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Honda Update Honda Update JuneJune 20082008

2008 ACCORD TOURER(for European Market)

CR-Z(a lightweight sports hybrid concept )

OutlineHighlights of Honda’s Business Growth Strategy

• US Operations (Automobile)• Brazil Operations (Automobile & Motorcycle)• Asia Operations (Automobile & Motorcycle)• Europe Operations (Automobile)• Production Capacity (Automobile)• Growth Potential of Motorcycle Business• Hybrid Vehicle Business Strategy

P 2- 8P 9- 11P 12- 18P 19- 20P 21P 22

Financial Highlights• FY 08 Results

• Outline• Segment Information• Profit Analysis

• FY 09 Forecasts• Dividend per Share

P 24- 25P 26- 32P 33- 36P 37- 40P 41- 42

P 23

Major Key Drivers

Brazil Operations : Automobile and Motorcycle Asia Operations : Automobile and MotorcycleEurope Operations : Automobile

US Operations : Automobile

Honda’s Business Growth Strategy

1

Growth Potential of Motorcycle Business Hybrid Vehicle Business Strategy

Operation in North America

128.4118.295.7114.4105.8106.768.572.7 63.197.0 116.0 156.3

4.3%

7.7%7.3%

6.7%

5.4%

7.8%

6.5%7.2%

5.8%6.1%

7.5%

9.5%

0

50

100

150

FY06 1Q 2Q 3Q 4Q FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q0%

2%

4%

6%

8%

10%

12%

Operating income in North America compressed by higher yen and weak model mix

2

Yen (billions)

0

5,000

10,000

15,000

20,000

CY 04 '05 '06 '07 08(E)

Passenger CarsLight Trucks

Unit(thousands)

0

500

1,000

1,500

CY 04 '05 '06 '07 08(P)

Passenger CarsLight Trucks

Source: Honda

Industry Demand Honda’s Retail Unit SalesUnit

(thousands)

Update on Honda’s U.S. Automobile Business

1,570

1,3941,462

1,50916,55616,884 16,965

1,552

(aggregate numbers of Honda brand and Acura brand)

16,149

Honda’s steady growth despite weak SAAR

15,300

3

-250 -200 -150 -100 -50 0 50

TOTAL

General Motors

Chrysle r

Ford

Toyota

Hyundai

Mitsubish i

Nissan

BMW

Kia

Suzuki

Vo lkswagen

Mercedes-Benz

Mazda

Smart USA

Honda

-400

U.S. Light Vehicle Retail Sales YoY Changes by manufacturers

January – April, 2008 vs 2007

Unit (thousands)

4

-25 -20 -15 -10 -5 0 5 10 15 20

Ford

General Motors

TOTAL

Suzuki

Toyota

Mazda

BMW

Mitsubishi

Mercedes-Benz

Hyundai

Volkswagen

Chrysler

Kia

Smart USA

Nissan

Honda

U.S. Passenger Car Retail Sales YoY Changes by manufacturers January – April, 2008 vs 2007

Unit (thousands)

5

-200 -150 -100 -50 0 50

TOTAL

Chrysler

General Motors

Ford

Toyota

Nissan

Honda

Hyundai

Kia

Mitsubish i

Volkswagen

BMW

Mercedes-Benz

Mazda

Suzuki

-350

U.S. Light Truck Retail Sales YoY Changes by manufacturers

Unit (thousands)

January – April, 2008 vs 2007

6

0

200

400

600

800

1000

1200

1400

1600

1800

CY 1

998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008(P

)

Fit

Ridgeline

MDX

Element

CR-V

Odyssey

Pilot

TSX

RDX

TL

Legend/RL

Civic

Accord

Honda’s fuel efficient vehicles are well received in the U.S.demonstrates solid passenger car sales

Accord

Civic

CR-V

Update on Honda’s U.S. Automobile Business

Unit (thousands)

Fit

7

AllistonAlliston

Total Annual Production Capacity: 1,420,000 (current) ⇒ 1,620,000 (fall of 2008)

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 200200GreensburgGreensburg

location Annual Capacity

Product pipeline and production flexibility in North America

Accord CR-V

Civic

Accord TL

Pilot

RDX

Civic

CR-V

CR-V

CSX

Civic

MD-X

Accord

Pilot

Small Middle Luxury Crossover Pickup Van

5050Mexico Mexico El SaltoEl Salto

Line 2

150

Line 2

150

Line 1

150

Line 1

150

Civic

Importfrom Japan

Importfrom Japan

Ridgeline

Odyssey

Odyssey

Odyssey

New model in 2008

Element

RidgelineOntarioOntario

8

Operation in South America

19.516.021.415.211.616.615.113.6 32.721.7 30.1 31.7

10.4%

8.4%8.3%

10.9%10.3%

8.6%

7.2%

11.4%

11.7%

9.6%

11.3% 11.2%

0

10

20

30

40

50


7%

9%

11%

13%

Operating income in Other region centered in Brazil to grow

9

Yen (billions)

0

20

40

60

80

100

120

140

160

CY 04 05 06 07

Flexible Fuel VehiclesPetrol Engine Vehicles

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

CY 04 05 06 07 08(E)

Brazil Argentina Venezuela ChileColombia Ecuador Peru

Industry Demand(including commercial vehicles)

Unit (thousands)

Unit (thousands)

Honda’s Unit Sales

Source: HondaSource: Global Insight

Honda’s Progress in South America

Fit FFV

Flexible Fuel Vehicles introduced in Brazil

Good sales of FFV models continue to contribute to growth in 2008.

Introduced in Nov. 2006 Introduced in Dec. 2006

Civic FFV

57

68

84

Capacity:30,000 units, to start operation in 2009

(currently marketed in Brazil)

1. Features of Honda FFV models in Brazil (Civic &Fit)- Adapt to ethanol-to-gasoline ratios of between 20% and 100%

2. Further acceleration of production capacity in Brazil100,000→ 120,000 within 2008

3. New plant in Argentina

Brazil only

108

Honda’s Automobile Business Growth in South America

5057

67

86

South America

10

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

CY 04 05 06 07 08(E)

Expansion of production capacity Dec.2007 (1,350 → 1,500 thousand units per year)

Other brandsHonda

Source: Honda

Honda’s Motorcycle Business in Brazil

Industry: Unit (thousands)

CG 150 Titan CG 125 FAN Biz 125

Principal models

Solid operation as the market leader in the growing Brazil marketFurther expansion of capacity is planned in 2009 (1,500 2,000 thousand units)

11

38.333.436.9 21.919.1 15.8 17.2 12.7 19.4 18.2 20.2 19.2

9.3%

8.0%

9.4%

8.3%

6.9%

4.5%

6.8%6.8%

5.8%6.7%

5.2% 5.3%

0

10

20

30

40

50

1Q 2Q 3Q FY06 4Q 1Q 2Q 3Q FY07 4Q 1Q 2Q 3Q FY08 4Q0%

2%

4%

6%

8%

10%

12%

14%

Operation in Asia

Operating income in Asia exceed 100 billion in FY08 with higher auto and motorcycle growth

12

Yen (billions)

0

10

20

30

40

50

60

70

80

CY 04 05 06 070

200

400

600

800

1,000

1,200

1,400

CY 04 05 06 07 08(E)

Premium

"A"

800cc

Industry Demand (excluding commercial vehicles,

SUV and MUV)

Unit (thousands)

Unit (thousands)


City

Accord

Civic

Update on Honda’s Automobile Business in India

Source: Honda

CR-V

Category

Source: Global Insight

Honda’s Progress in India

Accord (May 2008-)

City (Oct 2003-)

CR-V (Nov 2006-)

Civic (July 2006-)

Honda model line up in India

35

40

55

Existing Plant Second Plant50,000 →100,000 units(2008 Jan. completed)

60,000 units (Operation starts toward the end of 2009 to 2010)

60

1. Enhancing dealer network- Number of Dealer outlets: 34 (Mar. 2003) →

80 (Mar. 2008)2. Further Accelerating production capacity expansion

13

Other brandsHero Honda Honda Motorcycle & Scooter India


Source : Honda

Honda’s Motorcycle Business in India

Solid business foundation with 2 companies in rapidly growing market

Principal models of Honda Motorcycle & Scooter India

Splendor+ Activa Shine

Principal models of Hero Honda Motors Limited

CD Deluxe

0

2,000

4,000

6,000

8,000

10,000

CY 04 05 06 07 08(E)

Passion+

Expansion of annual production capacityHHML 500 thou. Increase from April 2008

(India total 4,900 → 5,400 thousand units)

14


Source : Honda

Growth of HMSI in India

Steady Growth of Honda Motorcycle & Scooter India, subsidiary of Honda

Principal models of Honda Motorcycle & Scooter India

Activa Shine

0

200

400

600

800

1,000

CY 04 05 06 07

HMSI Dealer

Unicorn (Sep 2004-)

Expansion of production capacity by the end of 2010 (1,000 → 1,200 thousand units per year)

Aviator (Mar 2008-)15

Expansion of production capacity in Aug 2008 (1,000 → 1,500 thousand units per year)

0

500

1,000

1,500

2,000

2,500

3,000

CY 04 05 06 07 08(E)

Other brandsHonda

Source: Honda

Honda’s Motorcycle Business in Vietnam


Future Neo FI(Apr 2007-)

Click* (Oct 2006-)

Principal models

Honda to enhance product pipeline for growing market, Further expansion of production capacity

Wave S (May 2007-) * AT model: Motorcycles equipped with automatic transmission

Air Blade* (Apr 2007-)

16

http://ja.wikipedia.org/wiki/%E7%94%BB%E5%83%8F:Flag_of_Vietnam.svg

0

1,000

2,000

3,000

4,000

5,000

6,000

CY 04 05 06 07 08(E)

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

Other brandsHonda

Source: Honda

Honda’s Motorcycle Business in Indonesia


Vario*

Principal models

* AT model: Motorcycles equipped with automatic transmission

Revo

Coming in 2008

Supra X 125

Honda to enhance product pipeline to go with the momentum of the market

17

Update on Honda’s Automobile Business in China

0

50

100

150

200

250

300

350

400

450

500

CY 04 05 06 07 08(P)

Unit (thousands)

Accord

Odyssey

City

Fit

CR-V

Civic

Source: Honda

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

CY 04 05 06 07


Honda’s Progress in China

Unit (thousands)

OdysseyAccordCityFit

CR-VCivic

GHAC model line up

1 Enhancing model lineup and dealer network- New Accord introduced in Jan. 2008, New Fit to be introduced within 2008- Number of Dealer outlets: GHAC 361, WDHAC 189, Acura 8(Mar.2008)

Total 700 outlets within a year- Introduction of Acura (RL/TL/MDX) WDHAC model line up

*1 GHAC: Guangzhou Honda Automobile Co., Ltd.*2 WDHAC: Dongfeng Honda Automobile Co., Ltd.*3 CHAC: Honda Automobile (China) Co., Ltd.

214

257

323

WDHAC models

GHAC models

Industry Demand(excluding commercial vehicles)

GHAC*1

WDHAC*2

CHAC*3

: Capacity 360 thou. units: Capacity 120 thou. units--> 240 thou. units within 2yrs: Added 2nd shift from Apr. 2007, capacity 50 thou. units

424

Over 490

2 Progress in Manufacturing Operation

3 GHAC begin selling products under its own brand in 2010

Source: CAAM

18

12.63.79.06.49.82.80.812.7 18.610.3 16.7 5.8

4.2%

2.9%

1.4%

2.9%

0.3%

2.0%

2.8%

1.1%

4.3%

2.6%

4.3%

1.6%

0

10

20

30


1%

2%

3%

4%

5%

Operation in Europe

Operating income in Europe (including Russia) to grow, expecting higher sales in Russia

19

Yen (billions)

0

20

40

60

CY 04 05 06 07

Unit (thousands)

Unit (thousands) Honda’s Unit Sales

Accord

Civic

Source: Honda

CR-V

0

500

1,000

1,500

2,000

2,500

3,000

CY 04 05 06 07

Foreign brands

Domestic brands

Source: AEB (The Association of European Businesses)

Jazz

6.08.9

15.7

38.6

Update on Honda’s Automobile Business in Russia

Honda’s Progress in Russia

AccordCR-V

Jazz

Honda model line up in Russia

Pilot (coming in 2008)

1 Starting business- Established subsidiary company (HMR) in Feb. 2004

2 Enhancing dealer network- Number of Dealer outlets:

15 (2004 end) →

43 (Mar. 2008)expand mainly in large cities, total 70 outlets in a few years

Civic 5D

Industry Demand (excluding commercial vehicles)

Civic 4D

20

Current

Brazil+20

Thailand+120

Indiana+200

Argentina+30

India+60

YoriiJapan+200

2010

4,055

Expansion of Production Capacity (Automobiles)

Next generation high efficiency engine at Ogawa Engine PlantHigh value added model at Yorii Auto Plant

2008 2009

WDHACChina+120 within 2yrs

21

Unit(thousands)

0

10,000

20,000

0

2,000

4,000

6,000

8,000

10,000

12,000VietnamThailandBrazilIndonesiaIndia

Industry:( thousands )

Source: Honda

Honda wholesales:( thousands )

Growth Potential of Motorcycle Business in Emerging Markets

Population (millions)

Penetration Rate (% of population) of Motorcycles

$15,482

$5,718

$3,136

$723

$1,640

$5,714

$796

GDP per capita(U.S.$)(JETRO 2006)

100 mil 200 mil 1,100 mil

Units in operation (millions)Taiwan

Malaysia

Thailand

Vietnam

Indonesia*

Brazil

India*

*Indonesia data as of 2004*India data as 2004 provisional

22

10% 20% 30% 40% 50% 60%59.5%

28.3%23.8%

20.5%

10.8%5.1%

4.6%

Honda wholesales unit (thousands)●

Honda has strong position in such marketsCY 04 05 06 07 08(E)

Motorcycle penetration is still low in Honda’s principal markets

Hybrid Vehicle Business Strategy

0

50

100

150

200

250

300

350

CY99 00 01 02 03 04 05 06 07

Hybrid technology is about to hit the “growth” stage, Honda aims wider market penetration with new dedicated hybrid model

Hybrid Car in the U.S. market

Honda

Other Brand

Insight, first hybrid vehicle in the U.S.

New Hybrid Model

Hybrid Sports

New Civic Hybrid

Compact, 5 door/5 passenger, to be marketed in early 2009

Honda annual global sales beyond 2010

Unit (thousands)

2006 Civic Hybrid, won the “World Car of the Year Award”for Greenest Car

CR-Z, Concept model

Fit Hybrid

Cost down on Next Hybrid System

Introduction of Honda Insight

-Compact Control Unit / Battery-Thin Hybrid Motor-Efficient manufacturing processes

Hybrid models with affordable price: 500,000500,000 annual global sales beyond 2010

23

Financial Highlights•FY 08 Results

•Outline•Segment Information•Profit Analysis

•FY 09 Forecasts•Dividend per Share

EPS (Yen) 96.70 14.01 - 82.69Note : Shares which are based

on calculation of EPSapprox.

1,821,994,000 sharesapprox.

1,814,587,000 shares

Unit Sales4Q Results

FY07 FY08 Change

Motorcycles 2,408 2,368 - 1.7%

Automobiles 957 1,051 + 9.8%

Power Products 2,128 2,092 -1.7%

Financial results4Q Results

FY07 FY08 Change

Net sales & otheroperating revenue 3,087.8 3,055.5 - 1.0%

Operating income 250.2 168.8 - 32.5%

Income beforeincome taxes 239.0 146.8 - 38.6%

Equity in incomeof affiliates 19.9 24.3 + 22.1%

Net income 176.1 25.4 - 85.6%

U.S. Dollar 120 106 stronger by 14 yen

Euro 157 158 weaker by 1 yen

Record highfor 4Q

*

Unit (thousands)

Business environment

Review of financial results

Continuing cost reduction effectsIncreased profit from increased automobile unit sales

US economy slow down, ongoing subprime loan impactDeclining personal consumption in European economyContinued growth of Asian economySigns of weakness in Japan economy Continued high prices for crude oil and raw materials

Motorcycle Market Growth in Vietnam and Brazil continuedDeclining market in North America

Automobile MarketGrowth of emerging markets such as BRICs Strong demand for fuel-efficient cars in the U.S. Japan automobile market remain stagnant

Unit SalesMotorcycles: Strong sales in South America, etc.

Decreased unit sales of component parts for AsiaUnit sales increased in all regionsAutomobiles:

Power Products:Increased unit sales in Europe, Asia, Other RegionsDecreased unit sales in North America

Net sales & other operating revenueIncreased unit sales in automobile segmentsNet sales decreased due to currency translation effects

Operating income

<Decrease Factors>

<Increase Factors>

Currency effect of yen appreciation against U.S. dollarIncrease in sales incentives in North AmericaIncreased raw material costs

Yen (billions)

(weighted average number of shares outstanding )

Average Rates (Yen)

Outline of 4th Quarter Financial Results (Consolidated)

Operating margin decreased due to factors including significant yen appreciation against U.S. dollar despite the increased automobile unit sales achieved in the toughening business environment such as in the U.S.

*

Yen appreciation against U.S. dollar, depreciation against other currencies

24

Twelve Months Results

FY07 FY08 Change

10,369 9,320 - 10.1%

3,652 3,925 + 7.5%

6,421 6,057 - 5.7%

Twelve Months Results

FY07 FY08 Change

11,087.1 12,002.8 + 8.3%

851.8 953.1 + 11.9%

792.8 895.8 + 13.0%

103.4 118.9 + 15.0%

592.3 600.0 + 1.3%

324.62 330.54 + 5.92

approx.1,824,675,000 shares


117 114 stronger by 3 yen

151 162 weaker by 11 yen

*

*

*

*

*

*

*

Record high fortwelve months


EPS (Yen) 96.70 14.01 - 82.69Note : Shares which are based

on calculation of EPSapprox.

1,821,994,000 sharesapprox.

1,814,587,000 shares

Unit Sales4Q Results

FY07 FY08 Change

Motorcycles 2,408 2,368 - 1.7%

Automobiles 957 1,051 + 9.8%

Power Products 2,128 2,092 -1.7%

Financial results4Q Results

FY07 FY08 Change

Net sales & otheroperating revenue 3,087.8 3,055.5 - 1.0%

Operating income 250.2 168.8 - 32.5%

Income beforeincome taxes 239.0 146.8 - 38.6%

Equity in incomeof affiliates 19.9 24.3 + 22.1%

Net income 176.1 25.4 - 85.6%

U.S. Dollar 120 106 stronger by 14 yen

Euro 157 158 weaker by 1 yen

Record highfor 4Q

*

Unit (thousands)

Yen (billions)


Average Rates (Yen)

*

Outline of 4th Quarter & Twelve Months Financial Results (Consolidated)

25

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

第１四半期第２四半期第３四半期第４四半期第１四半期第２四半期第３四半期第４四半期 12ヶ月間通算 12ヶ月間通算

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

第１四半期第２四半期第３四半期第４四半期第１四半期第２四半期第３四半期第４四半期 12ヶ月間通算 12ヶ月間通算

288

1,809

1058989

2,380Approx.500

Approx.560

341

2,163

7114398

2,816

Approx.640

314

2,217

5610771

2,765

362

1,70697

16479

2,408

Approx.1,150

371

1,623958084

2,253

Approx.1,100 Approx.1,020

392

1,64568

121107

2,333

1,610

6,633

313453311

9,320

Approx.4,580

1,305

7,895

329503337

10,369

Approx.2,860

- 40（ - 1.7% ）

- 1,049（ - 10.1% ）

CG125 FAN (Brazil)

Approx.1,160

401

1,74861

10254

2,366446

1,61789

15066

2,368

Approx.1,280

Other Regions

Asia

Europe

Japan

FY08 4Q Change from FY 07 4Q Major increase / decrease factors

Japan 66 - 13 ・Decrease of Dio etc.

North America 150 -14 ・Decrease of CBR600RR, VT750

・ Decrease of ATV such as Four Trax Foreman

Europe 89 - 8 ・Decrease of CBR600RR in Italy

Asia 1,617 - 89・Decrease of component parts for Indonesia・Increase of Wave S and AT models such as Air Blade in Vietnam

Other Regions 446 + 84 ・Introduction of POP100 in Brazil

・Increase of CG125, NXR150 in Brazil

Total 2,368 - 40Unit 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)

Twelve Months FY08

1Q 2Q 3Q 4Q 1Q 2Q 4Q Twelve Months FY07FY07 FY08

3Q

North America

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.

Wave S (Vietnam)

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

26

151.2100.613.1 32.0 11.1 44.2 31.1 37.0 30.3 52.7

9.7%

7.3%

4.2%

3.7%

10.5%

8.5%

9.6% 9.7%

8.3%

11.9%

0

20

40

60

80

100

120

140

160

FY07 1Q 2Q 3Q 4Q FY08 1Q 2Q 3Q 4Q FY07 FY080%

5%

10%

15%

（+ 5.3%）

Net Sales 310.1 335.5 303.2 421.7 368.3 381.6 364.6 444.0 1,370.6 1,558.6（+ 13.7%）

Motorcycle Business Net Sales/Operating Income/Operating Margin

Yen (billions)

Yen (billions) Operating Income

Operating Margin

FY07 FY081Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Twelve Months Twelve Months

FY07 FY08

27

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

第１四半期第２四半期第３四半期第４四半期第１四半期第２四半期第３四半期第４四半期累計累計


Japan 191 + 2 ・Increase of FIT and Inspire・Decrease of That’s

North America 459 + 9 ・Increase of Accord and CR-V

・ Decrease of Pilot

Europe 109 + 7 ・Increase of Civic and CR-V in Russia, Ukraine

Asia 203 + 54 ・Increase of component parts for China (CR-V and Fit etc )・Increase of CR-V in ASEAN countries such as Indonesia

Other Regions 89 + 22

・Increase of Civic FFV in Brazil・Increase of Accord in Middle East countries such as Saudi Arabia and UAE

Total 1,051 + 94


Asia

Japan

North America

Europe

Other Regions

Twelve Months FY08


3Q

Unit (thousands)

6016379

411

8846015371

456

896

+ 94（ + 9.8% ）

6115572

471

915

149102

450

95767 66

18792

465

946

171156 156 189 136

72177

100

445

937

143

314

755

391

1,850

615

3,925

248

620

324

1,788

672

3,652

+ 273（ + 7.5% ）

87188

90

481

991

145

FIT (Japan)

Civic (Russia)

89203109

459

1,051

191

CR-V (Indonesia)

Automobile Unit Sales

28

661.6599.5150.0 130.8 160.7 157.7 148.3 213.0 220.7 79.5

7.0%6.7%7.2% 7.1%6.5% 6.4%

6.2%

9.0% 9.0%

3.4%

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750


2%

4%

6%

8%

10%

12%

Automobile Business Net Sales/Operating Income/Operating Margin

（- 3.0%）

Net Sales 2,095.6 2,098.8 2,263.8 2,430.7 2,327.2 2,356.4 2,449.0 2,356.6 8,889.0 9,489.3

（+ 6.8%）

Yen (billions)


Operating Margin


FY07 FY08

29

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

第１四半期第２四半期第３四半期第４四半期第１四半期第２四半期第３四半期第４四半期累計累計

Asia

North America

Europe

Other Regions

Japan


Twelve Months FY08


3Q


Japan 151 + 12 ・Increase of general purpose engines for OEM

North America 888 -135 ・Decrease of general purpose engines for OEM, generators in

the U.S.

Europe 671 + 47 ・Increase of general purpose engines for OEM

Asia 251 + 21・Increase of general purpose engines for OEM, water pumps in Thailand, Indonesia

・Decrease of general purpose enginesOther

Regions 131 + 19 ・Increase of lawn mowers in Australia・Increase of generators in South Africa

Total 2,092 - 36

Unit (thousands)

- 36（- 1.7%）

72162382

971

137

1,724

105207254

494

127

1,187

HRU19D1 Buffalo Buck(lawn mower)

161117

365

615

124

1,382

112230

624

1,023

139

2,128

97220

390

687

135

1,529

116242280

479141

1,258

484

915

1,693

2,415

550

6,057406

760

1,625

3,103

527

6,421

- 364（- 5.7%）

140202

352

361123

1,178

131251

671

888

151

2,092

GX35T(general purpose engine)

GCV160(general purpose engine)

Power Products Unit Sales

30

22.336.111.0 7.4 10.4 7.2 7.9 6.9 2.2 5.1

5.0%

8.2%

10.2%9.9%

5.8%

6.9%

7.5%

6.6%

2.3%

4.2%

0

5

10

15

20

25

30

35

40


2%

4%

6%

8%

10%

12%

14%

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

（- 2.4%）

Net Sales 108.4 100.0 105.0 125.3 115.2 105.0 100.2 122.3 438.9 442.7（+ 0.9%）

Yen (billions)


Operating Margin


FY07 FY08

31

31.322.929.334.240.922.722.629.2 115.5 117.7

22.1%

16.4%

21.3%

22.8%

26.4%

34.6%

21.7%

32.2%

28.0%

21.5%

0

10

20

30

40

50

60

70

80

90

100

110

120


10%

20%

30%

Financial Services Business Net Sales/Operating Income/Operating Margin

（+ 19.6%）

Net Sales 90.8 98.9 105.0 118.4 129.8 137.8 139.6 141.7 413.3 549.0（+ 32.8%）

Yen (billions)


Operating Margin* Including increased net sales due to start of operating lease transaction

* * * * * *


FY07 FY08

32

239.0 146.8

- 28.3 + 31.6 - 46.2+ 4.4

- 42.8

- 27.0 + 16.1

Yen (billions)Income before Income taxes - 92.2 bn. yen ( - 38.6 % )

Operating Income - 81.3 bn. yen ( - 32.5 %)Other Income & Expenses

Revenue,model mix,

etc.

Cost Reduction, the effect of raw

material cost fluctuations, etc.

Increase in SG&A

Decrease in R&D

Currency Effect

Fair value of derivative

instruments( Exhibit 2)

Others<Decrease Factors>- Increase in sales incentives in North America- Change in model mix, etc.<Increase Factors>- Increased profit from increased automobile unit sales- Change in sales prices, etc.

<Increase Factors>- Continuing cost reduction effects, etc.<Decrease Factors>- Increased raw material costs- Increase in depreciation expenses, etc.

<Decrease Factors>- Increase in provision for the allowance for

credit losses- Increase in quality related expenses- Increased logistics expenses due to the

increase in unit sales, etc.

- Currency effect due to difference between average rates and transaction rates: + 28.1 bn. yen

- Gain and loss from valuation of the balance of receivable and debt: - 12.0 bn. yen

FY08 4QFY07 4Q

- 10.8 bn. yen

(see also Exhibit 1)

(due to difference of average rates & translation effects)- 42.8 bn. yen <Impact on Operating income>(due to difference between average rates and transaction rates)+ 28.1 bn. yen <Impact on Other income & expenses>

【Currency Effect 】

- 14.6 bn. yen <Impact on Income before income taxes>

Change in Income Before Income Taxes < FY08 4th Quarter >

33

FY08 4Q Average Rates (Yen) FY08Twelve months

FY07 4Q FY08 4Q Change

JPY / USD - 44.5 120 106 strongerby 14 yen - 34.5

JPY / Euro + 0.5 157 158 weakerby 1 yen + 15.2

JPY / Others - 0.2 ― ― ― + 23.6between other currencies + 11.8 ― ― ― + 8.6

Due to difference of average rates - 32.3 + 13.0Due to difference between average rates and transaction rates + 28.1 + 53.6

Currency effect associated with sales transactions - 4.1 + 66.7

Currency effect from translation of foreign financial statements - 10.4 + 24.6

*1

Yen (billions)

Effects in Yen (billions)

Effects in Yen (billions)

(Impact on Operating income)

(Impact on Other income & expenses)

Total - 14.6 + 91.3

(Impact on Operating income)

*2

*3

*1: Impact of YOY difference of FOREX to be used for booking revenue of foreign currency transactions

*2: Impact of YOY difference between average FOREX and hedge rates during the period

*3: Effect due to the difference of the rate used for translating Honda’s overseas subsidiaries’ financial statements denominated in foreign currencies into Japanese yen with the corresponding period of the fiscal year

- Currency effects (effects associated with sales transactions and translation effects) - (Exhibit 1)FY08 4th Quarter & Twelve Months Change in Income Before Income Taxes

34

4Q

FY07 FY08 Change

Gain and loss on fair value adjustments for foreign currency exchange contracts

+ 14.2 + 21.8 + 7.6

Interest rate swap - 6.6 - 41.0 - 34.3

Others - 0.7 - 1.0 - 0.3

Total + 6.7 - 20.2 - 27.0

Twelve Months

FY07 FY08 Change

- 0.8 + 14.5 + 15.4

- 28.7 - 84.2 - 55.5

- 27.2 - 0.5 + 26.6

- 56.8 - 70.2 - 13.4

(Twelve Months)＜Swap interest rate＞

Reference： (4Q)

Yen (billions)

At the end of Mar, 2006At the end of Mar, 2007Difference

At the end of Mar, 2007At the end of Mar, 2008Difference

5.23% 5.04%

(-0.19%)

5.04% 2.53%

(-2.51%)

＜Swap interest rate＞

At the end of Dec, 2006At the end of Mar, 2007Difference

At the end of Dec, 2007At the end of Mar, 2008Difference

5.16% 5.04%

(-0.12%)

3.92% 2.53%

(-1.39%)

- Gain and loss on derivative instruments - (Exhibit 2)FY08 4th Quarter & Twelve Months Change in Income Before Income Taxes

35

0

10

20

30

40

50

60

70

80

Operating income 58.0 55.7 49.9 30.1 61.2 56.3 55.7 38.0 193.8 211.4

Net income 51.8 50.2 44.2 27.6 57.2 50.0 49.7 31.0 174.0 188.0

22.6 23.220.1

6.6

+ 7.6 （ + 114.3% ）

26.8

FY07 1Q 2Q 3Q 4Q

FY08

22.2

72.6

86.1

1Q 2Q 3Q 4Q

22.6

+ 13.4（ + 18.5% ）

Yen (billions)

Reference：Operating income & Net income of affiliates accounted for under the equity method in Asia

* Indicates fiscal term of companies differs from that of Honda Motor Co., Ltd.

Motorcycle BusinessChina Sundiro Honda Motorcycle Co., Ltd.*

Wuyang-Honda Motors (Guangzhou) Co., Ltd.*India Hero Honda Motors Ltd. Indonesia P.T. Astra Honda Motor*Malaysia Hicom-Honda MFG. Malaysia SDN. BHD. Pakistan Atlas Honda Limited*Thailand A.P. Honda Co., Ltd.

Automobile Business：China Guangzhou Honda Automobile Co., Ltd.*

Dongfeng Honda Engine Co., Ltd.*Dongfeng Honda Automobile Co., Ltd.*

Others 37, Total 47 companies As of the end of March, 2008

Affiliates accounted for under the equity method

Twelve Months Twelve MonthsFY07 FY08

14.3

Equity in income of affiliatesAsia

36


Japan

Europe

Other Regions

Asia

North America

Motorcycles Automobiles Power Products

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)

FY09Forecast

FY08 FY09Forecast

FY08 FY09Forecast

FY08

9,320

Approx.4,720

10,620

Approx.4,580

4,1403,925

+ 215

6,1556,057

+ 98

3,000

6,000

9,000

12,000

1,000

2,000

3,000

1,000

2,000

3,000

5,000

4,000

6,000

6,633

453311

313

1,610

7,685

480300

310

1,845

391

615

1,850

314

755

470

620

1,770

360

920

1,693

550

2,415

484

915

1,725

550

2,365

525

990

4,000

+ 1,300

FY09 Financial Forecasts: Unit Sales by Business Segment

37

FY08Results

FY09Forecasts

Change

amount %

Net sales & other operating revenue 12,002.8 12,140.0 + 137.1 + 1.1%

Operating income 953.1 650.0 - 303.1 - 31.8%

Income before income taxes

895.8 675.0 - 220.8 - 24.7%

Equity in income of affiliates 118.9 106.0 - 12.9 - 10.9%

Net income 600.0 490.0 - 110.0 - 18.3%


EPS (Yen) 330.54 270.04 - 60.50approx.

1,814,538,000 shares

Yen (billions)

Note : Shares which are basedon calculation of EPS


(as of Mar. 31, 2008)

U.S. Dollar 114(1H: 119 2H: 110)

100(1H: 100 2H: 100)

(1H: stronger by 19 yen 2H: stronger by 10 yen)

Euro 162(1H: 162 2H: 161)

155(1H: 155 2H: 155)


stronger by 14 yen

stronger by 7 yen

Average Rates (Yen)

FY09 Financial Forecasts (Consolidated)

38

895.8

+ 198.0- 27.1

- 49.0

- 122.0

- 303.0

+ 94.0

- 11.7

675.0

FY09Forecasts

FY08

Revenue,model mix,

etc.

Increase in SG&A Increase

in R&D

Currency Effect

Fair value of derivative

instruments

Cost Reduction, the effect of raw

material cost fluctuations, etc.

Others

Income before income taxes - 220.8 bn. yen ( - 24.7 %)

Operating Income - 303.1 bn. yen ( - 33.8 %)Other Income & Expenses

+ 82.2 bn. yen

Yen (billions)

FY09 Financial Forecasts: Change in Income Before Income Taxes

39

FY08Results

FY09Forecasts Change

Capital expenditures * 654.0 710.0 + 55.9

Depreciation and amortization * 417.3 430.0 + 12.6

R&D expenses 587.9 615.0 + 27.1

*Depreciation and amortization in results and the forecast aforementioned exclude depreciation of investment in operating leases. Capital expenditures in results and the forecast aforementioned exclude investment in operating leases.

U.S. Dollar 114(1H: 119 2H: 110)

100(1H: 100 2H: 100)


Euro 162(1H: 162 2H: 161)

155(1H: 155 2H: 155)


stronger by 14 yen

stronger by 7 yen

Average Rates (Yen)

Yen (billions)

FY09 Financial Forecasts (Consolidated)

40

(Yen)

+ 222+ 12

20-1st quarter End

±02222302nd quarter End

±022+ 522173rd quarter End

±022+ 222204th quarter End

+ 2 88+ 19 8667Fiscal Year

Increase from FY07 Results

FY07 Results Increase from

FY08 results

FY09 Projection

FY08 Results &Projection

Dividend per share

Projection as of April 25th*

*

*

*

*

*

*

*

*

*

*

*

*

*

*

Dividend per Share

41

Dividend per Share

675032.521161411.5 86 88

3.09%3.02%

1.63%1.37%

0.88%0.81%0.52%

0.45%

1.21%

0

20

40

60

80

100

120

140

FY 01 02 03 04 05 06 07 08 090.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Dividend per share(JPY)

Dividend per share (JPY)

Dividend Yield

Dividend Yield

(projection)*1 FY01-FY08(projection) based on share price at each fiscal year-end*2 FY09 (projection) based on stock price of Mar.31, 2008*3 FY01-FY06 restated based on the number of common shares after stock split

*1,*2

*3

(projection)

42

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.

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.

90

100

110

120

130

140

150

160

170

1QFY07 FY08

2Q 3Q 4Q 1Q 2Q 3Q

Euro

U.S. dollar

Yen per U.S. dollar / Euro

The exchange rate prevailing on the Tokyo Foreign Exchange Market

4Q

(Reference) Foreign Currency Exchange rates (U.S. dollar & Euro to JPY)

(US$/tonne)

*Source: LME

(US$/tonne)

Average2,802

Average 2,729

Average5,921

Average7,759

Aluminum Copper

1Q 2Q 3Q 4Q

FY07

1Q 2Q 3Q 4Q

FY08

1Q 2Q 3Q 4Q

FY07

1Q 2Q 3Q 4Q

FY08

0

500

1000

1500

2000

2500

3000

3500

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

(Reference) Transition of commodity markets (Base metal prices)

100

200

300

400

500

600

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

800

1000

1200

1400

1600

1800

2000

2200

*Source: Platinum Today

(US$ per troy oz)

(US$ per troy oz)

(US$ per troy oz)

Average1,881

Average1,193

Average 5,915

Average8,268

Average446

Palladium

Platinum Rhodium

1Q 2Q 3Q 4Q

FY07

1Q 2Q 3Q 4Q

FY08

1Q 2Q 3Q 4Q

FY07

1Q 2Q 3Q 4Q

FY08

1Q 2Q 3Q 4Q

FY07

1Q 2Q 3Q 4Q

FY08

Average345

(Reference) Transition of commodity markets (Precious metal prices)

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