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MOTORCYCLE – Honda 2005 Sales Plan: 12.5 Million Cycles

Japan’s Honda Motor Co. Ltd. says it expects worldwide motorcycle sales of 12.5 million units in 2005. Official sales figures have not been released, but the company says its 2004 worldwide sales forecast for its motorcycle business was 10.7 million units, up 23% from 2003.
In a year-end statement, Takeo Fukui, president and CEO, Honda Motor Co., Ltd., said the escalating price of crude oil and sudden fluctuations in currency exchange rates were major factors in the past year’s global business environment.
Fukui said a main part of Honda’s plan for the future is to develop a corporate structure to buffer the company from exchange rate fluctuations and other changes in the business climate “by increasing the self-sufficiency and autonomy of each regional operation and by improving quality, cost and delivery in our parts sourcing efforts.”
Regarding the United States, Fukui said ATV production in North America will be consolidated at the South Carolina plant, while production of models such as the TRX450R will be transferred from Ohio to the Kumamoto plant in Japan, in order to further strengthen Japan’s function as the global hub in supporting expansion of overseas operations.

Fukui said Honda has completed its goal to introduce four-stroke engines for all of its models (except specialized models). For the future, Honda has decided to equip more scooters with programmed fuel injection (PGM-FI) by the end of 2007, and to build most motorcycles with PGM-FI by the end of 2010.
In the area of safety, Fukui said Honda will equip all 250cc class or larger touring and sports motorcycles and large scooters with a “combined brake system,” incorporating a conventional brake with an anti-lock brake system by end 2007. He said all Honda motorcycles 250cc or larger, except off-road models, will be equipped with this type of brake by 2010.

Honda is experiencing major growth in Asia. The company’s annual cycle production in India reached roughly 3.1 million units, while the annual production capacity in Indonesia is likely to expand to three million units when a third plant becomes operational in 2005. In China, both Sundiro Honda’s Tianjin plant and Wuyang-Honda’s Guangzhou plant will be replaced by more advanced plants by the beginning of 2005 and spring 2006, and a Shanghai branch of Honda Motor (China) Investment Co., Ltd. will begin operations in the spring of 2005.

Honda’s 2004 worldwide sales forecast for power products was 5.5 million units, up 10% from 2003. For 2005, the worldwide sales plan is set at 6 million units.
A new engine series will debut in 2005. The company is using its proprietary electronic control technologies to build a cleaner next-generation general-purpose engine with improved ease of use, high fuel efficiency, and low noise.
The power product business will further benefit from the company’s new general-purpose engine plant that began production in Kumamoto this month. The plant has an annual production capacity of 1.25 million units, and Fukui said production of general-purpose engines in Japan will be consolidated there to further improve production efficiency.

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