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Worldwide Operations

Honda is working to strengthen its environmental offerings. In early 2009, the company introduced a new Honda Insight hybrid car with a focus on affordability as the key to expanding the market appeal and accessibility of fuel-efficient hybrid technology. Further, the company is introducing two new hybrid vehicles in 2010 — the CR-Z sporty hybrid coupe and a hybrid version of the next-generation subcompact Honda Fit. Together with the Civic Hybrid and Insight, Honda expects global sales of hybrid models to account for roughly 10% of its global automobile sales. In March 2010, cumulative sales of Honda hybrid vehicles worldwide exceeded 488,000 units. The company is also working to develop new hybrid technology for application to larger passenger cars and light trucks, as well as hybrid models for its Acura luxury brand. Also, in March 2009, Honda entered into a joint development agreement with GS Yuasa under the auspices of a new joint-venture company called Blue Energy Co., Ltd., to pursue the development, manufacturing and sales of advanced lithium-ion batteries for hybrid vehicles. Blue Energy Co. began construction on its new Osadano Plant in Fukuchiyama, Kyoto, Japan, in the spring of 2009 with battery production scheduled to start around the fall of 2010.

Honda has also worked to advance practical alternatives to petroleum and the internal combustion engine. In 2002, Honda became the world’s first automaker to market a fuel cell vehicle certified by the U.S. EPA and the state of California. In 2004, Honda introduced an FCX with the breakthrough ability to start and operate in sub-zero temperatures. And in November 2007, the company introduced the FCX Clarity, a next-generation fuel cell electric vehicle (FCEV) featuring the more compact, powerful and fuel-efficient Honda V-Flow fuel cell stack, which facilitated the creation of the first FCEV with a low-floor sedan profile and performance that rivals a gasoline-powered vehicle. Retail leasing of the production FCX Clarity to selected customers in Southern California began in July 2008.

The environmental challenge does not apply only to automobiles. For two- wheeled vehicles, Honda produces 4-stroke engines for all mass-production motorcycles and is advancing new technologies to further reduce emissions and improve fuel economy, including electronic fuel injection (PGM-FI). Honda was

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the first company with an entire lineup of high-performance outboard motors that met the U.S. EPA’s stringent year 2006 exhaust emission standards. In April 2010, the company also announced plans to begin leasing its EV-neo electric scooter, with lithium-ion battery technology, to consumers in Japan in December 2010.

Road Safety

Honda has a well-established history of leadership in the development and application of advanced safety technologies and the real world safety performance of all its products. Honda is continuing its efforts to further enhance safety for all road users — including drivers and passengers of small and large vehicles, motorcycles and ATV riders, and also pedestrians — through advanced testing activity and new developments in safety technology and vehicle design.

Honda is also a leader in the development of advanced safety research and testing capabilities. In 2000, Honda opened a state-of-the-art indoor vehicle-to- vehicle crash safety testing facility in Tochigi, Japan. The facility has played a key role in the development of many crash safety improvements. In 2003, Honda R&D Americas opened a 78,000-square-foot Advanced Safety Research laboratory at its Ohio Center for new vehicle development. The laboratory features one of the world’s most sophisticated high-resolution crash barriers and the world’s first pitching crash simulator.

In its efforts to improve safety for all road users, Honda is expanding the use of features designed to mitigate injuries to pedestrians in a collision with an automobile, including collapsible hood structures and hood hinges, specially designed front frame construction, and breakaway windshield wiper pivots. These features are already in use in millions of Honda vehicles worldwide. Further, Honda independently developed the POLAR II pedestrian crash test dummy to assist in this research effort. Honda has made POLAR II available to government and other organizations in the U.S., Japan and Europe in the cooperative effort to advance pedestrian protection. In 2008, the company introduced its new POLAR III dummy with the aim of reducing lower back and upper leg injuries common in vehicle-pedestrian collisions.

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