Remarks by Takeo Fukui - 2005 NAIAS Auto Show

Detroit January 11, 2005

Good morning everyone. Thank you for joining Honda again today.

Honda is at its best, when we are creating new value for our customers. We achieve this when Honda associates take initiative setting impossible targets ... and then create new technologies to achieve them. The value of this initiative can be seen in our newest efforts to advance safety and the environment ... even as we maintain our passion for fun-to-drive products.

When I joined Honda 35 years ago ... we were heading in a challenging new direction ... to create clean engine technology. I clearly remember that our entire team took initiative ... focused on the goal of leaving "blue skies for our children." The result was the cleanest internal combustion engine in the history of the industry. Today, these words remain powerful and clear within Honda. Importantly ... this is not a single mission. It includes a commitment both to reduce emissions ... and improve fuel economy. And to introduce the most advanced technology across our entire lineup ... not just one or two models.

This fall, we will begin launching an all-new Civic. This will be the 8th generation Civic ... with total global production now approximately 16 million units. And it remains a benchmark among compact cars. In order to exceed these global customer expectations, the next generation global Civic lineup will include 2-, 3-, 4- and 5-door models. It will be produced in all six of Honda's regional operations.

The concept for the new Civic will focus on emotion and a fun-to-drive spirit. I am excited about the ability of the new Civic lineup to meet the needs of people who love to drive. To achieve this direction ... we have designed a completely new engine and body.

In fact ... Civic will offer four advanced powerplants in its first year on the market. This is an industry first. The new Civic will have Honda's latest i-VTEC engine ... with new technology that achieves even higher fuel economy and low emissions. This means every Honda and Acura sold in the U.S. will have a next generation engine. We also will introduce the Civic Diesel in Europe with Honda's award-winning diesel engine. The natural gas Civic is the cleanest internal combustion engine in the world and will continue to be made in Ohio. And a new Civic Hybrid will have a hybrid system with significantly higher fuel economy and performance.

Honda is the first automaker to offer three different hybrid models ... including two of the industry's top selling models. And we are advancing this technology for future expansion. But we believe the effort to improve fuel economy should not be limited only to hybrids. We also have introduced Variable Cylinder Management technology to the Honda Odyssey and Accord Hybrid. This technology has achieved the optimal balance between high performance and superior fuel economy during highway driving. This fall, we will add this cylinder cut technology to the Honda Pilot. This means we are adding this technology to our top selling V-6 light truck models. And we have made a major commitment for the future ... with an all-new research facility in Japan. This facility is focused on achieving the ultimate in fuel efficiency through internal combustion engine technology.

We also continue to advance fuel cell vehicle technology. We have 11 fuel cell vehicles in the U.S. ... in the hands of customers now ... including the state of New York. This year ... we will achieve another world's first. We plan to put the FCX in the hands of an individual customer for the first time in history. This is just a first step ... but it demonstrates that Honda's fuel cell technology is ready for real world use.

But we haven't stopped with development of a vehicle. Honda associates are taking initiative to develop a fueling infrastructure. This includes a home refueling unit that produces hydrogen from natural gas. By testing this device in New York ... together with the Honda FCX ... Honda is taking a comprehensive approach to advance both the vehicle and a hydrogen-based transportation system. We believe this technology will be a primary fuel source in the future.

The strategy of applying advanced technology across our entire lineup ... that has been so important to Honda's environmental leadership ... we are applying to the area of safety as well. We call our commitment "Safety for Everyone" ... because we believe everyone has the right to safety no matter how much they pay for their vehicle ... or the size of that vehicle. To achieve this ... we have created new safety technologies ... that will be standard equipment on virtually every Honda and Acura vehicle in North America.

Honda engineers developed collision compatibility technology that makes our customers safer ... and makes our cars and trucks less aggressive to people riding in other vehicles. It also includes pedestrian safety technology ... now on more than two million of our vehicles on American roads.
Now ... we are introducing another new safety technology in America. Our Acura brand is a technology leader in so many areas. This fall, the Acura RL will introduce the world's most advanced Collision Mitigation Brake System. This system uses millimeter wave radar ... to detect a collision before it happens ... it alerts the driver ... and applies braking force if a collision cannot be avoided. It is natural for Acura to lead the industry in this advanced technology.

However ... safety is not only for performance luxury sedans. The Honda Accord is the only midsize car to offer all of these standard features you see here ... including side curtain air bags. The next generation Civic in the U.S. will introduce this same standard safety equipment to the compact segment.

Finally ... an important area where the initiative of Honda people creates new value is in the challenge of racing. Racing is not a mandate of our company. It is the spirit of Honda people. Through their efforts, last year, Honda won 14 races to earn the IndyCar Triple Crown. This year ... we plan to take the checkered flag in Formula-1 racing as well. In Formula-1, we have been challenging not only to develop the engine ... but also the chassis. This is a big challenge ... but it is helping Honda advance our technology ... and also our people.

By having this kind of fun as a company ... by continuing our commitment to "blue skies for our children" ... by offering Safety for Everyone ... and by advancing products that are fun-to-drive... Honda will not only meet the needs of our customers ... we will achieve our goal of being a company that society wants to exist. Thank you for your attention. And have a good year.