Address by Takeo Fukui, President and CEO, Honda Motor Co., Ltd. - 2004 Honda Meeting

8/24/2004 7:41:20 PM

Corporate Communications Division, Honda Motor Co., Ltd.

Our new Mid-Term Plan begins next fiscal year (April 1, 2005). Last month, I revealed our directions for this new Mid-term. We will further strengthen Honda's uniqueness by enhancing initiative, technology and quality focusing on our "Three Realities Principle" of going to the real spot, focusing on the real situation and basing our decisions on reality in each of four areas: research and development, production, sales, and the "leader role" of Honda's Japan operations.

Our goal is always to provide genuine satisfaction to customers worldwide. To do this, more than anything else, we need to be creative in our product development. For this reason, research and development is the most important focus for Honda. Today, I'd like to talk about three elements of our research and development effort to which we're dedicating increased attention and energy.

The first element is fun: the enjoyment of driving a car, riding a motorcycle, or using any of our products. We will further strengthen the area of "fun" as one of the unique characteristics that sets Honda apart.

The second element is safety and environmental technologies. These are the key areas for sustainable mobility. In order to keep creating the fun of mobility for future generations, we will set a high target and proactively take on challenges ahead of what is required.

The third element is strengthening R&D capabilities to create core elements of our uniqueness. For that, we have upgraded our research facilities to enhance the precision of reproducing real-life situations.

Now let me update you on our work in these three important directions.

First, I want to talk about fun. Honda is proactive in developing advanced control systems based on intelligent technologies that make driving more enjoyable. Honda will continue to introduce intelligent technologies and advanced control systems to create new values that provide our customers smart fun.

In addition, we are displaying here today some of our products and technologies in the areas of motorcycles and power products, that provide the fun of riding and using that enrich the lives of Honda customers. I hope you enjoy this opportunity to experience them.

Second, in the area of environmental technology, Honda is committed to the development of fuel cell systems and believes that this clean technology may play a key role as an alternative to the internal combustion engine. And we have been continuing our work to develop and implement fuel cell technology for automobiles, motorcycles, and power products. In fact, we have already developed a 125cc size scooter with the compact Honda FC Stack system.

As part of the effort to realize distributed electricity generation, Honda has developed and is today displaying a new compact fuel cell generator for home use. Pursuing the dream of a hydrogen-based society of the future, we're continuing a broad-based research and development effort.

Honda is also focused on safety. Honda's goal is to promote "safety for everyone", by applying technologies for the protection of automobile occupants, motorcycle and bicycle riders, and pedestrians.

For instance, one of our research objective is to build vehicles that help people avoid accidents by anticipating danger. And we are researching the technology to improve motorcycle collision safety as well.

As the world's leading motorcycle manufacturer, Honda is particularly passionate about motorcycle safety. At our Asaka R&D Center we've created a new organization dedicated to motorcycle safety research.

Prominent among our achievements in safety technology so far, the combination of Honda's Hydraulic Combined Brake System with the Anti-Lock Braking System is one of the technologies to improved motorcycle safety. Let me give you a few more details of our plans for the implementation of these important technologies.

By the end of 2007, the Hydraulic Combined Braking System with ABS will be introduced worldwide on all new models in the large scooter, touring bike and 250cc-or-larger sports bike categories. And by the end of year 2010, we plan to make this system available for all 250cc-or-larger motorcycles, except those designed exclusively for off-road use. For bikes designed for both on- and off-road riding, an ABS system will be available. .

The implementation of the Hydraulic Combined Braking System with ABS provides consistent braking under a wide range of weather and roadway conditions. As a result we believe it will help make the fun of riding a motorcycle accessible to a broader range of people.

A new automobile safety technology, the Intelligent Night Vision System, will be implemented in the new Legend this fall in Japan. In addition to conventional night vision technology, the new system uses dual cameras to detect pedestrians in or approaching the vehicle's path and provides the driver visual and audio cautions--a world's first.

Third, we have added new test courses at our Proving Grounds in Tochigi Prefecture and in Takasu, on the northern island of Hokkaido. Using these facilities, we will further advance the vehicle maneuverability under more severe driving conditions and research for the advanced vehicle control systems.

To summarize, in the area of research and development, Honda is developing new motorcycles, automobiles and power products that exceed customer expectations, adding value and providing new forms of smart fun. To this end, we are pursuing new safety and environmental solutions, and strengthening the fundamentals, further upgrading our R&D facilities and operations. We see many challenges ahead, and unlimited possibilities.

As many of you know, I became president of Honda last year, and this is my first Honda Meeting, where we present new products and technologies and talking with interested experts. I have been looking forward to having such an opportunity. Today I sincerely hope that you will not hesitate to share with me and my colleagues your most valuable opinions.

I am very grateful for your time and attention. Thank you.