Modern Business

Project

Made By-Ankita
Arshita
Priyanka
Khushboo
Preface
Contents
1. Introduction
2. History
3.
Introduction
Honda Motor Company, Ltd is a Japanese multinational corporation
primarily known as a manufacturer of automobiles and motorcycles.
Honda is the world's largest manufacturer of motorcycles as well as the
world's largest manufacturer of internal combustion engines measured
by volume. Honda surpassed Nissan in 2001 to become the second-
largest Japanese automobile manufacturer.

Honda was the first Japanese automobile manufacturer to release a

dedicated luxury brand in North America with the debut of Acura in
1986. Aside from their core automobile and motorcycle businesses,
Honda also manufactures garden equipment, marine engines, personal
watercraft and power generators, amongst others. Since 1986, Honda has
been involved with artificial intelligence/robotics research and released
their ASIMO robot in 2000. They have also ventured into aerospace
with the establishment of GE Honda Aero Engines in 2004 and the
Honda HA-420 Honda Jet, scheduled to be released in 2011.
History
From a young age, Soichiro Honda (本田 宗一郎, Honda Sōichirō) had
an interest in automobiles. He worked as a mechanic at a Japanese
tuning shop, Art Shokai, where he tuned cars and entered them in races.
A self-taught engineer, he later worked on a piston design which he
hoped to sell to Toyota. The first drafts of his design were rejected, and
Soichiro worked painstakingly to perfect the design, even going back to
school and pawning his wife's jewelry for collateral. Eventually, he won
a contract with Toyota and built a factory to construct pistons for them,
which was destroyed in an earthquake. Due to a gas shortage during
World War II, Honda was unable to use his car, and his novel idea of
attaching a small engine to his bicycle attracted much curiosity. He then
established the Honda Technical Research Institute in Hamamatsu,
Japan, to develop and produce small 2-cycle motorbike engines. Calling
upon bicycle shop owners across Japan to take part in revitalizing a
nation torn apart by war, Soichiro received enough capital to engineer
his first motorcycle, the Honda Cub. This marked the beginning of
Honda Motor Company, who would grow a short time later to be the
world's largest manufacturer of motorcycles by 1963.

The first production automobile from Honda was the T360 mini pick-up
truck. Powered by a small 356 cc straight-4 gasoline engine, it was
classified under the cheaper Kei car tax bracket.

The first production car from Honda was the S500 sports car.

Its chain driven rear wheels points to Honda's motorcycle origins.

 Sōichirō Honda
was a Japanese engineer and industrialist, and founder of Honda Motor
Co., Ltd.. Soichiro was born in Hamamatsu, Shizuoka, Japan.

Honda spent his early childhood helping his father, Gihei, a blacksmith,
with his bicycle repair business. At the time his mother, Mika, was a
weaver. At 15, without any formal education, Honda left home and
headed to Tokyo to look for work. He obtained an apprenticeship at a
garage in 1922, and after some vacillation over his employment, he
stayed for six years, working as a car mechanic before returning home to
start his own auto repair business in 1928 at the age of 22.

In 1937 Honda began producing piston rings for small engines which
lead to manufacturing small engines to be used in motorcycles, and then
in 1948 he started producing complete motorcycles as president of the
Honda Motor Company. Honda turned the company into a billion-dollar
multinational that produced the best-selling motorcycles in the world.
Honda's excellent engineering and clever marketing resulted in Honda
motorcycles out-selling Triumph and Harley-Davidson in their
respective home markets. In 1959 Honda Motorcycles opened its first
dealership in the United States.

Honda remained president until his retirement in 1973, stayed on as

director, and was appointed "supreme adviser" in 1983. His legendary
status was such that People magazine placed him on their "25 Most
Intriguing People of the Year" list for 1980, dubbing him "the Japanese
Henry Ford." In retirement Honda busied himself with work connected
with the Honda Foundation. He died in 1991 from liver failure.
Leadership
1948-1973 — Soichiro Honda
1973-1983 — Kiyoshi Kawashima
1983-1990 — Tadashi Kume
1990-1998 — Nobuhiko Kawamoto
1998-2004 — Hiroyuki Yoshino
2004-2009 — Takeo Fukui
2009-present — Takanobu It
Front row
Chairman and Representative Director- Satoshi Aoki
President and Representative Director- Takanobu Ito
Executive Vice President and Representative Director- Koichi Kondo

Back row

Akio Hamada
Mikio Yoshimi
Atsuyoshi Hyogo
Shigeru Takagi
Tetsuo Iwamura
Corporate governance
Management structure

•Board of Directors

The Board of Directors has 21 members, two of whom are external

appointees. It supervises the execution of Honda’s business affairs and
makes decisions on matters of importance to the company, including
legal issues. The board met seven times in FY2008.

•Board of Corporate Auditors

The Board of Corporate Auditors consists of five corporate auditors,

three of whom are external appointees. Each corporate auditor audits the
directors’ execution of duties in accordance with Honda auditing
standards, auditing policies, and apportionment of responsibilities and
decisions of the Board of Corporate Auditors. Corporate auditors
conduct these audits through various means, such as attending meetings
of the Board of Directors and reviewing the status of the company’s
assets and liabilities. In addition, a Corporate Auditors’ Office has been
established to provide direct support to the Board of Corporate Auditors.
In FY2008 the Board of Corporate Auditors met 13 times.

•Decisions regarding director candidates

Candidates for director are nominated and appointed by the Board of

Directors. Candidates for corporate auditor are nominated and appointed
by resolution of the Board of Directors, subject to agreement of the
Board of Corporate Auditors.

•Director remuneration

The total amount of remuneration and bonuses of directors and corporate

auditors is determined according to criteria that reflect company
performance. Remuneration for directors and corporate auditors is based
on criteria approved by the Board of Directors, and is paid within the
extent of the maximum amount set by resolution of the Ordinary General
Meeting of Shareholders. Bonuses for directors and corporate auditors
are based on decisions of the Ordinary General Meeting of Shareholders,
taking into consideration company profits during the fiscal year, past
bonuses and other factors.

•Accounting audits

Honda has appointed KPMG Azsa & Co. as its independent auditor for
the purposes of Japan’s Company Law and Securities and Exchange
Law as well as the U.S. Securities Exchange Act.

Business execution system

•Organization

Honda has six administrative regions around the world to execute and
develop business based on its fundamental corporate philosophy. These
regional operations adopt long-term perspectives and maintain close ties
with local communities. Honda’s three business operations—
motorcycles, automobiles and power products — formulate medium-
and long-term business plans. Each operation aims to maximize its
performance on a global basis. Each functional operation, including
Customer Service Operations, Production Operations, Purchasing
Operations, Business Support Operations and Business Management
Operations, supports the other functional operations, with the aim of
increasing Honda’s operational efficiency. Research and development
activities are conducted principally at Honda’s independent subsidiaries.
Honda R&D Co., Ltd. is responsible for product research and
development, while Honda Engineering Co., Ltd. handles research and
development in the area of production technology. The Honda Group
proactively conducts research and development in advanced
technologies with the aim of creating products that are distinctive and
internationally competitive.
•Business execution officer system

Honda assigns a general manager from the Board of Directors or an

Operating Officer to each regional and functional division, as well as to
each research and development subsidiary. By ensuring swift, optimal
decision-making in each region and workplace, Honda maintains a
highly efficient business execution system.

•Executive Council

Honda has established an Executive Council, which consists of the

President, Vice President and Senior Managing Directors (for a total of
nine members). Along with discussing in advance the agendas of
meetings of the Board of Directors, the Executive Council discusses
important management issues within the scope of authority conferred
upon it by the Board of Directors. The Executive Council met 29 times
in FY2008.

•Regional Operating Boards

To enhance the independence of each administrative region and ensure

swift decision-making, regional operating boards have been established
in each administrative region to discuss important regional management
issues within the scope of authority conferred upon them by the
Executive Council.
Background

Honda headquarters building in Japan

Honda is headquartered in Minato, Tokyo, Japan. Their shares trade on
the Tokyo Stock Exchange and the New York Stock Exchange, as well
as exchanges in Osaka, Nagoya, Sapporo, Kyoto, Fukuoka, London,
Paris and Switzerland. American Honda Motor Co. is based in
Torrance,California. Honda Canada Inc. is headquartered in the
Scarborough district of Toronto, Ontario, and is building new corporate
headquarters in Markham, Ontario, scheduled to relocate in 2008; their
manufacturing division, Honda of Canada Manufacturing, is based in
Alliston, Ontario. Honda has also created joint ventures around the
world, such as Honda Siel Cars and Hero Honda Motorcycles in India,
Guangzhou Honda and Dongfeng Honda in China, and Honda Atlas in
Pakistan.
With high fuel prices and a weak US economy in June 2008, Honda has
reported a 1% sales increase while its rivals, including the Detroit Big
Three and Toyota, have reported double-digit losses. Honda's sales were
up almost 20 percent from the same month last year. The Civic and the
Accord were in the top five list of sales. Analysts have attributed this to
two main factors. First, Honda's product lineup consists of mostly small
to mid-size, highly fuel-efficient vehicles. Secondly, over the last ten
years, Honda has designed its factories to be flexible, in that they can be
easily retooled to produce any Honda model that may be in-demand at
the moment.
Honda is the 6th largest automobile manufacturer in the world as well as
the largest engine-maker in the world, producing more than 14 million
internal combustion engines each year. As of August 2008, Honda
surpassed Chrysler as the 4th largest automobile manufacturer in the
United States. Currently, Honda is the second largest manufacturer in
Japan behind Toyota and ahead of Nissan.
Honda, Nissan, and Toyota, three of the strongest vehicle companies in
the world, were still not immune to the global financial crisis of 2008, as
these companies reduced their profitability forecasts. The economic
crisis has been spreading to other important players in the vehicle related
industries as well.
Honda spends about 5% of its revenues into R&D.
Marketing

Honda's official slogan is "The Power of Dreams". They have never

used this slogan to sell their products. Mr. Honda's belief is that well
built products will sell themselves.
In 2003, Honda released its Cog advertisement in the UK and on the
Internet. To make the ad, the engineers at Honda constructed a Rube
Goldberg Machine made entirely out of car parts from a Europe
Domestic Market Honda Accord (upon which the USDM Acura TSX is
based). To the chagrin of the engineers at Honda, all the parts were taken
from two of only six hand-assembled pre-production models of the
Accord. The advertisement depicted a single cog which sets off a chain
of events that ends with the Honda Accord moving and Garrison Keillor
speaking the tagline, "Isn't it nice when things just... work?" It took 606
takes to get it perfect.
In 2004, they produced the Hate Something advert, usually immediately
followed by a shortened version of the 2005/2006 Impossible Dream
advert.
A post 2005 style Honda dealership in Moncton, Canada
In 2006, Honda released its Choir advertisement, for the UK and the
internet. This featured a 60-person choir who sang the car noises as film
of the Honda Civic are shown.
In December 2005, Honda released The Impossible Dream a two-minute
panoramic advertisement filmed in New Zealand, Japan and Argentina
which illustrates the founder's dream to build performance vehicles.
While singing The Impossible Dream (The Quest), a man reaches for his
racing helmet, leaves his trailer on a minibike, then rides a succession of
vintage Honda vehicles: a motorcycle, then a car, then a powerboat, then
goes over a waterfall only to reappear piloting a hot air balloon, with
Garrison Keillor saying "I couldn't have put it better myself" as the song
ends. The song is from the 1960s musical "Man Of La Mancha", sung by
Andy Williams.
In Australia, Honda advertised heavily during most motor racing
telecasts, and were the official sponsor of the 2006 FIA Formula 1
telecast on broadcaster channel "Ten". In fact, they were the only
manufacturer involved in the 2006 Indy Racing League season. In a
series of adverts promoting the history of Honda's racing heritage,
Honda claimed they "built" cars that won 72 Formula 1 Grand Prix.
Sceptics have accused Honda of interpreting their racing history rather
liberally, saying that virtually all of the 72 victories were achieved by
Honda powered (engined) machines, whereas the cars themselves were
designed and built by Lotus F1, Williams F1, and McLaren F1 teams,
respectively. However, former and current staff of the McLaren F1 team
have reiterated that Honda contributed more than just engines and
provided various chassis, tooling, and aerodynamic parts as well as
funding. Ayrton Senna, arguably the greatest F1 driver of all time,
repeatedly stated that Honda probably played the most significant role in
his three world championships. He had immense respect for founder,
Soichiro Honda, and had a good relationship with Nobuhiko Kawamoto,
the chairman of Honda at that time. Senna once called Honda "the
greatest company in the world". Nevertheless, the majority of victories
attributed to Honda in the advertisements were won by Formula 1 cars
which were neither built nor designed by Honda, and have little or no
connection with Honda's current F1 operations.
For the last several years in the United States, during model close-out
sales for the current year before the start of the new model year, Honda's
advertising has featured an animated character known simply as Mr.
Opportunity, voiced by Rob Paulsen. The casual looking man talks
about various deals offered by Honda and ends with the phrase "I'm Mr.
Opportunity, and I'm knockin'", followed by him "knocking" on the
television screen or "thumping" the speaker at the end of radio ads. Also,
commercials for Honda's international hatchback, the Jazz, are parodies
of well-known pop culture images such as Tetris and Thomas The Tank
Engine.
As part of their marketing campaign, Honda is an official partner and
sponsor of Major League Soccer.
In late 2006 Honda released an ad with ASIMO exploring a museum,
looking at the exhibits with almost child-like wonderment (spreading out
its arms in the aerospace exhibit, waving hello to an astronaut suit that
resembles him, etc.), while Garrison Keillor ruminates on progress. It
concludes with the tagline: "More forwards please".
Honda also sponsored ITV's coverage of Formula One in the UK for
2007. However they had announced that they would not continue in
2008 due to the sponsorship price requested by ITV being too high.
In May 2007, focuses on their strengths in racing and the use of the Red
H badge — a symbol of what is termed as "Hondamentalism". The
campaign highlights the lengths that Honda engineers go to in order to
get the most out of an engine, whether it is for bikes, cars, powerboats
— even lawnmowers. Honda released its Hondamentalism campaign. In
the TV spot, Garrison Keillor says, "An engineer once said to build
something great is like swimming in honey", while Honda engineers in
white suits walk and run towards a great light, battling strong winds and
flying debris, holding on to anything that will keep them from being
blown away. Finally one of the engineers walks towards a red light, his
hand outstretched. A web address is shown for the Hondamentalism
website. The digital campaign aims to show how visitors to the site share
many of the Hondamentalist characteristics.
The following year, at the beginning of 2008, Honda released - the
Problem Playground. The advert outlines Honda's environmental
responsibility, demonstrating a hybrid engine, more efficient solar
panels and the FCX Clarity, a hydrogen powered car. The 90 second
advert features large scale puzzles, involving Rubik's cubes, large shapes
and a 3-dimensional puzzle.
On 29 May 2008, Honda - in partnership with Channel 4 - broadcast a
live advertisement. It showed skydivers jumping from an aeroplane over
Spain and forming the letters H, O, N, D and A in mid-air. This live
advertisement is generally agreed to be the first of its kind on British
television. The advert lasted three minutes. The next flight of one of the
two planes involved resulted in a fatal crash as the plane broke apart in
mid-air.

Since 2008, Honda has become a major sponsor of the CBS gameshow
The Price Is Right. On episodes in which a Honda car makes an
appearance, both games that are played for cars use Hondas as a prize, as
well as the Showcases. Additionally, Honda's U.S. headquarters are
located in the home state of both host Drew Carey and announcer Rich
Fields (Ohio).
In 2009, American Honda released the "Dream the Impossible
Documentary Series," a collection of 5-8 minute web vignettes that
focus on the core philosophies of Honda. Current short films include
Failure: The Secret to Success, Kick Out the Ladder and Mobility 2088.
They feature Honda employees as well as Danica Patrick, Christopher
Guest, Ben Bova, Chee Pearlman, Joe Johnston and Orson Scott Card.
The film series plays at dreams.honda.com.
Product Line
Honda automobiles

2009 Accord Coupe

Starting at $22,405[1]
31 mpg[2]
Seating for 5

2009 Accord Sedan

Starting at $20,905[1]
31 mpg[2]
Seating for 5
2009 Civic Coupe
Starting at $15,305[1]
36 mpg[2]
Seating for 5

2009 Civic Hybrid

Starting at $23,650[1]
45 mpg[2]
Seating for 5

2009 Civic GX NGV

Starting at $25,190[1]
36 mpg[2]
Seating for 5
2009 Civic Sedan
Starting at $15,505[1]
36 mpg[2]
Seating for 5

2009 Civic Si Coupe

Starting at $21,905[1]
29 mpg[2]
Seating for 5

2009 Civic Si Sedan

Starting at $22,105[1]
29 mpg[2]
Seating for 5
2009 CR-V
Starting at $21,245[1]
27 mpg[2]
Seating for 5

2009 Element
Starting at $20,275[1]
25 mpg (2WD)[2]
Seating for 4

2009 Element SC
Starting at $23,270[1]
23 mpg highway (2WD)[2]
Seating for 4
2009 FCX Clarity
Range: 240 miles[3]
Seating for 4

2009 Fit
Starting at $14,750[1]
33 mpg[2]
Seating for 5

2010 Insight Hybrid

Starting at $19,800[1]
43 mpg[4]
Seating for 5
2010 Odyssey
Starting at $26,805[1]
25 mpg Highway (EX-L, Touring)[4]
Seating for 8
View 2009 Model

2010 Pilot
Starting at $27,895[1]
23 mpg (2WD)[4]
Seating for 8

2009 Ridgeline
Starting at $28,200[1]
20 mpg[2]
Seating for 5
2009 S2000
Starting at $34,995[1]
25 mpg[2]
Seating for 2

Mountain bikes
Honda has also built a Downhill racing bike, known as the Honda RN-
01. Honda has taken on several people to pilot the bike, among them is
Greg Minnaar. The team is known as Team G Cross Honda. The key
feature of this bike is the gearbox, which replaces the standard
Derailleur found on most bikes.

Engines
Honda Outboard motor on a pontoon boat
Honda is the largest engine maker in the world. Honda has a number of
firsts in many categories, including the first engine to meet the 1970 US
Clean Air Act (1975 CVCC)
Robots

ASIMO at Expo 2005

ASIMO is the part of Honda's Research & Development robotics
program. It is the eleventh in a line of successive builds starting in 1986
with Honda E0 moving through the ensuing Honda E series and the
Honda P series. Weighing 54 kilograms and standing 130 centimeters
tall, ASIMO resembles a small astronaut wearing a backpack, and can
walk on two feet in a manner resembling human locomotion, at up to
6 km/h (3.7 mph). ASIMO is the world's only humanoid robot able to
ascend and descend stairs independently.[19] However, human motions
such as climbing stairs are difficult to mimic with a machine, which
ASIMO has demonstrated by taking two plunges off a staircase.
Honda's robot ASIMO (see below) as an R&D project brings together
expertise to create a robot that walks, dances and navigates steps.
Aeroplanes
Honda has also pioneered new technology in its HA-420 HondaJet that
allows new levels of reduced drag, increased aerodynamics and fuel
efficiency thus reducing operating costs.

Honda F1

Rubens Barrichello driving for Honda

Honda entered Formula One as a constructor for the first time in the
1964 season at the German Grand Prix with Ronnie Bucknum at the
wheel. 1965 saw the addition of Richie Ginther to the team, who scored
Honda's first point at the Belgian Grand Prix, and Honda's first win at
the Mexican Grand Prix. 1967 saw their next win at the Italian Grand
Prix with John Surtees as their driver. In 1968, Jo Schlesser was killed in
a Honda RA302 at the French Grand Prix. This racing tragedy, coupled
with their commercial difficulties selling automobiles in the United
States, prompted Honda to withdraw from all international motorsport
that year.
After a learning year in 1965, Honda-powered Brabhams dominated the
1966 French Formula Two championship in the hands of Jack Brabham
and Denny Hulme. As there was no European Championship that
season, this was the top F2 championship that year. In the early 1980s
Honda returned to F2, supplying engines to Ron Tauranac's Ralt team.
Tauranac had designed the Brabham cars for their earlier involvement.
They were again extremely successful. In a related exercise, John Judd's
Engine Developments company produced a turbo "Brabham-Honda"
engine for use in IndyCar racing. It won only one race, in 1988 for
Bobby Rahal at Pocono.
Honda returned to Formula One in 1983, initially with another Formula
Two partner, the Spirit team, before switching abruptly to Williams in
1984. In the late 1980s and early 1990s, Honda powered cars won six
consecutive Formula One Constructors Championships. WilliamsF1
won the crown in 1986 and 1987. Honda switched allegiance again in
1988. New partners Team McLaren won the title in 1988, 1989, 1990
and 1991. Honda withdrew from Formula One at the end of 1992,
although the related Mugen-Honda company maintained a presence up
to the end of 1999, winning four races with Ligier and Jordan Grand
Prix.
Honda debuted in the CART IndyCar World Series as a works supplier
in 1994. The engines were far from competitive at first, but after
development, the company powered six consecutive drivers
championships. In 2003, Honda transferred its effort to the rival IRL
IndyCar Series. In 2004, Honda-powered cars overwhelmingly
dominated the IndyCar Series, winning 14 of 16 IndyCar races,
including the Indianapolis 500, and claimed the IndyCar Series
Manufacturers' Championship, Drivers' Championship and Rookie of the
Year titles. In 2006, Honda became the sole engine supplier for the
IndyCar Series, including the Indianapolis 500. In the 2006 Indianapolis
500, for the first time in Indianapolis 500 history, the race was run
without a single engine problem.
During 1998, Honda considered returning to Formula One with their
own team. The project was aborted after the death of its technical
director, Harvey Postlethwaite. Honda instead came back as an official
engine supplier to British American Racing (BAR) and Jordan Grand
Prix. Honda bought a stake in the BAR team in 2004 before buying the
team outright at the end of 2005, becoming a constructor for the first
time since the 1960s. Honda won the 2006 Hungarian Grand Prix with
driver Jenson Button.
It was announced on 5 December 2008 that Honda would be exiting
Formula One with immediate effect due to the 2008 global economic
crisis.The team was sold to former team principal Ross Brawn and
renamed Brawn GP.

Motorcycles

Honda CBR1000RR sport bike

Honda Racing Corporation (HRC) was formed in 1982 by Richard
Hynda. The company combines participation in motorcycle races
throughout the world with the development of high potential racing
machines. Its racing activities are an important source for the creation of
leading edge technologies used in the development of Honda
motorcycles. HRC also contributes to the advancement of motorcycle
sports through a range of activities that include sales of production
racing motorcycles, support for satellite teams, and rider education
programs.
Soichiro Honda, being a race driver himself, could not stay out of
international motorsport. In 1959, Honda entered five motorcycles into
the Isle of Man TT race, the most prestigious motorcycle race in the
world. While always having powerful engines, it took until 1961 for
Honda to tune their chassis well enough to allow Mike Hailwood to
claim their first Grand Prix victories in the 125 and 250 cc classes.
Hailwood would later pick up their first senior TT wins in 1966 and
1967. Honda's race bikes were known for their "sleek & stylish design"
and exotic engine configurations, such as the 5-cylinder, 22,000 rpm,
125 cc bike and their 6-cylinder 250 cc and 380 cc bikes.
1979 saw Honda return to Grand Prix motorcycle racing with their
exotic, monocoque-framed, four-stroke NR500. The NR500 featured
elongated cylinders each with 8 valves and with connecting rods in
pairs, in an attempt to comply with the FIM rules which limited engines
to four cylinders. Honda engineered the elongated cylinders in an effort
to provide the valveinant two-stroke racers. Unfortunately, it seemed
Honda tried to accomplish too much at one time and the experiment
failed. For the 1982 season, Honda debuted their first two stroke race
bike, the NS500 and in 1983, Honda won their first 500 cc Grand Prix
World Championship with Freddie Spencer. Since then, Honda has
become a dominant marque in motorcycle Grand Prix racing, winning a
plethora of top level titles with riders such as Valentino Rossi and Mick
Doohan.
In motocross, Honda has claimed 6 motocross world championships. In
the World Enduro Championship, Honda has captured six titles, most
recently with Stefan Merriman in 2003 and with Mika Ahola in 2007
and 2008.
Electric and alternative fuel vehicles

2009 Honda Civic GX hooked up to Phill refueling system

Top: Brazilian flexible-fuel Honda Civic. Below: US Honda Civic

Hybrid.
2010 Honda Insight hybrid electric vehicle (Second generation).

Honda FCX Clarity hydrogen fuel cell vehicle

Compressed natural gas

The Honda Civic GX is the only natural gas vehicle (NGV)
commercially available in some parts of the US.[23][24] The Honda Civic
GX first appeared in 1998 as a factory-modified Civic LX that had been
designed to run exclusively on compressed natural gas. The car looks
and drives just like a contemporary Honda Civic LX, but does not run on
gasoline. In 2001, the Civic GX was rated the cleanest-burning internal
combustion engine in the world by the U.S. Environmental Protection
Agency (EPA).
First leased to the City of Los Angeles, in 2005, Honda started offering
the GX directly to the public through factory trained dealers certified to
service the GX. Before that, only fleets were eligible to purchase a new
Civic GX. In 2006, the Civic GX was released in New York, making it
the second state where the consumer is able to buy the car. Home
refueling is available for the GX with the addition of the Phill Home
Refueling Appliance.

Flexible-fuel
Honda's Brazilian subsidiary launched flexible-fuel versions for the
Honda Civic and Honda Fit in late 2006. As others Brazilian flex-fuel
vehicles, these models run on any blend of hydrous ethanol (E100) and
E20-E25 gasoline. Initially, and in order to test the market preferences,
the carmaker decided to produce a limited share of the vehicles with
flex-fuel engines, 33 percent of the Civic production and 28 percent of
the Fit models. Also, the sale price for the flex-fuel version was higher
than the respective gasoline versions, around US$ 1,000 premium for the
Civic, and US$ 650 for the Fit, despite the fact that all other flex-fuel
vehicles sold in Brazil had the same tag price as their gasoline versions.
In July 2009, Honda launched in the Brazilian market its third flexible-
fuel car, the Honda City.
During the last two months of 2006, both flex-fuel models sold 2,427
cars against 8,546 gasoline-powered automobiles, jumping to 41,990
flex-fuel cars in 2007, and reaching 93,361 in 2008. Due to the success
of the flex versions, by early 2009 a hundred percent of Honda's
automobile production for the Brazilian market is now flexible-fuel, and
only a small percentage of gasoline version is produced in Brazil for
exports.
In March 2009 Honda launched in the Brazilian market the first flex-fuel
motorcycle in the world. Produced by its Brazilian subsidiary Moto
Honda da Amazônia, the CG 150 Titan Mix is sold for around
US$2,700.

Hybrid electric
Honda launched in late 1999 the first commercial hybrid electric car sold
in the US market , the Honda Insight, just one month before the
introduction of the Toyota Prius, and initially sold for USD 20,000. The
first-generation Insight was produced from 2000 to 2006 and had a fuel
economy of 70 miles per US gallon (3.4 L/100 km; 84 mpg-imp) for the
EPA's highway rating, the most fuel-efficient mass-produced car at the
time. Total global sales for the Insight amounted to only around 18,000
vehicles.
Honda introduced the second-generation Insight in its home nation of
Japan in February 2009, with release in other markets to expected
through 2009 the U.S. market will receive the new Insight in April 2009.
At USD 19,800 as a five-door hatchback it will be the least expensive
hybrid available in the US. Honda expects to sell 200,000 of the vehicles
each year, with half of those sales in the United States.
Honda has also been selling since 2002 the Honda Civic Hybrid (2003
model) in the US markets It was followed by the Honda Accord Hybrid,
offered in model years 2005 through 2007. Honda is also planning to
introduce a hybrid version of its Fit , as well as another unique small
hybrid vehicle based on the CR-Z sports car concept that it introduced at
the 2007 Tokyo Motor Show.

Hydrogen fuel cell

In Takanezawa, Japan, on June 16, 2008, Honda Motors produced the
first assembly-line FCX Clarity, a hybrid hydrogen fuel cell vehicle.
More efficient than a gas-electric hybrid vehicle, the FCX Clarity
combines hydrogen and oxygen from ordinary air to generate electricity
for an electric motor.
The vehicle itself does not emit any pollutants and its only byproducts
are heat and water. The FCX Clarity also has an advantage over gas-
electric hybrids in that it does not use an internal combustion engine to
propel itself. Like a gas-electric hybrid, it uses a lithium ion battery to
assist the fuel cell during acceleration and capture energy through
regenerative breaking, thus improving fuel efficiency. The lack of
hydrogen filling stations throughout developed countries will keep
production volumes low. Honda will release the vehicle in groups of
150. California is the only US market with infrastructure for fueling
such vehicle, though the number of stations is still limited. Building
more stations is expensive, as the California Air Resources Board
(CARB) granted $6.8 million for four H2 fueling stations, costing $1.7
million USD each.
CORPORATE
SOCIAL
RESPONSIBILITY
Conduct Guidelines
Honda group companies in each region create their own Guideline based
on the ‘Honda Conduct Guideline’.
Guided by Honda Philosophy, Honda has expanded its business globally
based on the pursuit of new dreams and the determination to make them
come true. Through these efforts, we have shared a “joy” and established
a trust with customers and society around the world. In order to further
advance our global business in each region, every Honda associate in
various countries around the world needs to share a common value at
Honda and become even more self-reliant. The “Honda Conduct
Guideline” represents the important values that have guided our actions
to date. With each one of us sharing these values, we will be able to
further gain the trust of our customers and society, helping Honda
strengthen our position as “a company that society will want to exist.”

Compliance
 Respect for the Law
 Proper understanding of the law
We will understand and abide by the letter as well as the spirit of
applicable laws, stay informed of any revisions to the law and take
the necessary courses of action.
 What to do in case of unclear interpretation
Whenever there is a doubt or unclear interpretation of the law, we
will consult with the legal department, government bodies and/or
outside experts.
 What to do if the law has been violated
Whenever a violation of the law or the risk of such an occurrence
is noticed, we will immediately report to or consult with the
supervisor or the legal department, or make a proposal to the
Business Ethics Proposal Line.
 Report/notification to government agencies
 We will properly make reports/notifications to government
agencies as required by law.

 Respect for Company Rules

 Proper understanding of company rules
We will understand and abide by the letter as well as the spirit of
related company rules, stay informed of any revisions and take the
necessary courses of action.
 What to do in case of unclear interpretation
Whenever there is a doubt or unclear interpretation of a company
rule, we will consult with the department that created the rule to
confirm proper understanding.
 What to do if rules have been violated
Whenever a violation of a company rule or the risk of such an
occurrence is noticed, we will report to or consult with the
supervisor or make a proposal to the Business Ethics Proposal
Line.
 Report/notification
We will properly make reports/notifications as required by
company rules.

 Respect for Social Norms

As a member of society, we will behave ethically and in
accordance with the common sense of the community in which we
operate.
 Traffic Safety
In order for Honda to be a leader in traffic safety, we will abide by
traffic rules and drive safely.
 Environmental Protection
To help Honda actively promote environmental protection, we will
proactively seek the means to protect the environment.
1. Proper processing of waste and pollutants
 We will strive to minimize and properly process waste and
pollutants at each step of our activities, in development,
production, logistics, sales, service, and, ultimately, disposal.
2. Efficient use of natural resources and recycling
We will strive to make efficient use of energy and other
natural resources, and continue to advance our recycling
efforts.
3. Legally required measurements, recording and reporting
We will conduct measurements, recording and reporting on
the environment related to soil, underground water, air, noise,
smells, etc., as required by environmental laws or company
rules.
 Contributions to Society
In order for Honda to be a good corporate citizen with strong roots
in the community and society at large, we will actively participate
in activities that contribute to the well being of society.
1. Community Participation
We will become active members of the local community
and participate in local activities.
2. Social welfare
We will actively support people with mental and physical
difficulties.
3. Disaster relief
We will actively support disaster relief activities.
4. Volunteer activities
We will actively encourage, support and participate in
volunteer activities.
 Management of Information
In order for Honda to properly manage customer- and business
partner-related information, we will pay the utmost attention to the
appropriate handling of confidential information.

1. Management of Information Security

We will appropriately manage information security such as the locking
of storage cabinets, and carefully managing computers and security
passwords.
2. Confidential Information Disclosure Prevention
We will not release confidential information or personal information
regarding customers, business partners, and associates.

 Safety and Hygiene

We will strive to provide a safe, hygienic and comfortable work
environment for every Honda associate.
1. Providing for a comfortable working environment
We will provide a comfortable working environment by
maintaining an orderly, well-organized and clean workplace.
2. Respect for smoking rules
We will respect rules and etiquette regarding smoking.
3. Accident prevention
We will strive to manage potentially dangerous processes and
areas to prevent injuries on the job.
4. Action to be taken when an unsafe operation is discovered
Whenever an unsafe process or area is noticed, we will
immediately report to the supervisor.
5. What to do in case of disaster
Whenever a disaster occurs, priority must be given to protecting
human life and preventing the disaster from worsening.
6. Emergency contacts
To ensure quick action, everyone will be informed in advance of
what to do and who to contact in the event of an emergency
situation.

 Discrimination
In order to make sure Honda is a fair, discrimination-free
company, we will affirmatively accept the uniqueness and
differences of people around the world and act in adherence to the
principle that all people are created equal.
1. Prevention of discrimination
 We will not discriminate according to place of birth, nationality,
beliefs, religion, sex, race, ethnic origin, age, physical or mental
disability, legally protected medical condition, hobbies,
education, or status within society.
2. Prohibition of Use of Discriminatory Language
We will not use words/expressions considered discriminatory or
that may be interpreted as discriminatory.
 Protection of Privacy
To make sure Honda emphasizes the privacy of individuals, we
will do our utmost to respect and protect privacy.
1. Respect for Privacy Protection Laws
We will abide by the letter as well as the spirit of laws
protecting individual privacy.

2. Prevention of Unauthorized Revelation of Private Information

Before providing private information to a third party, we must
first obtain the approval of the person(s) concerned.
 Business Transactions
To make sure Honda maintains a fair and sound relationship with
our business partners, we will conduct fair, sound transactions.
1. Selection of business partners
When we need to purchase products or services, we will
select a business partner by comparing and evaluating in an
impartial manner the terms and conditions offered by various
business partners.
2. Prohibition on excessive gifts and benefits
In our dealings with business partners, we will neither offer
nor accept gifts or benefits beyond that normally considered
appropriate.
3. Prohibition on improper exercise of positions and authorities
We shall not exercise positions or authorities inappropriately
to exact improper benefits from business partners; nor will
we give business partners improper benefits.
 Relationships with Governmental Agencies
 As representatives of an independent corporation, we will keep our
relationships with government officials in a straightforward and
sincere manner.
1. Abiding laws and regulations for ethics
We will act in a manner that recognizes government officials’
ethics and what are considered conflicts of interest under the
relevant laws and regulations.
2. Prohibition on excessive gifts and benefits
We will not offer government officials any gift or benefit
exceeding the social custom or socially accepted limits.
 Communication
As a highly accountable company, we will value communications
with society.
 Environmental
initiatives in FY 2008
Product development initiatives

•Emissions enhancements

Honda Fit

Exhaust purification (high-precision air-fuel ratio control) system sensor

Integrated cylinder head exhaust manifold

The completely remodeled, second-generation Honda Fit was released in

October 2007. It is available with a 1.3-liter or 1.5-liter i-VTEC engine,
both of which are certified by Japan’s MLIT as very low-emissions
engines. First introduced to Japan in 2001, the Fit is now sold in 115
countries worldwide, with cumulative sales surpassing 2 million units.
With the new Fit we aimed to maintain a highly efficient system for
cleaning exhaust emissions while decreasing the use of rare precious
metals. The latest model features a newly developed integrated cylinder
head exhaust manifold and an extremely heat-resistant catalytic
converter. The aluminum of the exhaust ports speeds up catalytic
activation immediately after the engine is started, allowing us to reduce
the quantity of precious metals used in the converter. Instead of the
conventional approach, in which two oxygen sensors are used for air-
fuel ratio control, the Fit features a linear air-fuel ratio sensor, an oxygen
sensor and an air-flow sensor. This high precision air-fuel ratio control
greatly improves environmental performance.
•Fuel economy enhancements

Torque converter-equipped CVT

1.3-liter i-VTEC engine

The new Fit achieves a class-leading fuel economy of 24.0 kilometers

per liter* thanks to its newly developed 1.3-liter i-VTEC engine and a
newly designed torque converter—equipped continuously variable
transmission (CVT). The Fit exceeds Japan’s FY2011 fuel efficiency
standards by 25%. Its 4-valve i-VTEC engine balances fuel economy
and high power output. It boasts increased fuel economy with improved
combustion efficiency through the use of only one valve and the
implementation of low-friction technology. The pistons have a patterned
molybdenum disulfide coating (a world’s first) and an optimized piston
skirt configuration. The Fit features various other friction-reducing
technologies, including a crank embedded with molybdenum disulfide, a
narrowed cam chain and an auxiliary belt automatic tensioner. The
newly developed CVT with torque converter increases driving
performance from a standing start while a broad lock-up clutch helps
increase fuel economy. The Fit also features a new creep control system.
This provides optimized creep control when idling, driving at low speeds
and driving uphill (the latter is made possible using an inclination
sensor). Pressing the brake stops creep force, slowing the car and
moderating fuel consumption.
Home Energy Station IV and solar cell hydrogen stations:
experimental operation continues

Home Energy Station IV

Honda is moving ahead with research into hydrogen production and

supply systems to promote the widespread adoption of fuel cell vehicles.
In FY2004 we began experimental operations of our Home Energy
Station, a cogeneration system that generates hydrogen from natural gas
to provide heat and electricity for the home and fuel for a hydrogen-
powered vehicle. In 2007 we introduced the Home Energy Station IV,
beginning experimental operations in Torrance, California. To make the
new technology even more suitable for the average household, the focus
was placed on high efficiency and compactness. Previous Home Energy
Station systems were equipped with a separate purifier and fuel cell. By
unifying these components and introducing the ability to switch from
hydrogen refining to power generation, the system’s size has been
reduced 70% compared to the first-generation model. A household with
a Home Energy Station IV and an FCX Clarity could reduce its carbon
footprint by approximately 30% and its energy costs by approximately
50% compared to a household driving a gasoline-powered vehicle and
using conventionally generated electricity. In California, Honda is also
continuing to develop its solar-powered Hydrogen Stations, which use
solar energy to produce hydrogen from water.
The SDH 125-T23: complying with China's emissions regulations

Introduced to the Chinese market in July 2007, the SDH 125-T23 is a

carburetor-equipped scooter that complies with China’s National
Standard III emissions standards, which went into effect in July 2008. Its
primary exhaust-cleaning technology consists of streaming the exhaust
into two inline catalytic converters and introducing a secondary airflow
between them. The upstream catalytic converter reduces NOx levels,
while the downstream catalytic converter oxidizes CO and HC, reducing
emissions of these substances. Ignition optimization and modifications
in the structure of the carburetor have allowed for quicker startup
operation of the catalytic converter. This results in improved emission
levels and an extremely clean-running vehicle.
Global operations
At 67 production facilities in 24 countries and at 43 research and
development facilities* in 13 countries, about 178,000 Honda associates
help some 24 million customers each year. Our global operations have
grown because Honda delivers genuine satisfaction and has a policy of
manufacturing products close to the customer. In accordance with this
policy, Honda’s global operations are divided into six administrative
regions responsible for local operations. Hiring associates and procuring
parts and materials locally, and engaging in philanthropic initiatives in
the communities that host our operations, we have promoted the
independence of our local management and sales operations. At the
same time, to ensure optimal, integrated and forward-looking planning
for each region, certain functions related to motorcycle, automobile and
power products production, as well as customer service, purchasing,
administration and other areas, are overseen worldwide. The Honda
Group, which comprises 507 companies worldwide, operates in
accordance with shared conduct guidelines. These help member
companies and their associates appropriately evaluate and manage risk,
comply with laws and regulations, maintain a high level of transparency
in business operations, and work as one to maximize customer trust and
the value of the Honda brand.
As on march 31,2008
Financial information
(consolidated)
March March March March March
  31, 31, 31, 31, 31,
2004 2005 2006 2007 2008
Net 8,162, 8,650, 9,907, 11,087, 12,002,
sales 600 105 996 140 834
Sales
and Inco
inco me
641,9 656,8 814,6 792,86 895,84
me befor
27 05 17 8 1
(milli e
ons taxes
of
Net
yen) 464,3 486,1 597,0 592,32 600,03
inco
38 97 33 2 9
me
Research &
development
448,9 467,7 510,3 551,84 587,95
expenditure
67 54 85 7 9
(millions of
yen)
Capital 287,7 373,9 457,8 597,95 668,22
expenditures 41 80 41 8 8
(millions of
yen)
Sales 1,628, 1,699, 1,694, 1,681,1 1,585,7
Japan
by 493 205 044 90 77
regio
Overs 6,534, 6,950, 8,213, 9,405,9 10,417,
n
eas 107 900 952 50 057
(milli
ons
8,162, 8,650, 9,907, 11,087, 12,002,
of Total
600 105 996 140 834
yen)
Number of 131,6 137,8 144,7 167,23 178,96
employees 00 27 85 1 0