Honda and Jialing Announce Business Direction in China

TOKYO, Japan, April 11, 2005 - Jialing-Honda Motor Co., Ltd., a motorcycle and power products production and sales joint venture of Honda Motor Co., Ltd. and China Jialing Industrial Co., Ltd. (Group) in China, today announced that the company has agreed to change the scope of its business and allocate its corporate resources to a single focus on power products business in order to pursue furthergrowth in the years to come.

The power products market in China has been growing rapidly over the last several years especially for electric generators. By focusing on production and sales of power products, Jialing Honda will continue fulfilling customer needs and increasing the efficiency of its business with the goal of expanding both the size and profitability of the business. Jialing-Honda will implement strategies to establish the new business plan while limiting any inconvenience to its current customers and business partners.

Honda and China Jialing Industrial Co. have also agreed to further strengthen their technological partnership in the motorcycle industry, which was established in 1981. Toward this end, the two companies will strengthen dialogue at the top management level, cooperate in areas including intellectual properties and environmental protection and strengthen relationships in various areas including manufacturing technologies, quality control, and human resource development. Moreover, Honda will add new models to be manufactured by China Jialing Industrial Co.

Honda and China Jialing Industrial Co. formed a technological partnership and began motorcycle production in 1981, which pioneered Honda's operations in China. In 1993, the two companies established a joint venture, Jialing-Honda, and began production of motorcycle engines (in 1994), which evolved into the production of complete motorcycles (in 1996). The production and sales of power products began in 2002.

Jialing-Honda has been manufacturing globally popular general-purpose engines, GX160 and GXV160, and pumps and lawn mowers equipped with these engines for the Chinese market as well as for exports of finished products to Europe, Japan, Australia and other countries and components to America.

About Jialing-Honda Motors Co., Ltd.
Establishment: January 1993
Capital: US$35.7 million
Capitalization ratio: 50% Honda Motor Co., Ltd.
50% China Jialing Industrial Co., Ltd. (Group)
Locations: Chongqing City, China
Representatives: Chairman: Jing Bo / President: Tsugumichi Hatakeyama
Employment: Approximately 1,050 associates
Production started: October 1994
Production models: General-purpose engines, lawn mowers, pumps
Production capacity: Power products: 300,000 units/year

Source: HondaWorldwide

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