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Brazil – Honda Begins Construction of New Automobile Production Plant in Brazil

Honda Automoveis do Brasil Ltda. (HAB), the Honda automobile production and sales subsidiary in Brazil, today held a ceremony to mark the start of construction of its new automobile production plant in the city of Itirapina in the state of Sao Paulo (approximately 200km northwest of the city of Sao Paulo). The ceremony was attended by approximately 300 guests, including the Governor of Sao Paulo State, government and community officials, suppliers to Honda, as well as Takanobu Ito, President & CEO of Honda Motor Co., Ltd.

With an annual production capacity of 120,000 units, the new plant is scheduled to become operational in two years, in 2015. Including the acquisition of the 5.8 million square meter (m2) site, the purchase of equipment and construction of the plant building, the total investment for the new plant is expected to be approximately 1 billion Brazilian Reais (approximately 43 billion yen*). The new plant will employ approximately 2,000 associates. HAB plans to begin production at the new plant with the all-new Fit, and then increase the model line-up for production of Fit-class compact vehicles, for which demand is high on a global basis. As a part of HAB's efforts to address environmental concerns, the new plant will employ shorter production processes and introduce the latest technologies in the painting process. Moreover, HAB will strive to establish a highly efficient production system at the new plant through various approaches including making the optimal use of automation technologies.

Combining the production capacity of the new plant with the existing plant in Sumare, HAB's total annual automobile production capacity will double from the current 120,000 units to 240,000 units. Moreover, with the goal to strengthen local development capabilities in Brazil, Honda is establishing a new automobile R&D center within the plant in Sumare, which will start full-scale operations by the end of this year. The strengthened local development capability will enable Honda to deliver an increasing number of attractive products developed to accommodate the needs of local customers in Brazil. With the enhancement of the product lineup and doubling of the production capacity, Honda will further expand its automobile sales in South America.

Comment by Takanobu Ito, President & CEO of Honda:

"As the world's fourth largest market, Brazil is one of the most important markets in the world for Honda. We are building up our local R&D capabilities, and together with this new auto plant, we will continue to deliver products 'with speed, affordability, and low CO2 emissions' that exceed the expectations of our customers in Brazil."

Honda began motorcycle business in Brazil in 1971 and production in 1976. Honda's cumulative investment in motorcycle business has reached approximately 3.7 billion Brazilian Reais. Honda's automobile production in Brazil started in 1997, and Honda's cumulative investment in automobile business in Brazil, including this new plant, will reach approximately 3.5 billion Brazilian Reais. Furthermore, aiming to be more proactive in using renewable energy to minimize the environmental footprint of its business activities, Honda has invested approximately 100 million Brazilian Reais (approximately 4.3 billion yen*) for a wind power generation business. The construction of the new wind farm, which will be operated by Honda Energy do Brasil Ltda., started in October, 2013, and is scheduled to become operational in September 2014. The wind farm is expected to generate electricity which is equivalent to Honda's current annual electricity needed for automobile production in Brazil (approximately 95,000 MWh).

Calculated based on the exchange rate of 1 Brazilian real = 43 yen
About Honda Automoveis do Brasil Ltda. (HAB)

Establishment:    May 1996
Capital Investment:    R$882.78 million

Capitalization Ratio:    100% Honda South America Ltda.
Representative:    Masahiro Takedagawa, President
Location:    Sumare, Sao Paulo, Brazil

Business:    Production, sales and R&D of automobiles
Products:    Civic, Fit, City
Production Capacity:    120,000 units/year

Employment:    Approximately 3,500 associates
Lot size:    1.7 million square meter (m2)

Start of Production:    October 1997 (Civic)
Cumulative production volume:    1.056 million units (as of the end of 2012)
Cumulative investment amount:    Approximately 2.5 billion Brazilian Reais (as of the end of 2012)
About the new HAB automobile production plant

Location:    City of Itirapina in the state of Sao Paulo (approximately 200km northwest of the city of Sao Paulo)
Products:    All-new Fit and Fit-class compact cars
Lot size:    5.8 million square meter (m2)
Production Capacity:    120,000 units/year

Source: honda.com

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