Honda 2007 Annual Report Download - page 10

8
To Our Shareholders
The FCX Concept fuel cell vehicle, which
offers greatly improved environmental and
driving performance
In Europe, we have experienced an increase in sales of locally
manufactured models with diesel engines, mainly the new Civic and the
new CR-V. In response, we plan to raise production at our U.K. plant to
its annual capacity of 250,000 units in late 2007.
In China, Guangzhou Honda Automobile Co., Ltd., an affiliate accounted
for under the equity method, began operating a second factory in Septem-
ber 2006. Together with the annual production capacity of this plant, which
specializes in producing automobiles for export, our total annual production
capacity in China has reached 530,000 units. In March 2007, operations
began at a new plant in China that manufactures transmissions and engine
parts, raising our local content and cost performance. In April 2007,
Guangzhou Honda established Guanzghou Honda Automobile Research &
Development Co., Ltd. The purposes of this company are to promote local
autonomy, enhance product development and enhance our ability to deliver
products that meet the needs of clients in this market.
In the rapidly growing Indian market, in addition to raising annual
production from 50,000 units to 100,000 units in 2007, we have begun
building a second factory with an annual capacity of 60,000 units that
will begin operations at the end of 2009.
Demand for motorcycles and automobiles in South America continues to
grow, spurred by strong economic performance. In Brazil, in January 2007
we raised annual capacity at our motorcycle plant from 1 million units to
1.35 million units, and this level is scheduled to rise to 1.5 million units by
the end of 2007. At our automobile plant, we also plan to double annual
capacity to 100,000 units in mid-2007.
Strengthening Our Efforts to Reduce Our
Environmental Footprint
Concluding on the theme of strengthening our efforts to reduce our environ-
mental footprint, Honda currently puts the highest priority on its efforts to
address global environmental issues. We have announced targets for
reducing CO2 emission levels for all products and manufacturing activities
throughout the world, and we are progressing diligently toward these goals.
In terms of products, we are introducing new technologies to raise the fuel
efficiency of gasoline-powered automobiles, showcased in the advanced
VTEC*2 engine and the Variable Cylinder Management System*3. We are
enthusiastically integrating advanced environmental technologies into our
products. For example, in 2009 we plan to introduce a new dedicated hybrid
vehicle, a clean diesel engine that will achieve tailpipe emissions on par with
gasoline-powered automobiles, and a new fuel cell vehicle.
In manufacturing, we are stepping up efforts to reduce the environmental
impact of each of our factories. We are also conducting broad-ranging
research and development on a variety of energy-related production topics,
such as using biotechnology to produce ethanol and solar power to
generate hydrogen.
*2 VTEC: Variable Valve Timing & Lift Electronic Control System
*3 Variable Cylinder Management System
A six-cylinder V6 engine using this system fires on all six cylinders when high output is needed,
such as when starting to move or accelerating. When cruising or at other times when less power
is required, the engine uses only the three cylinders on one side, improving fuel efficiency.