sales of FFV models contributed to growth

Industry Demand(including commercial vehicles)


Honda Automobile Business in Brazil

※Retail Sales※Retail Sales

FY 09 4Q Results- Outline

- Business Segment Information- Profit Analysis

FY 10 Forecasts

Dividend per Share

Financial Highlights

36

37

EPS (Yen) 330.54 75.50 - 77.2%( - 255.04 yen)

Note : Shares which are based on calculation of EPS

approx.1,815,356,000 shares


Outline of FY09 Twelve Months Financial Results (Consolidated)

Unit (Sales)FY09 Twelve Months

FY08 FY09 Change

Motorcycles 9,320 10,114 + 8.5%

Automobiles 3,925 3,517 - 10.4%

Power Products 6,057 5,187 - 14.4%

Financial resultsFY09 Twelve Months

FY08 FY09 ChangeNet sales & other operating revenue 12,002.8 10,011.2 - 16.6%

Operating income 953.1 189.6 - 80.1%

Income before income taxes 895.8 161.7 - 81.9%

Equity in income of affiliates 118.9 99.0 - 16.7%

Net income 600.0 137.0 - 77.2%

US Dollar 114 101 Yen up by 13 yen

Euro 162 142 Yen up by 20 yen

Average Rates (Yen)

Yen（billions）

Major Change Factors

Business Environment

(weighted average number of shares outstanding )


Unit (thousands)

Motorcycle market

Automobile market

Unit SalesMotorcycles:

Automobiles:

Power Products:

Net sales & other operating revenue

Operating income

<Decrease Factors>

<Increase Factors>

Crude oil and raw material prices rose significantly worldwide in the first half, then declined in the second half. The economy in the U.S. and Europe deteriorated caused by the financial crisis. A further downturn due to the negative economic cycle is feared. In China and India, economic growth slowed down in the second half.In Japan, both capital expenditures and consumer spending declined, and the economy is rapidly deteriorating Yen appreciation against the U.S. dollar and Euro

Demand in the U.S declined significantly Due to strong sales in the first half, industry-wide sales volume in Brazil, India and Thailand maintained YOY despite reduced sales in the second half

Demand in the U.S., Western Europe and Japan declined significantly in the second half. Overall market size was increased in Brazil, China and India despite a temporary decline in demand.

Asia and other regions including Brazil contributed to gain in operating profit, offsetting deterioration in major markets.

Decline due to lower sales volume of automobiles and power productsNegative currency translation effects

Increases in Asia and “Other” Region, which includes Middle East Decreases in North America, Europe and Japan

Favorable sales in Asia and Other Regions, which includes BrazilDecreases in North America, Japan and Europe

Strong sales in Asia and BrazilDecreases in North America, Japan and Europe

Decrease in revenue and model mix change, etc.Increased raw material costsIncreased fixed cost due to production cutCurrency factors

Effects of cost reductionDecrease in R&D

Change in Income before Income Taxes < FY09 Twelve Months >

FY08 12 Months

Yen （billions）

FY09 12 Months

895.8

161.7

- 247.7

- 182.5

- 88.3+ 24.7 - 269.5

+ 85.7 - 56.4

Operating income

953.1Operating

income

189.6

Revenue, model mix, etc.

Cost Reduction, the effect of raw

material cost , etc. Decrease in R&D

Currency Effect Fair value of derivativeinstruments

Others

Increase in SG&A

Income before Income taxes - 734.1 bn. yen (- 81.9%)

Operating Income- 763.4 bn. yen （ - 80.1 % ） Other Income &

Expenses+ 29.3 bn. yen

<Increase Factors>• Change in pricing for the new model year• Decrease in sales incentives for North America automobile business

<Decease Factors>• Decline in profit attributable to lower unit sales•Model mix impact, etc.

<Increase Factors>• Effects of cost reductions, etc.<Decease Factors>• Impact of increase in raw material prices• Increase in fixed cost due to production cut , etc.

<Increase Factors>• Decrease in quality related expenses , etc.<Decease Factors>• 0ne-off expenses related to withdrawal from some racing activitiesand cancellations of new model developments

• Increase in provisions for credit loss and residual loss , etc.

Currency effect due to difference between average rates and transaction rates: +33.0 bn. yenInterest rate swap cost, etc. ： - 89.4 bn.yen

<Currency Effects >Impact on Operating income - 269.5 bn. yen (due to difference of average rates and translation effects)Impact on Other income & expenses + 33.0 bn. yen (due to difference between average rates and transaction rates)Impact on Income before income taxes - 236.5 bn. yen (see also Exhibit 1)

(Exhibit 2)

38

EPS (Yen) 14.01 - 102.59 -( - 116.60 yen)

Note : Shares which are based on calculation of EPS



Outline of FY09 4th Quarter Financial Results (Consolidated)

Unit (Sales)4Q Results

FY08 FY09 Change

Motorcycles 2,368 2,002 - 15.5%

Automobiles 1,051 680 - 35.3%

Power Products 2,092 1,531 - 26.8%

Financial results4Q Results

FY08 FY09 ChangeNet sales & other operating revenue 3,055.5 1,783.8 - 41.6%

Operating income 168.8 - 283.0 －

Income before income taxes 146.8 - 309.5 －

Equity in income of affiliates 24.3 2.7 - 88.7%

Net income 25.4 - 186.1 －

US Dollar 106 94 Yen up by 12 yen

Euro 158 121 Yen up by 37 yen

Average Rates (Yen)

Yen（billions）



Unit (thousands)

Major Change Factors

Business Environment

Motorcycle market

Automobile market

Unit SalesMotorcycles:

Automobiles:

Power Products:

Net sales & other operating revenue

Operating income

<Decrease Factors>

<Increase Factors>

Decreased unit sales in all the regions



Financial crisis and deterioration of real economy led the U.S. and Europe recession to deepen and become more serious. Japan economy deteriorated rapidly due mainly to a decline in exports.Pace of economic expansion has further slowed down in AsiaYen appreciation against the U.S. dollar and Euro

Steep deterioration not only in the U.S. but in Thailand and IndonesiaDemand in India has recovered from the previous quarter.

Steep downturn in the U.S., Japan and Western EuropeDemand in Russia continued to decline largely.Expanding markets in India, Brazil and China

Honda earned operating profit for the fiscal year, however it posted operating loss in the 4Q due to decreased volume in all businesses under rapid market deterioration.

Decline mainly due to decreased unit sales of automobilesNegative currency translation effects

Decrease in revenue and model mix change, etc.Increased fixed costs due to production cutIncreased raw material costsCurrency factors

Effects of cost reductionDecrease in SG & A

39

Change in Income before Income Taxes <FY09 4ｔｈ Quarter>Yen

（billions）

146.8

-309.5

- 357.9

- 107.9

+ 21.5 + 19.3 - 26.8- 7.6 + 3.0

Revenue, model mix, etc.

Cost Reduction, the effect of raw

material cost , etc.

Decrease in R&D Currency Effect Fair value of derivativeinstruments

OthersDecrease in SG&A

FY09 4QFY08 4Q

Operating income

168.8

Operating income

-283.0

Income before Income taxes - 456.4 bn. yen

Operating Income - 451.8 bn. yen Other Income

& Expenses

- 4.5 bn. yen

<Increase Factors>• Decrease in quality related expenses• Decreased expenses for advertising, sales promotion, etc.<Decease Factors>• 0ne-off expenses related to withdrawal from some racing activitiesand cancellations of new model developments , etc.

<Increase Factors>• Effects of cost reductions, etc.<Decease Factors>• Increase in fixed cost due to production cutImpact of increase in raw material prices,

etc.

<Increase Factors>• Change in pricing for the new model year, etc.

<Decease Factors>• Decline in profit attributable to lower unit sales •Model mix impact, etc.

<Currency Effects >Impact on Operating income - 26.8 bn. yen (due to difference of average rates and translation effects)Impact on Other income & expenses +12.4 bn. yen (due to difference between average rates and transaction rates)Impact on Income before income taxes - 14.4 bn. yen (see also Exhibit 1)

Currency effect due to difference between average rates and transaction rates: +12.4 bn. yenInterest rate swap cost, etc. ： - 9.3 bn.yen

(Exhibit 2)

40

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Motorcycle Unit Sales (Motorcycles + All-Terrain Vehicles, etc.)Unit

(thousands) FY09 4QChange from

FY 08 4QMajor increase/decrease factors

Japan 51 - 15- Increase of leisure model such as Monkey- Decrease in sales of scooters such as TODAY and

FORZA

North America 72 -78 - Decrease of sports bikes such as CBR1000RR and

custom bikes such as VTX1300C

Europe 71 - 18 - Increase of scooters such as SH150 in Italy- Decrease of scooters such as SH125 in Spain

Asia 1,449 -168 - Increase of Unicorn、Shine in India- Decrease of Wave、CLICK in Thailand

Other Regions 359 -87 - Increase of CG125 in Brazil

- Decrease of CG150 TITAN, BIZ125 in Brazil

Total 2,002 -366

* Unit sales is the total of sales of completed products of Honda and its consolidated subsidiaries and sales of parts for Honda’s affiliates accounted for under the equity method.

371

1,623958084

2,253

Approx 1,100 Approx 1,020

392

1,64568

121107

2,333

- 366（ - 15.5% ）

Approx 1,160

401

1,74861

10254

2,366446

1,61789

15066

2,368

Approx 1,280

436

2,050918058

2,715

Approx 1,210

4Q3QFY09FY08FY09FY08

12 Months12 Months1Q 2Q4Q3Q2Q1Q

1,610

6,633

313453311

9,320

Approx 4,580

509

2,146669379

2,893

Approx 1,260

+ 794（ + 8.5% ）

1,763

7,523

276320232

10,114

Approx 4,700

459

1,878487544

2,504

Approx 1,110

3591,449

71

51

2,002

72

Unit sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its subsidiaries

AsiaEurope

Other Regions

JapanNorth America

Approx 1,100

Unicorn (India)

Monkey (Japan)

41

Motorcycle Business Net Sales/Operating Income/Operating Margin

Yen(billions)

Operating Margin

Operating Income



1,411.51,558.6274.4342.8401.0393.0444.0364.6381.6368.3Net Sales

12 Months12 Months4Q3Q2Q1Q4Q3Q2Q1QFY09FY08FY09FY08

Yen(billions)

- 2.8

25.2

46.3

31.1

52.7

30.337.031.1

151.2

99.9

- 1.0%

7.4%

11.6%

9.7%7.9%

11.9%

8.3%8.5%9.7%

7.1%

-20

0

20

40

60

80

100

120

140

160

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

<Increase Factors>• Effects of cost reduction, etc.<Decrease Factors>• Increase in raw material costs,• Decrease in revenue and model mix change, etc.

( - 34.0% )

（- 38.2%）（- 9.4%）

42

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

43

Unit(thousands) FY09 4Q Change from

FY 08 4Q Major increase/decrease factors

Japan 141 - 50 - Increase of FREED, INSIGHT, etc.- Decrease of FIT, etc.

North America 219 -240 - Increase of FIT, etc.

- Decrease of Accord, Civic, CR-V, etc.

Europe 103 - 6 - Increase of Civic and CR-V in Russia- Decrease of CR-V and Civic in the U.K., Spain and Italy

Asia 151 -52- Decrease of component parts for China (Accord and

CR-V, etc.) - Decrease of CR-V, in Indonesia, etc.

Other Regions 66 -23 - Increase of CR-V in Brazil

- Decrease of Civic, CR-V in Australia

Total 680 - 371

Automobile Unit Sales




- 371（ - 35.3% ）

6618792

465

946

136

72177100

445

937

143

87

18890

481

991

145

89203109

459

1,051

191

78

22175

460

962

128

91

20487

401

935

152

314

755

391

1,850

615

3,925

322

793

350

1,496

556

3,517

- 408（ - 10.4% ）

CR-V （Brazil）

87

217

85

416

940

135

INSIGHT （Japan）

66151103219

680

141

AsiaEurope

Other Regions

Japan

North America

Automobile Business Net Sales/Operating Income/Operating Margin

Yen(billions)

Yen(billions) Operating Margin

Operating Income

7,674.49,489.31,301.41,974.22,170.62,228.02,356.62,449.02,356.42,327.2Net Sales




24.5

661.6

148.3213.0 220.7

79.5161.2

79.0 70.5

- 286.2

0.3%

7.0%

6.4% 9.0%

3.4%7.2%9.0%

3.6% 3.6%

-22.0%

-300

-200

-100

0

100

200

300

400

500

600

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

(- 96.3%)

700

（- 44.8%）（- 19.1%）

<Increase Factors>• Effects of cost reductions, • Decrease in SG&A expenses etc.<Decrease Factors>• Decrease in revenue and model mix change , etc.• Increase in fixed cost due to production cut• Increase in raw material costs etc.

44

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

45

FY094Q

Change from FY 08 4Q

Major increase/decrease factors

Japan 101 - 50- Increase of gas-powered mini-tiller Pianta FV200, etc- Decrease of GX series engines for OEM generators

North America 655 - 233 - Decrease of GC/GC(V) series for OEM washer

pressure and lawn mower in United States

Europe 472 - 199- Decrease of general purpose engines, such as

GX/GC series engines for OEM construction machinery and generators

Asia 200 -51 - Increase of water pumps in Indonesia- Decrease of generators in India

Other Regions 103 -28

- Decrease in general purpose engines, such as the GX series generators in Australia

Total 1,531 - 561

Power Products Unit Sales


- 561（- 26.8%）

97220

390

687

135

1,529

116242

280

479

141

1,258

140202352

361

123

1,178

131251

671

888

151

2,092

119249

319

493

159

1,339

127

296

231402

146

1,202

484

915

1,693

2,415

550

6,057

502

970

1,306

1,893

516

5,187

- 870（- 14.4%）

153225284

343110

1,115 103200

472

655

101

1,531

Unit(thousands)



Pianta FV200 （Japan）

Asia

Europe

Other Regions

Japan

North America

Power Product & Other Businesses Net Sales/Operating Income/Operating Margin

Yen(billions)

Yen(billions)

Operating Margin

Operating Income

368.9442.779.479.5103.0106.8122.3100.2105.0115.2Net Sales




- 15.4

22.3

7.9 6.92.2 5.1

0.2 - 0.9- 2.8

- 11.9- 4.2%

5.0%6.9%

2.3%4.2%

0.2%

6.6%

- 0.9%- 3.5%

- 15.0%-20

-15

-10

-5

0

5

10

15

20

25

-16%

-12%

-8%

-4%

0%

4%

8%

12%

16%

20%

<Increase Factors>• Decrease in SG&A expenses<Decrease Factors>• Decrease in revenue

and model mix change, etc.• Increase in R&D expenses

for Other Businesses (expenses related to start-up

of new businesses) , etc.

（- 35.1%）（- 16.7%）

46

Financial Services Business Net Sales/Operating Income/Operating Margin

Yen(billions)

Yen(billions)

Operating Margin

Operating Income

596.5549.0138.3146.0162.6149.5141.7139.6137.8129.8Net Sales




（- 2.4%）（+ 8.6%）

(- 31.5%)(- 42.3%)

18.09.4

24.328.731.322.9

29.334.2

117.7

80.6

13.1%

6.5%

14.9%

21.3%

19.2%

22.1%

16.4%

26.4%

21.5%

13.5%

0

10

20

30

40

50

60

70

80

90

100

110

120

130

0%

10%

20%

30%

<Increase Factors>• Increase in finance receivables and property on operating leases, etc.<Decrease Factors>• Increase in provisions for residual loss, etc.

47

Change

- 97.0

- 49.0

- 151.7

- 179.6

- 1,641.2

Amount

40.0

50.0

10.0

10.0

8,370.0

FY10Forecasts

- 49.5%99.0Equity in income of affiliates

- 70.8%

- 93.8%

- 94.7%

- 16.4%

%

137.0Net income

161.7Income before income taxes

189.6 Operating income

10,011.2Net sales & other operating revenue

FY09Results

Yen （billions）

Note : Shares which are basedon calculation of EPS (as of Mar. 31, 2009)

Approx. 1,814,561,000 shares Approx. 1,814,609,000 shares

FY10 Financial Forecasts (Consolidated)

- 53.46 - 70.8%22.0475.50 EPS (Yen)

Yen up by 17 yen

Yen up by 6 yen

125

95

142Euro

101U.S. Dollar

Average Rates (Yen)


※Net income FY10 means attributable toshareholders of Honda

※

48

Japan

Europe

Other Regions

Asia

NorthAmerica

Automobiles Power Products

FY09Results

Motorcycles

FY10Forecasts

Unit sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, but do not use any parts supplied by Honda and its subsidiaries

Unit(thousands)

FY09Results

FY09Results

Forecast: Unit Sales by Business Segment


FY10Forecasts

FY10Forecasts

0

3,000

6,000

9,000

12,000

15,000

0

1,000

2,000

3,000

4,000

5,000

6,000

0

1,000

2,000

3,000

4,000

- 307 - 527- 1,519

10,114

Approx 5,380

8,595

Approx 4,700

3,2103,517

5,187

7,523

320232

276

1,763

350

556

1,496

322

793

1,306

516

1,893

502

970

6,500

190

205

1,465

235

290

555

1,350

240

775

4,660

1,230

420

1,690

440

880

49

CurrencyEffect

OthersFair value of

derivativeinstruments

FY09Results

Yen

(billions)

Forecast: Change in Income before Income Taxes

Revenue, model mix,

etc. Cost Reduction, etc.

Decrease in R&D

Decrease in SG&A

FY10Forecasts

161.7

10.0

Operating Income - 179.6 bn. yen ( - 94.7 %) Other Income &

Expenses + 27.9 bn. yen

- 334.8

- 39.0

+ 339.0

+ 48.2 - 193.0

+ 20.0 + 7.9

Income before income taxes - 151.7 bn. yen ( - 93.8 %)

Operating income

189.6

Operating income

10.0

50

Yen

(billion)

Forecast: Capital Expenditures, Depreciation, R&D Expenses

- 48.1

- 28.2

- 209.1

Change

563.1

408.2

599.1

FY09Results

515.0

380.0

390.0

FY10Forecasts

R&D expenses

Depreciation and

amortization *

Capital

expenditures *

125

95

Yen up by 17 yen

Yen up by 6 yen

142 Euro

101U.S. Dollar

* “Capital expenditures” in results and the forecast aforementioned exclude investment in operating leases and acquisition of intangible assets.

* “Depreciation and amortization” in results and the forecast aforementioned exclude depreciation of investment in operating leases and amortization of intangible assets.

51

Dividend to Shareholders

(Yen)(Yen)

±0

- 14 8 + 222201st quarter End

- 14 8 22222nd quarter End

- 3 8 - 1111223rd quarter End

±08 - 14 8224th quarter End

- 3132 - 2363 86Fiscal Year

Increase/Decreasefrom

FY08 Results

FY08Results

Increase/Decreasefrom

FY09 Results

FY10Projection

FY09Results &Projection

Dividend per share

Projection as of Apr. 28th

*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

52

Caution with Respect to Forward-Looking Statements:This slide contains forward-looking statements about the performance of Honda, which are based on management’s assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Honda’s actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda’s principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time.

Accounting standards: Our consolidated financial standards are prepared in conformity with U.S. generally accepted accounting principles.

Notice on the Factors for Increases and Decreases in Income:With respect to the discussion above of the change in operating income, management has identified the factors set forth below and used what it believes to be a reasonable method to analyze the respective changes in such factors. Each of these factors is explained below. Management has analyzed changes in these factors at the levels of the Company and its material consolidated subsidiaries.

(1)“Foreign currency effects” consist of translation adjustments, which come from the translation of the currency of foreign subsidiaries’ financial statements into Japanese Yen, and foreign currency adjustments, which result from foreign-currency-denominated sales, which, at the levels of the Company and those consolidated subsidiaries which have been analyzed, primarily relate to the following currencies: U.S. dollar, Canada dollar, Euro, GBP, BRL and Japanese Yen.

(2) With respect to “cost reduction and effects of raw material cost fluctuations”, management has analyzed cost reduction and effects of raw material cost fluctuations at the levels of the Company and its material foreign manufacturing subsidiaries in North America, Europe and other regions.

(3) With respect to “changes in net sales and model mix”, management has analyzed changes in sales volume and in the mix of product models sold in major markets which have resulted in increases/decreases in profit, as well as certain other reasons for increases/decreases in net sales and cost of sales.

(4) With respect to “selling, general and administrative expenses”, management has analyzed reasons for an increase/decrease in selling, general and administrative expenses from the previous fiscal year net of currency translation effects. 53

honda honda update update 200 200 9 9

Documents

raw material costs

motorintegrated motor assist

racing activitiesand cancellations

drive force path

automobile businesshonda direction

excluding commercial vehicles

weighted average number

hondas affiliates accounted