Striving to be a company society

wants to exist
C S R Report
2007
 Publication Policy

Striving to be a company society wants to exist

Striving to be a company society wants to exist, Honda is engaged in various initiatives to meet the
expectations of all its stakeholders and enhance the joy of the buyer, seller and creator, creating new
value, expanding value through glocalization and realizing our commitment to the future.
With reference to the Sustainability Reporting Guidelines of the Global Reporting Initiative*, this report
contains chapters on Honda initiatives with respect to quality and safety, the environment, our stake-
holders and the community.
To highlight Honda’s corporate social responsibility (CSR) initiatives in the context of its daily opera-
tions, we have also included a “Highlights FY2007—The Honda Challenge” section containing articles
entitled “Innovation in Production: Strengthening the Fundamentals” and “Our Vision of Environmental
Technology.” This section focuses on the development of the company’s operations, as well as concomi-
tant issues of concern to Honda. It also includes comments by stakeholders inside and outside the
company.
It is our hope that this report will lead to a greater appreciation of Honda’s CSR initiatives among all
stakeholders.
* The Global Reporting Initiative is a joint project of the Coalition for Environmentally Responsible Economies, a US NPO, and the United Nations Environment Programme. Initiated
in 1997, it issues guidelines for reporting on economic, environmental and social performance by organizations.

Relation to other reports

In order to meet the informational needs of various stakeholders, Honda publishes a range of reports. For more
information pertaining to business results, environmental conservation, driving safety promotion and philanthropic
initiatives, readers are invited to refer to the reports below and the company website.

CSR

CSR Report 2007

An outline of Honda’s CSR policy and initiatives, focusing on operations,
environmental conservation, philanthropy, and quality and safety initiatives in FY2007
http://world.honda.com/CSR/

Safety Philanthropy

Driving Safety Promotion Report 2006 Honda Philanthropy 2007

An outline of Honda’s approach and major initiatives An outline of Honda’s fundamental approach and major
with respect to the promotion of driving safety in 2006 initiatives in the area of philanthropy in FY2007
(Available only in Japanese.) http://world.honda.com/community/

CSR

Operations Environmental

Annual Report 2007 Honda Environmental Annual Report 2007

An outline of business results, management strategy An outline of Honda’s fundamental approach to
and other aspects of Honda’s operations environmental policy, including reports on targets and
in FY2007, plus a look at plans for future initiatives the results of major initiatives in FY2007
http://world.honda.com/investors/annualreport/ http://world.honda.com/environment/reports/

1 CSR Report 2007

 Contents
3 Message from
the President & CEO 3

7 Corporate Outline 7

9 Corporate Governance 9

FY2007 Highlights
13 Striving to be a company society wants to exist

The Honda Challenge

Part
Innovation in Production: Strengthening the
Fundamentals 15
1. Advances in automobile production
2. A new inspiration in automatic transmission production
3. A new concept in motorcycle production

Part
Our Vision of Environmental Technology 21
1. Potential of the next-generation diesel engine
Striving to be a company 2. Advanced motorcycle environmental technology
society wants to exist 3. Powered by Honda: energy conservation in the home

CSR Report 27 Chapter

2007 Looking After Quality and Safety

Insisting on Quality 28
Looking After Safety—
Safety Technologies and Driving Safety 30

37 Chapter
Looking After the Environment
The Honda Environment Statement 38
Assessing Environmental Impact of Corporate Activities,
Policy Initiatives 39
Environmental Management 40
2010 Global CO2 Emissions Reductions
Targets and FY2007 Results 41
FY2011 Targets for Japan 42
Mid-Term and Annual Targets and Results 43
Major Initiatives in FY2007 45

47 Chapter
Looking After Our Stakeholders
Our Customers 48
Our Suppliers 53
Our Associates 55
Our Shareholders and Investors 62

65 Chapter
Looking After Communities
The Purpose of Honda Philanthropy 66
FY2007 Honda Philanthropy: Highlights 67

CSR Report 2007 2

3 CSR Report 2007
Message from the President & CEO

Taking on the challenges facing society today to ensure that

future generations can also enjoy mobility

Brought up on dreams can be.

Honda’s history began in 1948, the year the A-type On the foundation of this philosophy, a corporate
auxiliary engine for bicycles was born. The Super culture of independence and open-mindedness
Cub motorcycle series, released in 1958, is a has emerged at Honda. It’s what leads us to follow
customer favorite in 160 countries today. In 1972 our dreams, constantly take on new challenges,
Honda became the first automaker to comply with create innovative new technologies and products,
the stringent requirements of the US Clean Air Act and engage in new initiatives.
by developing the low-emissions CVCC engine. In
2000 we introduced the world to a new humanoid Striving to be a company society wants
robot, ASIMO. We’ve always been driven by our to exist
dreams to create the unexpected, astounding and As times change, societies evolve and people seek
delighting people around the globe. new kinds of value. A corporation’s understanding
Today we’re moving into another dimension of of its social responsibilities must likewise evolve.
mobility with the HondaJet. We’re also pursuing Even if a company creates superior technologies
the ultimate in environmentally responsible and products, if it does not act fairly and in due
automobiles with the new FCX Concept fuel cell consideration of the interests of all stakeholders,
vehicle and developing a next-generation diesel it cannot hope to earn society’s trust. New social
engine with emissions on par with those of a imperatives must be recognized and appropriate
gasoline engine. Our dreams keep turning into action taken.
valuable new technologies and products. In 1998 Honda defined its Vision 2010: striving
to be a company society wants to exist. This
The foundation: Honda philosophy means making all our stakeholders worldwide
The basic principles of Honda philosophy were glad that Honda is there. To this end, we redefined
defined by our founder: respect for the individual, the Three Joys as creating new value, expanding
and the Three Joys of buying, selling and creating. value through glocalization and realizing our
These form the basis of all our dreams. commitment to the future. Honda is working
We believe in the dignity of each human being. to achieve these three objectives and meet the
We believe individuals must respect each other demands of all stakeholders.
as independent human beings with distinct
personalities. And we believe in building trust so Creating trust and affinity by getting the
that each person’s full potential can be realized and basics right
we can all share true happiness. Everyone involved We must fulfill two basic responsibilities if we are to
in Honda’s operations seeks to share joy with all realize these objectives.
those who come in contact with us through our First, we must continue to provide products and
products and services. Our wish is to help create services of the highest level of quality and safety,
societies where people help each other be all they revisiting the fundamentals to ensure that we are

CSR Report 2007 4

 Message from the President & CEO

certain of the appropriateness of our actions in all Strengthening production

aspects of our operations. For the last decade, Honda has been able to meet
Second, as a corporation operating globally, growing demand in world auto markets and
we must make sure that each process through achieve steady growth. And as our product lineup
which we deliver products and services to our evolves and we take steps to meet accelerating
customersevery aspect of our corporate demand worldwide, it is vital that we strengthen
activitiesis worthy of the trust of all our our advanced manufacturing systems in Japan,
stakeholders. In addition to ensuring proper extending our global production capacity from this
corporate governance and compliance with laws foundation.
and regulations, we take responsibility for protecting Honda has announced it will build a new
the environment, ensuring diversity in employment, automobile plant in Yorii, Saitama Prefecture,
fostering our associates’ development and ensuring and an automobile engine plant in neighboring
fairness in our dealings with other firms. Ogawa. We are also strengthening the automatic
With this mind, in FY2007 we focused on transmission production capacity of Hamamatsu
strengthening the fundamentals of production and Factory and concentrating motorcycle
our approach to protecting the global environment. manufacturing at Kumamoto Factory, among

Vision 2010

Striving to be a company society wants to exist

Value Creation Glocalization Commitment to the Future

Honda CSR Objectives,

Honda Stakeholders
Shareholders
Local Communities
and Investors Corporate
Dealers Citizenship Suppliers

Operations
Customers Associates
Quality and
Environment
Safety

Honda Philosophy

Respect for the The Three Joys

Individual

5 CSR Report 2007

other measures to enhance efficiency. Naturally, Commemorating the 100th anniversary
we are implementing state-of-the-art production of the birth of Soichiro Honda
technology. We are also committed to making In 2006 we celebrated the 100th anniversary of the
sure these facilities achieve the highest levels of birth of our founder, Soichiro Honda. We presented
product quality, environmental responsibility and an exhibition of classic products from Honda’s
people-friendliness. We’ll work hard to ensure history at the Welcome
that our facilities are truly welcomed by their host Plaza showroom at our
communities. More than ever, Honda factories will Tokyo headquarters.
feature not only advanced technology, but also a The event focused
high level of social responsibility. on our origins and
the many sources of
Leading environmental technology inspiration that we wish to pass on to the next
Manufacturers of mobility products have an generation.
obligation to help conserve the global environment. Today, with corporate values so much in
Striving to lead the way in the application of question and incidents of misconduct frequently
environmental technology, in FY2007 Honda being revealed, the spirit of our founder guides
set specific targets in the area of environmental each of us in the worldwide Honda Group to make
conservation. We’re engaged in a broad range of decisions and take actions truly worthy of Honda.
initiatives to attain these targets. This is particularly germane at a time of intense
For example, we’ve announced plans to struggle for survival in an increasingly competitive
introduce a new dedicated hybrid vehicle by 2009. global auto industry.
Striving to further improve fuel efficiency, we’re
also pursuing development of a next-generation Sustainability
diesel engine and an even more advanced version The Honda CSR Report 2007 is an overview of our
of our VTEC engine. We became the first Japanese corporate social responsibility initiatives over the
carmaker to introduce a vehicle in Brazil that runs last year. There is much work to be done and many
on bioethanol. And in 2008 we’re planning to issues to be faced.
introduce a new fuel cell vehicle based on the FCX Going forward, Honda will seek to engage
Concept in Japan and the US. customers, suppliers, associates, shareholders,
In addition to creating new technologies, we’re investors, residents of the communities that host
also taking on the challenge of developing new our operations and other stakeholders in ongoing
forms of energy. For instance, we’re beginning communications that will help us enhance our
commercial production of our own solar panels and activities and attain true sustainability.
researching the production of ethanol from non- We warmly welcome readers of this report to
edible plant material such as rice straw. share their views with us.

President & CEO

CSR Report 2007 6

 Corporate Outline

Realizing dreams in a broad range of business activities,

Profile Honda will continue to strive to be a company society
wants to exist, fulfilling its commitments to stakeholders
Operating in accordance with the basic principles of and sharing joy with people worldwide.
respect for the individual and the Three Joys since
its foundation in 1948 Honda has been meeting and Company Name: Honda Motor Co., Ltd.
anticipating the needs of societies and helping people Head Office: 2-1-1 Minami Aoyama, Minato-ku,
realize their dreams, primarily through the production and Tokyo 107-8556, Japan
sales of motorcycles, automobiles and power products. Tel: +81-(0)3-3423-1111
In addition to its focus on innovatively creating Established: September 24, 1948
value in the form of new products and technologies, President & CEO: Takeo Fukui
Honda is engaged in a broad range of initiatives that Capital: JPY 86 billion (as of March 31, 2007)
support sustainable development in our mobile society,
particularly through enhanced quality and safety, and
better environmental conservation.
Today, Honda is the world’s leading manufacturer
of motorcycles and power products, and has grown to
become a global leader in automobile manufacturing.
Guided by The Power of Dreams, Honda creates a wide
range of products and technologies, including compact
engines, scooters, sport cars and humanoid robots, as
well as compact business jets and new forms of energy.

Automobiles Motorcycles
• Passenger Vehicles • Scooters
• Commercial Vehicles • Sports Motorcycles
• Special Needs Vehicles • Commuter Motorcycles
• Utility Vehicles • ATVs
• Personal Watercraft

Sales by product segment

(thousand units)

12,000
10,482 10,271 10,369
9,206
9,000
8,080

6,421
6,000 5,876
5,300
Power Products 4,584
5,047
3,652
2,983 3,242 3,391
3,000 2,888
• Power Product Engines
• Tillers
• Marine Outboards FY2003 FY2004 FY2005 FY2006 FY2007

• Generators Motorcycles* Automobiles Power Products

• Lawnmowers
* Does not include production/sales of Honda-brand motorcycles overseas by equity-method
affiliates with respect to which no parts manufactured by Honda or its affiliates have been
supplied.

7 CSR Report 2007

 our local management and sales operations. At the same
Global Operations time, to ensure optimal, integrated and forward-looking
planning for each region, certain functions related to
At 134 production facilities in 28 countries and at 31 motorcycle, automobile and power product production,
research and development facilities in 15 countries, about as well as customer service, purchasing, administration
167,000 Honda associates help some 23 million customers and other areas, are overseen worldwide.
each year. Our global operations have grown because The Honda Group, which comprises 507 companies
Honda delivers genuine satisfaction and has a policy of worldwide*, operates in accordance with shared conduct
manufacturing products close to the customer. guidelines. These help member companies and their
In accordance with this policy, Honda’s global associates appropriately evaluate and manage risk,
operations are divided into six administrative regions comply with laws and regulations, maintain a high level
responsible for local operations. Hiring associates and of transparency in business operations, and work as one
procuring parts and materials locally, and engaging in to maximize customer trust and the value of the Honda
philanthropic initiatives in the communities that host brand.
* As of March 31, 2007
our operations, we have promoted the independence of

Production Facilities
Research & Development Facilities
Sales & Other Facilities

Financial information (consolidated)

March 31, 2003 March 31, 2004 March 31, 2005 March 31, 2006 March 31, 2007

Net sales 7,971,499 8,162,600 8,650,105 9,907,996 11,087,140

Sales and income Income

609,755 641,927 656,805 814,617 792,868
(millions of yen) before taxes

Net income 426,662 464,338 486,197 597,033 592,322

Research & development expenditure

436,863 448,967 467,754 510,385 551,847
(millions of yen)

Capital expenditures (millions of yen) 316,991 287,741 373,980 457,841 597,958

Japan 1,748,706 1,628,493 1,699,205 1,694,044 1,681,190

Sales by region
Overseas 6,222,793 6,534,107 6,950,900 8,213,952 9,405,950
(millions of yen)

Total 7,971,499 8,162,600 8,650,105 9,907,996 11,087,140

Number of employees 126,900 131,600 137,827 144,785 167,231

CSR Report 2007 8

 Corporate Governance

System. To help its Board of Directors respond quickly to

Corporate Governance: Basic Stance changing business environments, as well as to improve
the flexibility of its decision-making process, Honda limits
Honda considers corporate governance one of the most directors’ assignments to one year and determines their
important management issues. We’re strengthening it compensation in accordance with business results.
on the basis of our fundamental corporate philosophy, Based on its fundamental corporate philosophy, Honda
aiming to have the global community—including our has refined its organizational structure. A general manager
customers, shareholders and investors—place even from the Board of Directors or an Operating Officer is
greater trust in us as we strive to be a company society now assigned to each administrative region, business
wants to exist. and functional division. The Executive Council deals with
To ensure objective oversight of management, Honda important global issues, and regional operating councils
appoints outside directors to its Board of Directors and deal with important regional management issues. Honda
outside auditors to its Board of Auditors. To strengthen its has developed a highly effective and efficient business
business execution system in each region and workplace, execution system to respond to the needs of customers
as well as enhance the supervisory function of the Board and societies with swift, optimal decision-making.
of Directors, Honda has introduced an Operating Officer In the area of internal controls, each division is engaged

Corporate Governance: Organization

Board of Auditors: Six Auditors Board of Directors: 20 Members
(Outside Auditors: Three Auditors) (Outside Directors: Two)

Business Ethics Committee: Five Officers Executive Council

President & CEO
Compliance Risk Management
Business Ethics Improvement Proposal Line Officer Officer Nine Directors

Driving Safety Promotion Center Regional Sales Regional Regional Regional Operations Regional Regional
Operations Operations (North/ Operations (Europe/Middle Operations Operations
Corporate Planning Division (Japan) Central America) (South America) East/Africa) (Asia/Oceania) (China)
Corporate Communications
Division Regional Regional Regional Regional Regional Regional
New Business Development and Operating Board Operating Board Operating Board Operating Board Operating Board Operating Board
Planning Office
Aero Engine Business Planning Office

Aircraft Operation Office

Quality Innovation Center

Certification & Regulation
Compliance Division
IT Division

Motorcycle Operations
Automobile Operations
Power Product Operations
Customer Service Operations
Production Operations Japan Factories
Purchasing Operations
Business Support Operations
Business Management Operations
Corporate Projects

Quality Audit & Compliance Division

Audit Office: 28 Associates

Corporate Auditors’ Office: Two Associates

Honda R&D Co., Ltd.

Honda Engineering Co., Ltd. (As of June 22, 2007)

9 CSR Report 2007

in strengthening compliance and risk management 407 of the US Sarbanes-Oxley Act of 2002. Mr. Sakamoto
measures. Thorough audits are conducted by the Audit also qualifies under Section 121, Article 8 of Japan’s
Office to monitor execution. Company Law as a person of advanced knowledge of
We issue quarterly reports on financial results and finance and accounting.
management policy to enhance the trust and respect In FY2007 meetings between Honda’s corporate
we earn from shareholders and society. Through these auditors and its independent auditor were held on five
and other measures, we will continue to maintain full occasions. At those meetings, the independent auditor
disclosure and transparency. provided the corporate auditors with explanations and
reports on accounting audit plans and results. A frank
exchange of views took place.
Corporate Governance: Policy With respect to audit policies and schedules, the
corporate auditors closely coordinate their activities with
Management Structure the Audit Office, which is responsible for internal audits.
• Board of Directors In FY2007 corporate auditors and the Audit Office, either
The Board of Directors has 20 members, two of whom independently or in collaboration, conducted business
are external appointees. It supervises the execution of audits of a total of 130 companies from among Honda’s
Honda’s business affairs and makes decisions on matters subsidiaries and affiliates in Japan and elsewhere.
of importance to the company, including legal issues. The
board met eight times in FY2007. • Decisions Regarding Director Candidates
Candidates for director are nominated and appointed by
• Board of Corporate Auditors the Board of Directors. Candidates for corporate auditor
The Board of Corporate Auditors consists of six corporate are nominated and appointed by resolution of the
auditors, three of whom are external appointees. Each Board of Directors, subject to agreement of the Board of
corporate auditor audits the directors’ execution of duties Corporate Auditors.
in accordance with Honda auditing standards, auditing
policies, and apportionment of responsibilities and • Director Remuneration
decisions of the Board of Corporate Auditors. Corporate The total amount of remuneration and bonuses
auditors conduct these audits through various means, of directors and corporate auditors is determined
such as attending meetings of the Board of Directors according to criteria that reflect company performance.
and reviewing the status of the company’s assets and Remuneration for directors and corporate auditors is
liabilities. In addition, a Corporate Auditors’ Office has based on criteria approved by the Board of Directors,
been established to provide direct support to the Board of and is paid within the extent of the maximum amount
Corporate Auditors. set by resolution of the Ordinary General Meeting of
Honda has established standards to ensure timely Shareholders. Bonuses for directors and corporate auditors
and precise reporting to auditors. In accordance with are based on decisions of the Ordinary General Meeting of
these standards, reports are filed from time to time on Shareholders, taking into consideration company profits
the structure and implementation of internal controls at during the fiscal year, past bonuses and other factors.
Honda and its subsidiaries, and in any situation where
the company’s actions may significantly impact society. • Accounting Audits
Auditors are invited to attend meetings of the Executive To ensure proper auditing of the company’s accounts, the
Council and other important meetings. In FY2007 the Board of Corporate Auditors and the Board of Directors
Board of Corporate Auditors met 13 times. receive auditing reports based on Japan’s Company Law
The Board of Corporate Auditors has certified Shinichi and Securities and Exchange Law, as well the US Securities
Sakamoto, a Honda corporate auditor, as an audit Exchange Act. In addition, they supervise the election of
committee financial expert, as defined in the rules of the independent auditors, their remuneration and non-audit
Securities and Exchange Commission, pursuant to Section services.

CSR Report 2007 10

 Corporate Governance

In FY2007 Honda appointed Azsa & Co. as its functional operations, with the aim of increasing Honda’s
independent auditor for the purposes of Japan’s Company operational efficiency.
Law and Securities and Exchange Law, as well as the US Research and development activities are conducted
Securities Exchange Act. principally at Honda’s independent subsidiaries. Honda
R&D Co., Ltd. is responsible for product research and
Business Execution System development, while Honda Engineering Co., Ltd. handles
• Organization research and development in the area of production
Honda has six administrative regions around the world to technology. The Honda Group proactively conducts
execute and develop business based on its fundamental research and development in advanced technologies
corporate philosophy. These regional administrations with the aim of creating products that are distinctive and
adopt long-term perspectives and maintain close ties with internationally competitive.
local communities.
Honda’s four business divisions—motorcycles, • Business Execution Officer System
automobiles, power products and components— Honda assigns a general manager from the Board
formulate medium- and long-term business plans. Each of Directors or an Operating Officer to each regional
division aims to maximize its performance on a global administrative, business and functional division, as well as
basis. Each functional operation, including Customer to each research and development subsidiary. By ensuring
Service Operations, Production Operations, Purchasing swift, optimal decision-making in each region and
Operations, Business Management Operations and workplace, Honda maintains a highly efficient business
Business Support Operations, supports the other execution system.

Founding Spirit
Column
The Big Boardroom: Honda’s corporate culture and decision-making

There is no president’s office at Honda, and no separate offices for affirming opinions.
directors. There is simply a Directors’ Room—a big room with desks The Big Boardroom system also provides a form of internal
for each of the representative directors, plus large tables around management auditing, encouraging open, expeditious decision-
which directors gather to discuss management issues, sometimes making in everyday matters and emergencies alike. Introduced
inviting associates to join them. The Big Boardroom concept was as a creative way to run a company, the Big Boardroom is also
introduced in 1964 by one of the men who created Honda: Vice highly appropriate, given contemporary imperatives of corporate
President Takeo Fujisawa. Mr. Fujisawa believed that to create new governance and risk management.
value the company needed more than what individuals working in The open-mindedness and vitality of Honda’s corporate culture have
isolation could provide. Honda needed to create an environment in their origins in traditions like the Big Boardroom, and are reaffirmed
which its leaders could freely exchange ideas, synergistically forming every time associates bounce ideas off each other in Y-gaya
a powerful leadership team. By working face to face every day, the (brainstorming) sessions. This spirit of egalitarianism keeps Honda
directors formed stronger bonds of trust, sharing information and strong, fueling innovation for the future.

The Directors’ Room in the era of Honda’s second President, Kiyoshi Kawashima The Directors’ Room today

11 CSR Report 2007

• Executive Council division has a checklist that clarifies specific laws and risks
Honda has established an Executive Council, which to consider related to its particular business, and conducts
consists of nine representative directors, including the regular self-assessments. The results of such assessments
president and vice presidents. Along with discussing are reported to the director in charge of each division, and
in advance the agendas of meetings of the Board of the overall status of compliance and risk management is
Directors, the Executive Council discusses important evaluated regularly by the Executive Council.
management issues within the scope of authority
conferred upon it by the Board of Directors. The Executive • Compliance System
Council met 27 times in FY2007. Honda has appointed a compliance officer to act as
a director in charge of compliance-related initiatives.
• Regional Operating Councils Other key elements of our compliance system include
To enhance the independence of each administrative the Business Ethics Committee and the Business Ethics
region and ensure swift decision-making, regional Improvement Proposal Line.
operating councils have been established in each
administrative region to discuss important regional • Business Ethics Committee
management issues within the scope of authority Honda’s Business Ethics Committee is chaired by the
conferred upon them by the Executive Council. compliance officer and consists of directors and corporate
officers. The committee deliberates on matters related
Internal Controls Systems: to corporate ethics and compliance. The Business Ethics
Fundamental Approach and Current Committee met twice in FY2007.
Status
To earn the trust of customers and society, Honda’s • Business Ethics Improvement Proposal Line
divisions have implemented frameworks to ensure a Honda places high priority on open communications. It
systematic approach to compliance and risk management set up the Business Ethics Improvement Proposal Line
in accordance with policies determined by the Board of to receive suggestions related to corporate ethics. By
Directors regarding internal controls systems, and under providing appropriate responses to suggestions, Honda
the guidance of their respective directors-in-charge. These is constantly working to enhance corporate ethics.
include the formulation of performance guidelines and The system is designed to ensure the protection of
procedures for self-assessment. Honda also has a system to those providing information, allowing them to remain
support the initiatives of each division. Effective audits are anonymous. The Business Ethics Committee supervises
carried out to monitor the execution status of each division. the operation of the Business Ethics Improvement
Proposal Line and submits status reports to the Board of
• Conduct Guidelines Corporate Auditors.
Honda Conduct Guidelines have been created to guide
the actions of all associates. In addition, each division • Risk Management System
produces more detailed performance guidelines Each division works to address and mitigate its particular
according to its specific attributes. set of risks. In addition, Honda has Crisis Response Rules,
Web
Honda Conduct Guidelines are available at which are designed to address company-wide crises
http://world.honda.com/conductguideline/
such as natural disasters. Honda has appointed a risk
management officer, who is a director in charge of risk
• Self-Assessment Checklist management-related initiatives. It has also established the
Each division approaches compliance and risk Company-Wide Response Headquarters to address crisis
management in a systematic way. For example, each situations.

CSR Report 2007 12

 Striving to be a company society wants to exist

FY2007
The Honda
Highlights
Challenge
The demand for mobility is growing—not only in North America and Europe,
but in South America, Asia and the rest of the world as well. It appears certain that
the transportation market will continue to expand. Meanwhile, automakers
must deal decisively with global warming and other environmental problems.
To achieve sustained growth, they must also continue to enhance the safety and
quality of their products. Confronting these challenges, Honda is strengthening
(1) its advanced manufacturing systems in Japan; (2) its foundation for long-term
global growth; and (3) its initiatives to reduce the environmental impact of its
operations. Strengthening our fundamentals, we’re pursuing new innovations in
production and environmentally responsible technologies.

13 CSR Report 2007

 Innovation in Production:
Part
Strengthening the Fundamentals
To meet the growing demand for mobility, we’re pursuing
innovations in production technology. We’re meeting the
needs of society and the expectations of our customers,
and realizing the dreams of our stakeholders.

1. Advances in automobile production

—the Yorii-Ogawa Project

2. A new inspiration in automatic transmission production

—Hamamatsu Factory initiatives

3. A new concept in motorcycle production

—Kumamoto Factory initiatives

Our Vision of Environmental

Part
Technology
Implementing a range of environmental technologies,
we’re delivering on our promise of genuine value in
mobility—driving pleasure and environmental responsibility.

1. Potential of the next-generation diesel engine

—combatting global warming and using energy resources efficiently

2. Advanced motorcycle environmental technology

—implementing fuel injection technology throughout the product lineup

3. Powered by Honda: energy conservation in the home

—the potential of a new cogeneration system

TOPICS
• Cooperative research in making ethanol from cellulosic biomass
• A next-generation fuel cell vehicle in 2008 for Japan and the US

CSR Report 2007 14

 Leveraging the advanced technologies of Environmentally responsible, people-friendly plants
new manufacturing systems Honda‘s concept of leadership in manufacturing is not
to strengthen the leadership function limited to promoting high quality and high efficiency.
The leadership provided by Honda manufacturing facilities Fulfilling a broad range of corporate social responsibili-
in Japan is key to the company‘s ongoing innovation in ties, Honda strives to achieve environmentally
production technology. By internationalizing our opera- responsible manufacturing. It also strives to
tions and manufacturing products where the demand is, ensure that its facilities comply with the
Honda has expanded its development and production highest safety standards and are
operations throughout the world. Honda relies on the truly people-friendly,
leadership of its Japan operations to transfer advanced thereby meeting the Hamamatsu
production technologies throughout our global opera- needs of the communities
Kumamoto
tions, thereby strengthening our production capacity where we live and work, Saitama

throughout the world. as well as the expecta-

To meet accelerating regional demand and prepare for tions of stakeholders. We have set voluntary targets to
the future, we’re strengthening and expanding our reduce the environmental impact of our operations (see
production capacity at a faster pace. We’re planning a page 41), including CO2 emissions. We’re implementing
major increase in sales volume by 2010.* To manage rapid strategies at all of our factories to combat global warming
growth efficiently, Honda will further strengthen the and conserve resources.
leadership function of its Japan-based operations, taking We want everyone to realize their potential. That’s why
its production technologies to the next level and develop- we’re modifying our assembly lines and personnel policies
ing next-generation manufacturing systems that can also to allow associates to strike a better balance between work
be implemented in other countries. and private life, while also striving to create safer and more
In 2006 Honda announced a plan to strengthen the comfortable workplaces that are welcoming to women
foundation of its production operations in Japan by and older workers. We’re always seeking to contribute to
building new plants in Yorii and Ogawa in Saitama our host communities by creating new employment and
Prefecture. The new plants will be capable of synchronous working closely with local authorities to invigorate
production—from engine to automobile. Honda also commerce. We also think it’s important to enhance local
announced in 2006 that the leadership roles of Hama- environments. One way of doing that is by promoting
matsu Factory in automatic transmissions and Kumamoto traffic safety, which we are striving to do through a variety
Factory in motorcycle production will be further strength- of initiatives.
ened. * We plan to expand annual sales of motorcycles to more than 18 million units,
automobiles to more than 4.5 million units, and power products to more than 7 million
units (As announced by President Fukui in May 2006).

Innovation in Production:
Strengthening the Fundamentals
FY2007 Highlights
To meet the growing demand for mobility,
Striving to be a company society
wants to exist
we’re pursuing innovations in production technology.
The Honda We’re meeting the needs of society and the
Challenge expectations of our customers, and realizing
Part the dreams of our stakeholders.

15 CSR Report 2007

 Innovation in Production: Strengthening the Fundamentals (1)

Advances in automobile production

——the Yorii-Ogawa Project

Building the future of global Honda production

The construction of a new auto plant in Yorii, Saitama
Prefecture—scheduled to begin production in 2010—is a key
element of the Yorii-Ogawa Project*, and Honda’s drive for
innovation in production. A second key element is a new
engine plant scheduled to begin production in nearby Ogawa
in summer 2009 to help meet the growing worldwide demand for
fuel-efficient engines. Destined to form a new foundation for the global
evolution of Honda production technology and expertise, the Yorii-Ogawa Ogawa engine factory on completion (artist’s rendering)
Project is a vital initiative driven by three main concepts.
First, the new facilities will be designed on the basis of our Green Factory
initiative’s energy-and-materials recycling principles and practices. They will achieve Stakeholder’s Perspective

world-leading levels of efficiency in the use of energy and other resources, and aim Production in harmony
for per-unit CO2 emissions 20% lower than 2000 levels. Second, the new facilities with the environment
will incorporate high-quality, high-efficiency production and logistical systems that Honda’s decision to
build a new plant in
will allow them to respond quickly to rapidly changing demand. Thanks to the Yorii is greatly
introduction of Honda’s own agile manufacturing systems, the plants will achieve welcomed by people
in and around the
levels of quality that will astound and delight customers worldwide. Third, the new town, not only
facilities are designed to foster the individuality and craftsmanship of each because it will boost
employment, but also Morikazu Kato
associate. They’ll become models for developing new production technology because it will add Industrial Development
Council Chief
new vitality to local Yorii Town
worldwide, as well as workplaces that will be a source of pride for associates,
commerce, reinforce the tax base and
customers and the local community. Our goal is to create new facilities where strengthen the regional economy. Yorii is
associates will truly enjoy their work—and where customers will want their cars to blessed with beautiful natural
surroundings. In particular, our water was
be built. ranked by Japan’s Ministry of the
These three concepts represent Honda’s manufacturing ideal. Advancing Environment as among the 100 best in the
country. We’re looking forward to joining
step by step, we’re turning dreams into reality. hands with Honda to harmonize advanced
* Output for the Yorii Factory is scheduled to be 200,000 units per year in 2010, bringing production capacity in Japan to industry with our rich natural environment
approximately 1.5 million units. and realize truly sustainable development.

Honda global automobile production capacity

(million units) 3.633
3.5 3.181 3.409

3.0 2.899 2.968

2.5

2.0

1.5

1.0

0.5

2002 2003 2004 2005 2006 (year) Nobuhiko Shiozaki

Japan North America Europe Asia/Oceania Other areas
Senior Project Leader
Yorii-Ogawa Project
* Calculations for North America include Mexico. Calculations for Japan are based
on reports to the Japan Automobile Manufacturers Association. Calculations for
other countries are based on assembly output.

CSR Report 2007 16

 People-friendly factories—where everyone can enjoy working
Stakeholder’s Perspective Honda is dedicated to putting its basic principle of respect for the individual into
Changing expectations in practice in the people-friendly Yorii-Ogawa Project. By “people,” we mean
an evolving company associates, of course, but also suppliers and residents of the local community—
In April 2007 a working group called
“Women Thinking about the Ideal Plant for
everyone who comes in contact with the Yorii and Ogawa plants.
Women” was formed at Saitama Factory. Although car manufacturing is traditionally a male-oriented industry, with
The group is composed of 10 women
working at the factory’s various plants. We
declining birth rates and with women comprising an increasing percentage of the
discuss issues like marriage, maternity and working population, Honda’s workforce now includes more women and older
child-rearing, and how to balance them
people. As Japan’s population is projected to decline in the near future, Honda’s
with our work. We also talk about ways
assembly line equipment might be made competitive strength will depend on its ability to create work environments where
easier for women to use, as well as how everyone—regardless of age or gender, and including individuals with
personnel policies could be improved and
awareness of women’s issues raised. My disabilities—can realize their full
boss has urged us not potential.
to hesitate to make
whatever proposals In collaboration with Saitama
we see fit. I appreciate Factory, the Yorii-Ogawa Project
the fact that Honda is
striving to make established a committee composed
improvements of women working at Saitama
wherever possible, Megumi Ono
and I will continue to Assembly Plant, Factory. They were asked to think
bring forward specific Saitama Factory about how to make our factories
Women Thinking about
proposals for the Ideal Plant for Women
improvement. Working Group
better workplaces for women. The
group is considering various issues To reduce the physical strain on associates and enhance quality,
production processes and procedures are reconsidered from an
faced by women in the workplace, ergonomic perspective

Encouraging women and working to come up with solutions. With a view to improving the production
in manufacturing process, a pilot assembly line staffed mainly by women was created.
I prefer physical labor to working at a desk,
which is why I asked to be assigned to the
The experiment, which was designed to explore ideal working arrangements,
assembly line when I joined the company. analyzed physical burdens and ergonomics. Among the improvements: the
Currently, I work on the instrument panel
heights of work surfaces were adjusted and mechanical devices were introduced
unit assembly line. Until recently, I was
usually the only woman on my line, but to help workers move heavy objects more easily.
we’ve started a pilot project assembly line Of course, there’s more to it than equipment. We’re also
with other female associates. This gives us
a chance to exchange ideas about our making every effort to maximize the motivation of each
work. The feeling in associate, striving to create an environment in which
the group is really
positive. I’m hoping everyone is encouraged to take initiative and fulfill his or
that in future Honda her ambitions. We’re also engaged with local residents,
will introduce flexible
working working to make sure that Honda factories are truly
arrangements, and I’m welcomed by everyone.
looking forward to Chika Ogasawara
enjoying a long career Assembly Plant, Tsuyoshi Saito
Saitama Factory Administration Division
here.
Yorii-Ogawa Project

17 CSR Report 2007

 Innovation in Production: Strengthening the Fundamentals (2)

A new inspiration in automatic transmission

production
——Hamamatsu Factory initiatives
Meeting the growing global demand for
automatic transmissions
The history of Honda motorcycle
manufacturing began in 1949 with the start
of production of the Dream D motorcycle
in Hamamatsu. Ever since, Honda has
continued to make innovative
products in Hamamatsu and
elsewhere, expanding from
motorcycles to automobiles, and from
Japan to the world, with a rapidly
diversifying lineup of products. Today, mid-size
and larger motorcycles, automobile transmissions, Hamamatsu Factory
4-stroke marine outboards and other Honda products are built in
Hamamatsu.
Automatic transmissions are a core product. Some 20-25% of the automatic Environmental Conservation
transmissions for Honda automobiles, and about 60% of the gears that are a key
Environmentally responsible
component of automatic transmissions, are made here. As the automobile market
manufacturing
expands, demand for automatic transmissions expands as well.
One of the principal objectives of the Pioneer
To meet demand, Honda has established a new factory in Georgia, US, and Automatic Transmission Project at
strengthened and expanded its production capacity in China. At the same time, Hamamatsu Factory is to strengthen
environmental conservation. As part of the
Hamamatsu Factory has been assigned the responsibility of leading the way in program to attain the target of a 15.3%
reduction in CO2 emissions by 2010 (baseline:
introducing innovations and strengthening Honda’s automatic transmission FY1991), the factory’s equipment is being
manufacturing systems as part of the Pioneer Automatic Transmission Project. upgraded and other measures are being
taken to improve energy efficiency. In
Hamamatsu Factory’s mission is to help extend the foundation of expertise and accordance with the odor-related emissions
technical skill to Honda’s facilities worldwide. regulations introduced by the city of
Hamamatsu in 2002, ozone-deodorizing
equipment is being installed in the foundry as
Cultivating engineering talent to foster innovation one of many environmental conservation
measures.
in automatic transmissions
To strengthen the development of automobile production engineering
worldwide, Honda currently has some 160 engineers from Hamamatsu Factory
working on assignment in North America, China, Indonesia and elsewhere. Also,
Hamamatsu Factory welcomes trainee engineers from facilities all over the world.
The training of young engineers requires considerable experience, knowledge
and expertise, as well as a long-term commitment.
A key long-term objective of the project is to provide young engineers with the
expertise to optimize production lines, upgrade production equipment and
Hideaki Masuda
handle other key tasks that call for a high level Pioneer Automatic Transmission Project
of technical skill. To cultivate their talents, plans Hamamatsu Factory
are in place to institute hands-on education
programs within factories to ensure that
training is practical and focused on the actual
places where engineers work, the actual
objects they work with and the actual issues
they face.
Automatic transmission production training

CSR Report 2007 18

 Innovation in Production: Strengthening the Fundamentals (3)

A new concept in motorcycle production

——Kumamoto Factory initiatives

Cultivating Talent
Fulfilling the responsibilities of a leading global manufacturer
Honda got its start building motorcycles. Today we’re the world’s leading
Transferring technical ability: motorcycle manufacturer. Offering everything from small-displacement bikes
cell assembly used for everyday transportation to high-displacement, high-performance sports
Typically, motorcycle assembly is configured bikes, we’re meeting the need for mobility and enriching the lives of people
around conveyor belts that carry the bikes
from worker to worker on an assembly line. throughout the world.
But for some products, Honda has introduced Demand is growing globally—in North America and other developed
a cell assembly approach in which three or
four people work together to assemble a bike. economies, but also at a particularly rapid pace in the developing economies of
This flexible approach, which is well suited to India, China and the rest of Asia, as well as in Brazil, Argentina and elsewhere in
small-lot production of a variety of models,
can also help enhance quality. Working
South America. With 33 facilities in 22 countries, as well as research and
closely with younger associates to put development facilities in Japan, North America, Europe, Asia and other regions,
together a bike, assembly experts are able to
share their knowledge and experience. In
Honda is meeting local needs by developing and manufacturing products
future, Honda plans to further leverage the appropriate to each region. To respond to growth in global demand, Honda must
advantages of cell assembly.
fulfill its responsibilities as a leading manufacturer to produce and deliver the
products society needs. To do so, we must take our quality and production
capacity to the next level. And in focusing on the needs of developing
economies, Honda must continue to Honda global motorcycle
production capacity (includes ATVs)
increase the fuel efficiency and lower
(million units)
the exhaust emissions of its products by 12.519 12.852
12 10.875
implementing advanced environmental 7.966
9.152
9
Cell assembly (illustration)
technologies. In addition, it must 6
implement advanced safety 3

technologies to satisfy the needs of 2002 2003 2004 2005 2006 (year)

societies around the world. Outside of Japan In Japan

Building competitive strength through superior performance and

even higher quality
To confront these challenges, Honda has decided to move in stages to
concentrate the production of motorcycles at Kumamoto Factory. Along with the
small motorcycles (under 250cc) already produced at Kumamoto Factory, the
production of mid-size and large motorcycles (250cc and up) will be transferred
from Hamamatsu Factory to Kumamoto Factory. We’re improving motorcycle
production efficiency and building global competitive strength through a
revolutionary improvement in production capacity. We’re promoting the
smoother introduction of new technologies and new models, as well as
strengthening and expanding production capacity at factories in Japan and
Kiyokazu Sasabe
Project Leader
around the world. To these ends, in September 2006 we decided to build a new
New Motorcycle Plant Project motorcycle manufacturing plant at Kumamoto Factory. Scheduled to begin
Kumamoto Factory
operation in 2008, it will have an annual production capacity of 600,000 units.
We are determined to make the new facility environmentally responsible and
people-friendly as we continue to strengthen our competitive position around
the globe. As specific goals, we also aim to achieve further standardization of the
components of small commuter bikes in order to reduce their cost, and to add
new value to performance bikes by providing superior functionality and even
higher quality.

19 CSR Report 2007

 In addition, we plan to step up efforts to cultivate new engineering talent and
enhance ties with the local community. Kumamoto Factory will increasingly
exercise its leadership as the home base for worldwide Honda motorcycle and
ATV (All-Terrain Vehicle) production.

Factories growing with their communities

Since Kumamoto Factory began operations in 1976, we have worked to grow
harmoniously with the region by cultivating close contacts with the local
community. For example, since the facility opened we have held regular town
meetings, inviting representatives of Ozu Town to exchange information and
opinions twice a year. In addition, we hold annual meetings to share news with Honda meets with Ozu authorities

representatives of local government and media organizations.

In conjunction with construction of the new plant, we plan to hold meetings Stakeholder’s Perspective
with government and local residents during the planning stage, thoroughly Proud to become
presenting our plans and taking their views into consideration. “Motorcycle Town”
With a view to contributing to the community, we offer local children traffic One of the critical issues faced by rural
regions throughout Japan is the exodus of
safety training, environmental education and cardboard crafts events that provide young people to big cities. Honda’s decision
them an opportunity to enjoy making things with their hands. We also organize to expand motorcycle production in Ozu is
thus most welcome. By contributing to the
facility tours for elementary and junior high school youth, as well as open our growth of local employment and increasing
facility and its grounds for community events. the proportion of young people putting
down roots here, the new plant will help
Naturally, our commitment to environmental conservation remains constant. revitalize the town. More two- and
Preservation of watersheds is one important example. Kumamoto Prefecture is three-generation households are being
created as a result, so more seniors can
blessed with an abundance of fresh groundwater, and in many areas needs are hope to enjoy stronger family support. To
entirely met with wells. At Kumamoto Factory, we’re promoting the use of bring all this to fruition, we need to put
renewed effort into cultivating a new
rainwater and the recycling of industrial water to limit
generation of talented and motivated
the amount of water we draw from the ground. To help young people in Ozu. For example, the
preserve the sources of the water that nourishes us all, whole community could take part by
holding motocross
we are working hand in hand with local residents to competitions and
protect watersheds through reforestation. homecomings for
motorcycle owners. We
Striving to grow in harmony with the local could also upgrade
community as a good corporate citizen, we plan to local roads, working
together to turn Ozu
continue these friendly exchanges with the people into ”Motorcycle Town,” Isao Ieiri
Tatsuya Kitahata alongside whom we live and work. giving our home a Mayor, Ozu Town
Business Administration Division fresh surge of energy. Kumamoto Prefecture
Kumamoto Factory

Artist’s depiction of the new motorcycle plant at Kumamoto Factory CSR Report 2007 20
 CO2 emissions targets for all products and First, by optimizing both mobility and energy use, Honda
production worldwide is working to further advance the efficiency of gasoline
Automobiles, motorcycles and other means of motorized engine technology. Hybrid automobiles* are one example.
transportation consume gasoline, diesel or other fossil They’re ideally suited to stop-and-go city traffic, but are not
fuels, emitting carbon dioxide (CO2), nitrogen oxides so efficient for high-speed, long-distance highway travel.
(NOx) and other gases in the process. This contributes to Diesel engines, on the other hand, offer superior fuel
resource depletion, climate change, air pollution and efficiency over longer distances. While further enhancing
other environmental problems. the fuel efficiency of gasoline-powered vehicles, Honda is
On the other hand, mobility is indispensable in indus- also offering its customers compact hybrid vehicles for city
trial development and improving quality of life. There can driving, and, at the same time, developing better diesel
be no denying that ongoing economic growth through- engines for the mid-size and larger vehicles favored for
out the world will heighten demand for mobility. Manu- highway travel and long-haul commercial purposes. In
facturers of mobility products thus face the conflicting these ways, we’re optimizing the environmental perfor-
challenges of reducing their environmental impact while mance of different vehicles for different purposes. We are
satisfying growing demand. also working toward the full-scale commercialization of fuel
Striving to fulfill its responsibilities as a manufacturer of cell vehicles, often considered the ultimate clean car. And
mobility products, while also creating new value for its we’re working to implement PGM-FI** technology through-
customers, in May 2006 Honda announced CO2 emissions out our motorcycle lineup, as well as introducing ultra-low
reduction targets for all its products and production friction engines and variable cylinder management systems
activities worldwide, to take effect by 2010 (see page 41). to improve fuel efficiency.
This voluntary announcement of targets for CO2 Second, we are working to develop alternate forms of
reduction—a first for the global auto industry—has drawn energy: solar panels and ethanol, cogeneration and other
attention from around the world. ways of providing clean power.
Through a diverse range of environmental technology
initiatives, Honda is delivering on the promise of driving
Making the most of all forms of energy
pleasure and environmental responsibility.
In an effort to reduce the CO2 emissions of the vehicles it * Hybrid automobiles use both a gasoline engine and an electric motor for locomotion. They
feature regenerative braking systems that recover braking energy and store it as electricity in
produces, Honda is engaged in a broad range of environ- batteries. Using this electrical energy in the motor to supplement the power of the gasoline
mental initiatives that can be divided into two main forms engine, they provide superior fuel efficiency. Hybrid vehicles are well suited to stop-and-go
city traffic.
of innovation. ** Programmed Fuel Injection

Our Vision of Environmental

Technology
Implementing a range of environmental
FY2007 Highlights
Striving to be a company society technologies, we’re delivering on our promise
wants to exist

The Honda of genuine value in mobility—driving pleasure

Challenge and environmental responsibility.
Part

21 CSR Report 2007

Our Vision of Environmental Technology (1)

Potential of the next-generation diesel engine

——combatting global warming and using energy resources efficiently

Developing cleaner diesel technology to combat global warming Honda CSR in Action
(Corporate Communications)
The next-generation diesel engine Honda announced in May 2006 represents a
major step in our ongoing pursuit of innovation in engine technology. Since many people consider diesels loud,
smelly and dirty, I think it’s essential to
Diesels are more fuel efficient and emit less CO2 than gasoline engines. clearly and consistently communicate
However, due to their emission of particulate matter (PM) and nitrogen oxides encouraging facts about them. In the spirit
of innovation and initiative that Honda
(NOx), in Japan they are not considered to be particularly environmentally values, I plan to find
responsible. But recent advances in fuel injection and exhaust gas treatment new ways to convey
our message of
technologies have made diesel emissions considerably cleaner. In Europe, where driving pleasure—and
diesels have long been considered a next-generation clean engine, interest in diesel to make sure the
benefits of our
technology has risen along with the increase in environmental consciousness. advanced diesel
Today over half of the passenger cars on the European market are diesels. technologies are truly Keitaro Yamamoto
appreciated. Corporate Communications
An examination of the CO2 emissions associated with the life cycle of
gasoline-powered vehicles reveals that while emissions generated in vehicle use Honda CSR in Action (European Sales)
represent the largest proportion of emissions, those generated during gasoline
In the rapidly expanding diesel market in
refinement represent the second largest proportion (see graphic below). A key the UK, Honda diesel vehicles have a strong
merit of diesel technology is that the CO2 emissions generated in refining diesel presence. Customers appreciate not only
their superior fuel efficiency but also the
are substantially less than those generated when refining gasoline. fact that they’re as quiet, easy to drive and
As global warming captures broader public attention, interest in diesel powerful as gasoline-engine vehicles.
Honda is all about the
technology will likely grow in Japan and North America, where most vehicles are spirit of challenge. We
currently gasoline-powered. will continue to push
and develop new
environmentally
Using energy wisely responsible
technologies and
The popularization of diesel technology would significantly contribute to more vehicles to produce Tom Gardner
efficient use of energy resources—especially in Japan, which imports virtually all the best result for our Marketing, Honda UK
customers.
its oil. This is particularly the case given that the proportions of gasoline, diesel
and other petrochemical products derived from the refinement of crude oil are
constant, so in Japan, where the vast majority of cars run on Average CO2 emissions in the life cycle of a Honda Civic
gasoline, increased use of diesel would increase efficiency. The Transportation
Production 0.7%
popularization of diesel vehicles could help ensure that the oil Fuel 6.4%
Japan imports is used efficiently. 11.0%
Fuel refining
Disposal
Diesels can also run on liquid natural gas, liquid fuels that can 0.2% 18.0%
Service
be derived from coal and biomass, canola and other forms of
3.6%
biodiesel. This flexibility is a feature that makes the future Use
60.1%
transition to diesels compelling.
Honda’s pursuit of cleaner diesel 78.1%
Fuel refining + use
technology is thus driven not only (Calculations performed in Japan based on Honda’s Life
by concerns over global warming, Cycle Assessment. Please see page 54 for more information.)
but also by a broader perspective that takes into
account the efficient use of energy resources
and the utilization of alternate forms of
Kenichi Nagahiro
energy. Automobile R&D Center

CSR Report 2007 22

 Honda CSR in Action (Purchasing) Aiming to be the world’s first automaker to comply with US standards
The pace of diesel engine component
for diesel NOx emissions
development is fast and cost competition The key development objective with this new diesel was to see just how much
is fierce. Speed is of the essence. To ensure we could reduce NOx emissions. Although diesel technology has come a long
a stable supply of components and
materials that meet specifications, we are way, no automaker has introduced a diesel vehicle that complies with the
engaged in mid- and long-term planning, stringent California emissions standards. The new 2007 standards are even
sharing information
among suppliers, our tougher. Similarly tough standards are expected to be introduced in Japan in
R&D arm and 2009.
purchasing. We’re
working to develop Confronting this challenge, Honda has developed a next-generation diesel
bonds of trust with engine that features a revolutionary lean NOx catalytic converter that uses the
our suppliers that will
serve as the reductive reaction of ammonia generated within the catalytic converter to reduce
Kazuyoshi Saito
foundation of Automobile Purchasing NOx. The result is a diesel with NOx emissions on par (according to Honda
long-term growth.
calculations) with those of a gasoline engine, complying with the EPA’s Tier 2 Bin 5
Honda CSR in Action (Patents)
regulations—a world’s first. This achievement has attracted a great deal of
attention.
Honda has always had a deep respect for
originality. Our engineers are dedicated to
Other methods of reducing NOx emissions, in which urea is injected into the
creating new technologies. Our job is to exhaust pipe, have been familiar to the auto industry for some time. However,
support that effort, making sure that our
work does not encroach on the
with urea injection technologies, the injection devices and the requirement for
entitlements of third parties, and ensuring on-board urea storage tanks tend to increase vehicle weight, while the need for
that the patents Honda holds on its
periodic replenishment of the urea supply is problematic. Honda’s objective was
technologies are fully protected. This also
applies to the area of to create a compact, lightweight, maintenance-free NOx reduction system for
diesel development, diesel engines. The result is the new, lean NOx catalytic converter.
where we are working
to protect advances in Along with developing superior technology for cleaning exhaust gas, Honda
Honda technology by plans to address other technical challenges in developing clean diesel engines,
filing patent
applications in an such as meeting on-board diagnostic system requirements. It plans to introduce a
appropriate and timely Megumi Hayashida new diesel vehicle in the US in 2009. Honda is also planning to introduce this new
fashion. Automobile R&D Center
environmentally responsible diesel in Japan.
Diesel emissions cleaning technologies
Selective catalytic reduction (used by other manufacturers)
Selective Catalytic Reduction System

Oxidation catalyst DPF* Urea SCR*

Exhaust from Cleaner

the engine exhaust
CO and HC Particulate matter removal
emissions reduced * DPF: Diesel Particulate Filter Urea accretion system Urea tank

NOx scrubbing * SCR: Selective Catalytic Reduction

Honda’s lean NOx catalytic converter

Light Compact Maintenance-free

Lean NOx Catalytic Converter

Oxidation catalyst DPF Lean NOx catalyst

Exhaust from Cleaner

the engine exhaust
CO and HC Particulate matter removal
emissions reduced NOx scrubbing

23 CSR Report 2007

 Our Vision of Environmental Technology (2)

Advanced motorcycle environmental

technology
——implementing fuel injection technology throughout the product lineup
Precisely controlling fuel consumption
As the world’s leading motorcycle manufacturer, Honda is working to
improve the fuel efficiency and lower the emissions of all its products.
We’re working hard to enhance environmental performance across
the board to help reach our announced target—a 10% reduction
in CO2 emissions on all products worldwide by 2010, using a
FY2001 baseline.
To attain this target, Honda has announced that we will
implement PGM-FI on most scooters manufactured in Japan
by 2007 and most motorcycles manufactured worldwide by
the end of 2010. PGM-FI adapts to driving conditions and The PGM-FI-equipped Wave 125i for the Thai market

changes in engine load caused by acceleration and Honda CSR in Action (Planning)
deceleration, adjusting the timing of ignition as well as the
The early introduction of cleaner-running,
timing and volume of fuel injection for optimal electronic control. With higher fuel-efficiency 4-stroke engines has
implementation of PGM-FI, fuel efficiency is improved and emissions are reduced been a key element in Honda’s leadership
of the motorcycle industry since the
without compromising performance. Performance is also improved in cold starts, company’s foundation. Recently, Honda
and when the engine has not been started for an extended period. has been working to further enhance the
environmental performance of its
For some time, Honda has featured PGM-FI on many larger motorcycles sold products by implementing 4-stroke
worldwide. We recently expanded the implementation of this technology: in technology on scooters and extending the
application of PGM-FI. While proactively
2003 to 125-150cc motorcycles, and in 2004 to 50cc scooters (a world’s first). We implementing environmental
are striving to offer PGM-FI on commuter bikes and other small motorcycles, the technologies, Honda has also continued to
apply original technologies to improve the
choice of most customers in developing economies around the world. essential qualities that make the
motorcycle an attractive product:
simplicity, a compact
Compact, low-cost, high-performance PGM-FI for smaller models design and a
reasonable price. By
Implementing PGM-FI on smaller motorcycles presented many technical delivering such
challenges. Naturally, the system needed to be smaller and lighter than the one high-quality products
and satisfying
used on larger motorcycles. In addition, more precise fuel injection control was customers, I believe
required, and the system needed to be adapted to work with kick-start Honda is fulfilling an Hiroshi Sekiguchi
important corporate Motorcycle Business
mechanisms and air-cooled engines. Costs also had to be reduced. social responsibility. Planning Office
Honda engineers overcame these challenges by developing highly precise
control technology. They reduced the fuel particle size to one-half, the units of air
supply to one-third, and the units of fuel injection control to one-fifth of those
used in fuel injection for larger motorcycles. They added a separate circuit for kick
starting so the bikes could be started with only a small amount of current. They
also upgraded many materials and significantly reduced the number of
components to simplify the design and reduce the cost.
The result of these technological developments is that Honda’s PGM-FI system
has been optimized for most
The challenge of adapting PGM-FI to smaller
50-250cc engines. Honda is motorcycles Minoru Ueda
well on its way to achieving Motorcycle R&D Center
More compact Smaller displacement
its ultimate objective of Smaller Precise fuel-flow volume control
Lighter Fuel particle size control
equipping all the motorcycles Compact
it manufactures worldwide Developing countries’ needs
PGM-FI Price reduction
Kick-start capability Lower costs
with its advanced fuel (even when the battery is flat) Fewer parts
Air-cooled engines Integrating functions
injection technology.

CSR Report 2007 24

 Our Vision of Environmental Technology (3)

Powered by Honda:
energy conservation in the home
——the potential of a new cogeneration system
Evolution of the world’s first household cogeneration unit
Cogeneration systems use natural gas as fuel to produce both the electricity and
hot water households require. This makes them an efficient, environmentally
responsible energy system. Early to recognize the potential social value of
cogeneration, Honda applied its long years of experience in designing compact
Household cogeneration system
engines and generators to create
Household
the world’s first cogeneration unit
cogeneration unit
small enough to be used at
Electricity from utility
home. Introduced to the
Generator Integrator
Power Electricity Integrator
Japanese market in 2003 via
conditioner Bathroom dryer/
heater major utility companies, the
Natural Gas Ecowill household cogeneration
gas/LPG engine Bath

Exhaust Floor heating system

system has become a favorite
Heat Heat
exchanger with customers who appreciate
Natural gas/
LPG Boiler/hot water tank Hot water Heating how efficiently it provides power
for floor-heating systems and
reduces lighting costs.
Right from the development stage, Honda emphasized durability,
compactness and efficiency. Over its lifetime, a cogeneration system must
operate 10 times as long as an automobile does. Its operation must also be quiet
and clean. Honda managed to reduce the unit’s noise level to that of an
air-conditioner exhaust unit. By applying 3-way catalysts* and other advanced
technologies, it endowed the product with truly superior environmental
performance.
A new-generation model featuring an improvement of approximately 10% in
electrical efficiency was released in Japan in October 2006 and introduced in the
Honda’s MCHP 1.0 household MCHP 1.0 mechanisms US in March 2007. Pursuing even greater efficiency, longer operating life and
cogeneration unit
lower cost, Honda will continue working to popularize household cogeneration
systems, promoting energy conservation in homes around the world.
* Made with platinum and other precious metals, 3-way catalysts function to clean emissions by eliminating carbon monoxide
(CO), hydrocarbons (HC) and nitrogen oxides (NOx).

Stakeholder’s Perspective

A powerful partnership for environmentally responsible products

While working with Honda on the development of the Ecowill cogeneration system, I was struck
by their determination and dedication to the technology. During the testing phase, we
encountered issues with durability and noise, but each time a problem arose, Honda engineers
were there, making the necessary improvements, checking and rechecking until everything was
resolved. It was a satisfying experience, and one of the reasons we succeeded
in bringing this environmentally responsible product to market.
Since we came from different industries, at first we experienced challenges in
aligning our approaches. But by the time we brought out the first product,
we had created a powerful partnership, achieving a synergy between
Honda’s superior technology and the understanding of the market and
customer needs possessed by Osaka Gas. Thanks to the strength of our
Kazuhiro Togawa partnership, in October 2006 we succeeded in introducing a new model with Yoshitaka Shibata
Power Products R&D Center even better electrical efficiency that also responds to market needs with an Residential Energy
enhanced structure and design. It’s even easier to maintain. Business Unit
Osaka Gas Co., Ltd.

25 CSR Report 2007

 TO P ICS

Developing sustainable energies

Cooperative research in making ethanol from cellulosic biomass

When bioethanol produced from crops and wood material is the RITE strain—a microorganism developed by RITE that
burned, the CO2 released is balanced by the CO2 captured by converts sugar into alcohol—and the application of Honda
plants through photosynthesis; therefore, when the total life technology that enables a significant increase in alcohol
cycle is considered, the amount of CO2 in the atmosphere does conversion efficiency compared to conventional cellulosic
not increase. Bioethanol can thus be considered a bioethanol production processes.
carbon-neutral fuel. However, since conventional bioethanol is With a view to eventual commercial production, Honda has
produced from edible crops such as sugarcane and corn, the established a test plant at its Wako Fundamental Research
need to balance the demand for fuel with that for food can Center to continue examining the market appeal and
create difficulties in securing a stable supply. Increased economic viability of this new bioethanol technology.
production of bioethanol also poses the problem of potentially Bioethanol production processes
forcing up crop prices, thereby reducing the viability of the Conventional methodology
energy source. To solve this problem, the Research Institute of Food
Edible
Innovative Technology for the Earth (RITE) and Honda have parts Extraction Conversion to
Sugar alcohol
developed a technology to produce ethanol from cellulose Biomass refinement
and hemicellulose, both found in soft-biomass. This includes
inedible leaves and stalks of plants such as rice straw, which Inedible
Separation Saccharifi- Conversion to
Bioethanol
cation alcohol
until now could not be readily converted to ethanol. The new parts Biomass Cellulose Sugar
RITE-Honda process substantially reduces the negative New High pressure, Enzymes RITE strain
influence of fermentation inhibitors through the utilization of methodology high temperature

Toward the full-scale commercialization of fuel cell vehicles

A next-generation fuel cell vehicle in 2008 for Japan and the US

In 2008 Honda will begin limited marketing in Japan and the Whereas with previous fuel cell stacks the hydrogen and water
US of a next-generation fuel cell vehicle based on the FCX formed in electricity generation flowed horizontally, the new
Concept. Featuring significant gains in both environmental and FCX Concept features vertical-flow design. This allows gravity
driving performance, the FCX Concept is equipped with a V to assist in water management, resulting in a major
Flow fuel cell platform consisting of a compact, high-efficiency improvement in water drainage, the key to high-efficiency fuel
fuel cell stack arranged in an innovative center-tunnel layout. cell stack performance. The result is stable power generation
This has allowed designers to create an elegant, low-riding under a broad range of conditions, and higher output from a
sedan form that would have been difficult to achieve in a smaller package. Low-temperature startup has also been
conventional fuel cell vehicle. significantly improved, enabling cold-weather starts at
temperatures 10°C (18°F) lower than the current FCX—as low
as -30°C (-22°F). Efficiency improvements to major power plant
components give the vehicle a range approximately 30%
greater than the current FCX. The vehicle is also highly
efficient, with an energy efficiency of about 60%—
approximately three times that of a gasoline vehicle, twice that
of a hybrid, and 10% better than the current FCX. The seats and
door linings are made of a durable new Honda-developed
The compact, high-efficiency Honda FC Stack Seat made of new Honda bio-fabric bio-fabric that is resistant to sunlight.

FCX Concept featuring V Flow fuel cell platform

CSR Report 2007 26

 Chapter

Looking After Quality

and Safety
In working to fulfill its responsibilities as a leading mobility
manufacturer, meeting the expectations of all its stakeholders,
and striving to be a company society wants to exist, Honda
considers quality and safety to be of the highest priority.
Maintaining global standards, we’re endeavoring to take
quality to the next level throughout our operations. We’re
pursuing greater safety by providing safer products and
safety education for drivers, riders and everyone else. We’re
continually working to enhance the safety of our products
through ongoing technological development and the
promotion of traffic safety education.
Web For more information on Honda’s safety initiatives,
please visit us at
http://world.honda.com/safety/
For more information on Honda’s traffic safety initiatives,
please visit us at
http://world.honda.com/safety/safer-driving/

27 CSR Report 2007

Insisting on Quality

sharing them with the rest of the organization,

Fundamental Approach our dedicated associates are working to prevent
to Quality quality issues from recurring.

Aiming for 120% Worldwide quality management

“If 99% of the products we make are perfect, Honda facilities around the world are certified
that would seem like a pretty good record. under ISO quality assurance and environmental
However, the customers who become the management systems standards. Special
owners of the remaining 1% will surely consider product quality assurance systems are
their products 100% defective. It is unacceptable being implemented in many local markets.
that even one customer in a thousand—even Since Honda manufactures products and
one customer in ten thousand—should receive procures both parts and materials in many
a defective product. That’s why we have to different countries, however, a global quality
aim for 120%.” When founder Soichiro Honda assurance system is required. We are currently
spoke these words he defined the company’s implementing the Global Honda Quality
fundamental approach to quality: what it means Standard with a view to ensuring the quality
to strive to be a company society wants to exist. of every single Honda product, regardless of
Determined to meet or exceed the expectations where it is purchased. Under the direction of
of customers, Honda is taking new initiatives top management, our facilities around the
to reach ever-higher product quality standards. world are working constantly to harmonize their
That is who we are. products, services and logistics to this global
Honda management has identified the standard, taking care to prevent any recurrence
pursuit of ever-higher quality as a top priority of known issues and deliver products of the
for the entire organization. All associates are highest possible quality to customers.
united in the drive to achieve unprecedented
levels of quality in the products we deliver to Systematic response to customer issues
our customers.
Customer Customer

Strengthening Our Systems Enquiries Response

for Enhanced Quality

Dealerships Enquiries Response

Quality assurance
Honda has established Quality Innovation Reporting Feedback
Centers to prevent avoidable product-quality
Honda
issues from arising and enhance our capacity Service department Customer Relations Centers
to swiftly resolve difficulties whenever they
do. Specialized service departments at these Quality assurance departments
(Assessment, analysis, countermeasures, reports)
centers are equipped to handle cases referred
to them by dealerships worldwide. They provide
Production division Design division
rapid information gathering, timely diagnosis
and the resolution of any quality issues. They
also keep customers and technicians fully up
to speed by disseminating the latest updates
on recommended maintenance procedures. By Parts manufacturers (suppliers)

carefully documenting issues and solutions, then

CSR Report 2007 28

 Insisting on Quality

Building Quality Handling Quality Issues

Teaching quality control Recall system

In Japan, Honda offers three different quality Seeking to prevent accidents and protect
control courses, each focusing on a specific skill vehicle occupants and pedestrians, Honda
set. Since 1971, Honda Basic Courses (HBC) have maintains appropriate recall, repair and
provided quality education not only to Honda improvement procedures. Our goal is to help
associates, but also to trainees sent to us by maintain traffic safety, prevent injuries and
suppliers, thereby helping cultivate new leaders damage, and minimize exhaust emissions.
in quality manufacturing. If a model defect is discovered and action is
deemed necessary, announcements are made
Objectives of quality control education immediately and in accordance with the laws
Trainees and regulations of the countries involved. Offers
Objective Period enrolled in
FY2007 to handle the required repairs at no charge are
Introduction to the importance of issued by mail, telephone and other means
quality in manufacturing and Honda’s
Quality Control Junior approach to quality; training in
1 day 376
of communication from local dealerships to
Course respecting workplace rules, recognizing
irregularities and changes in conditions, owners of the affected vehicles.
and reporting them appropriately.

Quality control approaches and

procedures; training required to
Compliance with Japan’s Consumer
Quality Control Foreman
Course
implement quality control procedures
and show leadership in quality control
3 days 390 Products Safety Law
matters in the factory workgroup.
The Consumer Products Safety Law was
Statistical quality control approaches; amended in May 2007 to more strongly protect
procedures; acquisition of knowledge
related to the practical handling of consumers from defects that could be life-
Honda Quality Control problems and issues beyond the level
Basic Course covered in the Quality Control Foreman 21 days 75 threatening or cause personal injury. The
Course; training required to effectively
teach quality control procedures to others amendment brought into force new regulations
on the factory floor.
governing the manufacture and sale of certain
goods. It mandates the compilation and
publication of information relating to accidents
Honda Basic Course flow associated with products and other measures
designed to protect the rights of consumers.
Trainees enrolled It also compels manufacturers and importers
Matching of needs and curriculum of specified products to report any serious
accidents to Japan’s Ministry of Economy, Trade
HBC
1. Attend lecture
2. Issue-oriented and Industry.
study group
As a manufacturer offering consumer goods
for sale, Honda is, of course, in full compliance
3. Apply solutions
in workplace with this law, gathering information via our own
systems, which were established to help ensure
Repeating steps 1 to 3, taking initiative
to resolve issues the safety of our customers, and submitting
reports to the designated authorities in a timely
and precise manner, as required.
Cultivating expertise in statistical quality control:
approach, procedures, practical application

29 CSR Report 2007

Looking After Safety—Safety Technologies and Driving Safety

safety, developing its own advanced, intelligent

Honda’s Approach to Safety technologies and leading the way in bringing
them to market. Honda was the first automaker
in Japan to introduce many of the safety
The starting point: technologies used in today’s cars, including
respect for the individual three-point seat belts, Anti-Lock Braking System
Honda believes in the dignity of each and every (ABS) and SRS airbags. Honda has always been a
person. Our basic principle of respect for the leader in implementing intelligent technologies
individual is central to our approach to safety. and developing both active and passive safety
Since the company’s foundation we have technologies, including car bodies designed to
applied this principle in all our activities and help ensure occupant and pedestrian safety.
operations. As the world’s leading motorcycle
For Honda, safety is not just about protecting manufacturer, Honda has taken the initiative in
people who drive our cars or ride our bikes; it’s introducing the first motorcycle airbag system,
also about protecting cyclists, pedestrians and as well as the Combined Brake System, ABS and
the occupants of other vehicles. We want to other advanced braking systems.
take care of all those who share the roads in our Since the establishment of the Driving Safety
mobile societies. It’s about safety for everyone. Promotion Center in 1970, Honda has continued
to be proactive in the promotion of traffic safety
Safer equipment education. We have a strong track record in
and safety education traffic safety education. Our commitment is a
Honda is tackling safety issues from both constant.
product and educational perspectives. We’re We will continue to pursue both product
working to ensure that our vehicles deliver the safety and traffic safety education, as well
best possible safety performance. We’re also as the synergistic benefits of both types of
promoting safe driving skills and awareness initiative, always seeking to contribute to the
among our customers and society at large. development of a safer mobility society.
Honda has always been in the vanguard of

Honda’s approach to safety

Respect for the Individual

Every human being is precious, regardless of

status or position
Safety technology Education

Optimizing safety performance

Promoting safe driving skills
Active Safety and awareness
• Accident prevention technology
• Hazard avoidance technology • People: training driving safety trainers
• Things: making experiential training equipment
Pre-Crash Safety
available
Passive Safety • Knowledge: creating programs and teaching
• Injury minimization technology materials; fostering expertise
• Post-accident technology

CSR Report 2007 30

 Looking After Safety—Safety Technologies and Driving Safety

Honda safety technology (1)

Developing Safety Active Safety
Technology The objective of active safety is to enhance
traffic safety through the following measures:
The fundamentals of safety traffic safety education; accident prevention
technology development technology that helps the driver avoid
• Setting ambitious targets: dangerous situations; and hazard avoidance
developing advanced safety technology technology that helps the driver take preventive
Various safety standards for automobiles and action when danger is present.
motorcycles are in force worldwide. Respecting As part of our efforts in active safety, Honda
and proactively complying with the laws and has developed riding and driving simulators,
specifications of each country and region, applying our experience and original simulation
Honda also strives continuously to enhance technology to create these practical training
the safety performance of its products. devices.
We believe that safety is a prerequisite of In the area of accident prevention, Honda is
mobility. We’re setting ambitious targets in the developing technologies that allow drivers and
ongoing development of our advanced safety riders to see and be seen more clearly. We’re
technology, optimizing the safety performance also enhancing technologies such as driver-
of all our products. friendly interfaces that help drivers and riders
improve their concentration on the road.
• Pursuing safety at every stage In the area of hazard avoidance, Honda is
Working toward the objective of safety for engaged in ongoing enhancement of the basic
everyone, Honda is developing technologies performance of automobiles and motorcycles,
and equipment in support of everything from helping drivers and riders avoid hazards. We
traffic safety training to the provision of post- also develop equipment that supports driver
accident emergency services. and rider vehicle operation.
With motorcycles, we’re working on both
active and passive safety initiatives, while with • Developing bicycle simulators
automobiles we’re also developing pre-crash To confront social problems caused by cyclists
safety technology. With power products, our failing to respect the rules of the road, Honda
development of a wide range of products has has developed a Bicycle Simulator. It was
been guided by our own Honda Power Product designed to help riders safely experience
Safety Requirement. dangerous situations and improve their ability

Basic categories of safety technology

Active Safety Passive Safety

Pre-Crash Safety

Traffic safety Accident Hazard Injury

education prevention avoidance Pre-Crash Safety minimization Post-accident

31 CSR Report 2007

 Chapter
Looking After Quality
and Safety

* Longitudinal Oriented
to predict and anticipate problems. The device advanced safety research vehicle—a first for a Normative Temporal Gap
provides training for everyone from children production vehicle. To enhance visibility, the Compensation

to seniors in areas such as basic operation, turn indicators and tail lights are positioned
traffic rules, and hazard avoidance. We’re now high on the body, while lower headlights and
studying how to leverage this new simulator for wheel caps are equipped with reflectors.
maximum social benefit.

Bicycle simulator MonPal ML200

• Intelligent Night Vision System

With the Intelligent Night Vision System, visuals
captured by far infrared camera are shown
on a dedicated display. When a pedestrian is
detected, the driver is warned via an audio
caution and a visual enhancement frame
around the pedestrian’s on-screen video image.
The system helps make nighttime driving safer.

Honda’s bicycle simulator on display

• New MonPal designed with safety in mind

With the aging of society, more people are using
electric carts, and the risk of accidents involving
these scooters and other motor vehicles is
increasing. With this in mind, Honda introduced
a new MonPal 4-wheel scooter model in March
2006. While offering a comfortable ride and
high maneuvering stability, it incorporates a
variety of new safety features.
The design of the front fender makes it easy
to see the direction and motion of the front
wheel from the rider’s seat. The MonPal ML200
incorporates LONG* visibility enhancement
design adapted from the Honda ASV-3 Viewed with naked eye Viewed with Intelligent Night Vision System

CSR Report 2007 32

 Looking After Safety—Safety Technologies and Driving Safety

Honda safety technology (2) Honda safety technology (3)

Pre-Crash Safety Passive Safety
Pre-crash safety is a new approach to Passive safety is focused on minimizing the
automobile safety technology that embraces injuries and damage that may occur in the event
both active and passive safety. Some pre- of an accident. Initiatives are broadly divided
crash safety technologies warn drivers of an into injury minimization technology, which
unavoidable collision or risk of collision and focuses on the protection of vehicle occupants
activate brakes and seat belt pretensioners to and pedestrians at the moment of impact, and
help minimize injuries and vehicle damage. minimization of post-accident dangers.
To minimize injuries in automobile accidents,
• Collision Mitigation Brake System Honda has developed car bodies designed to
(CMBS) + E-Pretensioners effectively absorb and disperse impact energy,
The system uses millimeter-wave radar to rigid cabin frames to secure a survival zone
predict collisions. It provides braking assist and for occupants, and devices such as seat belts
seatbelt retraction, prompts the driver to take and airbags to soften the impact of a crash.
action to avoid an accident, and helps mitigate Honda has also implemented pedestrian injury-
occupant injuries and vehicle damage in the reduction and other technologies to protect
event of an accident. others.
In the area of motorcycle passive safety,
Honda has developed and introduced a
motorcycle airbag system that helps lessen the
CMBS + E-Pretensioners severity of injuries.
In the area of post-accident technology,
Honda has implemented technologies to inhibit
vehicle fires and support escape and rescue
operations in various emergencies. We also
offer a service that allows customers in Japan to
make urgent contact with emergency medical
1. Close to vehicle ahead: services through our car navigation systems.
If the car ahead is too close (and the system calculates that there is a risk of collision), the driver is
prompted to take preventive action with audio and visual warnings.
• World’s first airbag-equipped motorcycle
The Honda Gold Wing is the first production
motorcycle ever sold to be equipped with
an airbag system. The motorcycle airbag is
designed to lessen the severity of injuries

2. Closer to vehicle ahead:

If the distance between the two vehicles further diminishes, the system applies light braking and
provides a tactile warning by gently retracting the driver’s seatbelt.

3. Collision imminent:
If an accident appears to be unavoidable, the system applies strong braking and firmly retracts
both driver’s and passenger’s seatbelts to hold occupants in place and lessen vehicle damage.
Motorcycle airbag (deployed)

33 CSR Report 2007

 Chapter
Looking After Quality
and Safety

caused by the rider colliding with another Center at the Automobile R&D Center (Tochigi),
vehicle, the road or other objects by absorbing Honda is continuing its research on how
some of the forward energy of the rider’s body. accidents happen and developing additional
Its deployment is activated by a control unit technology to protect people. The gigantic
that calculates deceleration data received from 41,000m2 facility features collision courses set
sensors. at 15-degree intervals so that crash tests can
be conducted from every angle, allowing our
• Safety technology engineers to precisely reproduce real-world
that withstands real-world tests collisions. This allows us to collect valuable data
Approximately 60% of traffic fatalities result from and continue to put our safety technology to
multi-vehicle accidents. Based on its original the test.
G-Control technology*, Honda has developed * G-Control is technology
designed to help control
car bodies with crushable zones that absorb g-forces at the moment of
collision, thus minimizing
and disperse collision impact, and rigid survival injuries

zones that protect occupants in the event of

an accident. We’ve also introduced Advanced
Compatibility Engineering bodies to enhance
the vehicle’s ability to absorb crash energy in
collisions with vehicles of differing sizes, and
to minimize damage to other vehicles. At its
indoor omnidirectional Real World Crash Safety The indoor omnidirectional Real World Crash Test Facility

Safety Systems of the Near Future: the advanced technology Honda ASV-3** TOPICS
Research indicates that approximately 70% of fatalities and serious















7




































injuries resulting from traffic accidents occur because the driver
























































was not concentrating on the road, failed to notice a hazard or
















experienced other problems relating to delays in perception.







Honda
1991














ASV


















Therefore, to enhance automotive safety and minimize injuries



2006




3



























resulting from collisions, it is essential to develop technologies that
help drivers anticipate accidents.
Recognizing this need, since 1991 Honda has participated in
the Advanced Safety Vehicle Project of Japan’s Ministry of Land,
Infrastructure and Transport, working to develop next-generation
automobile safety technologies throughout the project’s three
phases. Results were announced most recently in 2006. Honda ASV-3
**Advanced Safety Vehicle

ASV-1 (FY1992-1996) ASV-2 (FY1997-2001) ASV-3 (FY2002-2007)

Testing the possibilities of preventive Development of the infrastructure Implementation of communication systems to reduce traffic accidents
safety required for preventive safety
•Prediction/Prevention Research •Driver Load and Injury Reduction Motorcycle technology Automobile technology
(Intelligent Technology for Navigation Research (Lane Keeping, ACC, CMBS) •Conspicuity Enhancement Design (FACE •Head-on Collision Avoidance Assistance System
Systems) •Pedestrian Protection Research design, LONG design) •Cornering Speed Control System
•Collision Avoidance Research (Navigation, Communications) •Rear View Assistance System •Adaptive Cruise Control System
(Laser/Radar) •Collision Safety Research (Airbags) •Advanced Adaptive
Motorcycle and automobile
•Pedestrian Safety Research •Preventive Safety Research communication technology Frontal-Lighting System
(Injury Reduction) •Oncoming Vehicle Information Assistance •Pedestrian Detection, Vision-Based Pedestrian
System Detection System
•Intersection Stop & Go Assistance System •Forward Obstacle Avoidance Assistance System
•Intersection Collision Mitigation Brake System
•Advanced Mayday System

CSR Report 2007 34

 Looking After Safety—Safety Technologies and Driving Safety

learner the opportunity to experience danger in

Traffic Safety Promotion safety. Honda focuses on helping the learner in
driver and rider safety education.
No matter how advanced automobile
Fundamental approach to traffic technology may become, ultimately human
safety education beings hold the key to traffic safety. In FY2007
• Focusing on hands-on driving safety we worked to enhance our programs by making
education them even more practical and experience-
Striving to make mobility safer and more based, by strengthening the education of
comfortable, Honda is engaged in initiatives to traffic safety trainers, by developing easy-to-
pass on safety education from person to person, understand learning materials, and by working
and in hands-on safety education that gives the to extend our initiatives overseas.

Traffic safety initiatives overview

Main target

Students
Children

Seniors
Location Content Trainers

Adults
• Safety advice at dealerships
• Safety seminars • Safety Coordinators
Automobile Certified Rainbow Dealer
• Driving schools • Chief Safety Coordinators
• Local traffic safety organizations

Dealerships • Safety advice at dealerships

Certified Safety • Riding Advisors
Motorcycle • Riding schools
Support Dealer • Sports riding schools Instructors
• Local traffic safety organizations

Power • MonPal Safe Operation Instructors

• Safety advice at dealerships
Products • MonPal Safe Operation Trainers

• Training for drivers and instructors

• Training for motorcycle and automobile dealership
associates
• Riding, driving training courses • Traffic Education Center instructors
• Training using Riding Simulators, Driving Simulators
In Japan

Traffic Education Centers (8 facilities) • Trainer exchanges and events, competitions to foster skill
improvement

• Special training programs for various age groups • Traffic Education Center instructors

• Educating trainers • Driving safety instructors

Honda facilities, Group companies • Driving/riding safety training for associates • Honda First Aid senior instructors
• Honda first aid • Honda First Aid instructors

• Development of learning materials

• Teachers and staff of schools
Regional initiatives • Trainer education
• Traffic safety trainers
• Educational programs

• Traffic safety campaigns

Industry initiatives • Development of traffic safety learning programs
• Collaboration on trainer education

• Advice at dealerships
Dealerships • Driving training courses
• Instructors at dealerships
(automobile, motorcycle) • Riding training courses
• Cooperation with local traffic safety initiatives
Overseas

• Trainer education
• Training for motorcycle and automobile dealership
associates
• Riding, driving training courses
Traffic Education Centers
• Training using Riding Simulators, Driving Simulators • Traffic Education Center instructors
(15 countries, 22 facilities)
• Cooperation with local traffic safety initiatives
• Courses for license seekers
• Trainer exchanges and events, competitions to foster skill
enhancement

35 CSR Report 2007

 Chapter
Looking After Quality
and Safety

FY2007 traffic safety initiatives • Enhancing learning materials—

• Strengthening practical training: heightening educational impact
hands-on learning at motorcycle and The Driving Safety Promotion Center and Traffic
automobile dealerships
Education Centers collaborate on research
Honda’s motorcycle and automobile dealerships and development of traffic safety education
perform a vital function by providing traffic software. In FY2007 they tested a driving course
safety training in their communities. They for senior drivers at five Traffic Education
constitute an expanding training network. Centers and worked on other approaches
At our automobile dealerships, some 20,000 designed to cultivate the learner’s powers of
specially trained safety advisors provide safety observation.
advice, safety seminars and driver education
programs. At our motorcycle dealerships, • International initiatives—
specially trained personnel offer riding expanding automobile dealership initiatives
education programs, some of which include the At many of Honda’s global affiliates, traffic safety
use of the Honda Riding Trainer simulator. education initiatives modeled on those in Japan
are being proactively implemented.
At Honda Motor RUS (Russia) and Honda
Vietnam, driving safety training programs went
into full gear in FY2007. In many countries in
Asia where rider safety programs at motorcycle
dealerships have been developed on the basis
of Traffic Education Center programs, various
community-based traffic safety initiatives,
Safety advice at a motorcycle dealership
including lifelong education programs, are
being developed and implemented as efforts in
the area of traffic safety intensify.
• Educating leaders— For example, Wuyang-Honda in China is
training Honda Group traffic safety instructors working with local authorities and residents
The Safety Japan Instructors’ Competition was in Zengcheng, Canton, to help reduce the
held for the 10th time in September 2006. number of traffic accidents. Based on analysis
Instructors from Traffic Education Centers in of a study of local urban traffic conditions
Japan, Honda factories, R&D Centers, motorcycle conducted in April 2006, work on specific
dealerships, automobile dealerships and global plans is to proceed in FY2008. At A.P. Honda in
affiliates—a total of 114 instructors representing Thailand, a traffic safety program was initiated
12 countries—got together in Suzuka to to meet the important
test their driving, riding and training skills in need for ongoing traffic
competition with each other. education for the country’s
children. In FY2007 the
program was implemented
on a trial basis in the cities
of Ratchaburi and Chiang
Rai. A nationwide rollout is
planned for FY2008. Traffic safety training for children in Thailand (A.P. Honda)
Safety Japan Instructors’ Competition

CSR Report 2007 36

 Chapter

Looking After the

Environment
As demand for mobility grows around the world, concerns
over the problems of global warming and climate change
are also growing. Squarely confronting this issue as a
global manufacturer of mobility products, Honda strives
to manufacture products with the lowest CO2 emissions
at plants with the lowest CO2 emissions. We’re the world’s
first automaker to announce voluntary global targets for
CO2 emissions for all products and production. We’re being
proactive. In a broad range of environmental conservation
initiatives designed in accordance with the Honda
Environment Statement, we are implementing
environmental management systems throughout our
worldwide operations.
Web For more information on Honda’s
environmental initiatives:
http://world.honda.com/environment/

37 CSR Report 2007

The Honda Environment Statement

issues. We have continued to strengthen our

The Honda Environment environmental conservation initiatives, which
Statement are central to everything we do.
Seeking to be a company society wants
Honda has long been committed to to exist, we’re focused on our commitment
environmental conservation. In the 1990s we to the future. The commitment to the future
strengthened our organizational structure and defined in our vision statement mandates that
released the Honda Environment Statement to we work determinedly to meet our ambitious
clearly define our approach to environmental environmental goals.

The Honda Environment Statement

As a responsible member of society whose task lies in the preservation of

the global environment, the company will make every effort to contribute to
human health and the preservation of the global environment in each phase of
its corporate activity. Only in this way will we be able to count on a successful
future not only for our company, but for the entire world.

We should pursue our daily business interests under the following principles:

1 We will make efforts to recycle materials and conserve resources and

energy at every stage of our products’ life cycle from research,
design, production and sales, to services and disposal.

2 We will make every effort to minimize and find appropriate methods to dispose of
waste and contaminants that are produced through the use of our products, and in
every stage of the life cycle of these products.

3 As both a member of the company and of society, each associate will focus
on the importance of making efforts to preserve human health and the global
environment, and will do his or her part to ensure that the company as a whole acts
responsibly.

We will consider the influence that our corporate activities have on the local
4 environment and society, and endeavor to improve the social standing of the company.

* Environmental Mark
This mark symbolizes
Established and announced in June 1992 the wind blowing gently
over the beautiful green
earth, clear water that
* gives the essence of
life, and the perpetually
shining sun. Honda uses
this environmental mark
around the world to show
its commitment to the
conservation of the global
environment.

CSR Report 2007 38

 Assessing Environmental Impact of Corporate Activities,
Policy Initiatives

Assessing Environmental
Impact, Policy Initiatives Production

Purchasing
Honda is aware of its responsibility to minimize
the environmental impact generated by its
Transportation
corporate activities and use of its products.
To achieve this, it is essential that we identify Product
specific issues and set targets for action. We set development
specific goals in the context of our Life Cycle
* LCA: Life Cycle
Assessment (LCA)* system, which is used to Sales
Assessment—a system
designed to evaluate the
Product
environmental impact of
measure, assess and analyze environmental recycling
a given product in every
stage of its life cycle, from
impact. Administration
the procurement of raw
materials to use, disposal
and/or reuse.

Environmental impact and major initiatives

Domain Concerns Environmental impact Major initiatives

Global environmental issues

• Exhaust emissions
CO2 • Fuelefficiency improvements
Product development Exhaust emissions • Noise reduction
Global warming
Noise • Recyclability improvements

Purchasing Ozone depletion • Green Purchasing

CO2
Waste
Wastewater
Exhaust emissions
Production Depletion of natural resources • Green
Noise Factories
Chemicals

Air pollution
CO2
Transportation • Green Logistics
Waste

Waste
Removed parts • Green
Dealers
Sales Fluorocarbons (automobiles, motorcycles and
Waste Water pollution power products)

• Recovery,
recycling and reuse of parts
End-of-life products Soil pollution • Technical
Product recycling support for the proper disposal
and recycling of end-of-life products

Noise
CO2
Administration • Green Offices
Waste
Local environmental issues

39 CSR Report 2007

Environmental Management

America, South America, Europe/Middle East/

Environmental Management Africa, Asia/Oceania and China), completing
* PDCA: plan, do, check,
the PDCA* cycle at the regional level. Issues act
considered to be global in scope are referred
Honda has developed an institutional to the World Environmental Committee, whose
framework to put into practice the principles deliberations are reflected in mid-term policy
of environmental conservation as defined in statements.
the Honda Environment Statement. Honda’s A hallmark of Honda environmental
environmental management system mandates initiatives is that planning and execution are not
that environmental conservation initiatives be delegated to specialists; rather, associates in all
planned and executed appropriately. departments are directly involved. All associates
are engaged with environmental issues as part
Policy of their duties.
Based on mid-term policies determined by
the Executive Council, environmental action Environmental preservation based on the PDCA cycle
plans are developed by individual departments. PDCA PDCA PDCA
These plans are then discussed and approved Execution

by Regional Environmental Committees. Next,

individual departments take responsibility for
Regional
implementation based on the commitments World Environmental Environmental Individual
Committee Committees departments
specified in their plans. Results are evaluated by
Regional Environmental Committees, and on
the basis of their guidance, plans and targets are
developed in each region (Japan, North/Central
PDCA PDCA PDCA

Global environmental preservation organization

World Environmental
Committee

Environment and Safety

Planning Office

Regional Headquarters

Regional Operations Regional Operations Regional Operations Regional Operations Regional Operations Regional Operations
(Japan) (North America) (South America) (Europe/Middle East/Africa) (Asia/Oceania) (China)

Japan Environmental North/Central America South America Europe/Middle East/Africa Asia/Oceania China
Committee Environmental Committee Environmental Committee Environmental Committee Environmental Committee Environmental Committee

Business Operations

Motorcycle Operations Automobile Operations Power Products Operations

Functional Operations

Customer Service Business Support Business Management Corporate

Operations Production Operations Purchasing Operations Operations Operations Communications Division

Green Factory
Promotion Center

Honda R&D Co., Ltd. Honda Engineering Co., Ltd.

CSR Report 2007 40

 2010 Global CO2 Emissions Reductions Targets and
FY2007 Results

scale. We’re working to further develop our

Confronting Global Warming technology to reconcile the issues of global
and Climate Change climate change and the growing demand for
mobility.
The issue of global climate change cannot be In May 2006 Honda announced voluntary
resolved solely by action at the regional level. CO2 emissions reduction targets (see below).
Honda is addressing the problem on a global

Global CO2 reduction targets for 2010 (baseline: 2000)

Automobiles Motorcycles Power Products

Product CO2 reduction targets

Global average of CO 2 emitted by all Honda
10% 10% 10%
products (per g/km) (per g/km) (per kg/h)

Production CO2 reduction targets

Global average of per-unit CO 2 emitted during
10% 20% 20%
production (per unit) (per unit) (per unit)

Target scope:
Product:
Automobiles: Japan, North America, Europe/Middle East/Africa, Asia/Oceania, China, South America (more than 90% of worldwide sales)
Motorcycles: Japan, North America, Europe, Thailand, India, China, Indonesia, Vietnam, Brazil, the Philippines, Malaysia, Pakistan (more than 90% of worldwide sales)
Power Products: All sales in all regions (marine outboards excluded)
Production:
All manufacturing by Honda Motor and 72 other Honda Group companies worldwide engaged in the assembly of vehicles and major components

FY2007 results (in progress)

Product CO2 reduction Automobiles 6.0% reduction Motorcycles 13.2% reduction*1 Power Products 6.9% reduction

(%) (%) (%)

100 100 100
100 100 100
94.0 93.1
90 90 90
90 90 86.8 90

80 80 80

70 70 70

FY2001 FY2007 2010 Targets FY2001 FY2007 2010 Targets FY2001 FY2007 2010 Targets

Production CO2 reduction Automobiles 9.5% reduction Motorcycles 29.3% reduction*2 Power Products 4.4% increase*3

(%) (%) (%)

104.4
100 100 100
100 100 100
90.5 90
90 90 90
80 80
80 80 80
70.7
70 70 70

FY2001 FY2007 2010 Targets FY2001 FY2007 2010 Targets FY2001 FY2007 2010 Targets

*1 A 13.2% reduction from 2000 has already been attained. We are striving to attain a minimum 10% reduction by 2010.
*2 Although the target has already been attained, an expansion of production is foreseen in this region, where CO2 emissions are relatively high. We are striving to maintain the reduction target level and
achieve even greater reduction by 2010.
*3 Higher, per-unit emissions in power product manufacturing can be attributed to larger and more feature-rich new products.

41 CSR Report 2007

FY2011 Targets for Japan

lowest CO2 emissions per unit of production.

FY2011 Targets for Japan As part of that initiative, in June 2007 Honda
defined targets for reducing CO2 emitted during
transportation, reducing the use of substances of
Honda has set targets for CO2 emissions concern, increasing recycling and more, for a total
reductions by FY2011 in Japan, and is striving of eight environmental impact reduction targets
to manufacture products with the lowest in-use to be attained by FY2011.
CO2 emissions at manufacturing plants with the

Reducing environmental impact: Targets for FY2011

Issue Scope Item Target Area
Automobiles 10% reduction (compared to FY2001)*1 per g/km

Products Motorcycles CO2 emissions reduction 10% reduction (compared to FY2001*1 per g/km
Worldwide
Power Products 10% reduction (compared to FY2001)*1 kg/h
Global targets
announced
Automobiles 10% reduction (compared to FY2001)*1 per unit
in 2006
Energy/
global warming Production Motorcycles CO2 emissions reduction 20% reduction (compared to FY2001)*1 per unit

Power Products 20% reduction (compared to FY2001)*1 per unit

Japan
Japan*2 CO2 emissions reduction 30% reduction (compared to FY1991)*3 Units of energy used
(announced in 1998)

Transportation*4 CO2 emissions reduction 10% reduction (baseline: FY2007) As % of revenue

Substances of concern Production VOC*5 emissions reduction 35% reduction (baseline: FY2001) Per automobile painted

Total of corporate activities*6 Landfill waste Zero waste for all facilities

New targets
Landfill waste 10% reduction (baseline:FY2001) As % of revenue Japan
Production*2 New targets for
Japan announced
Water use 30% reduction (baseline: FY2001) As % of revenue
in June 2007
Recycling
Transportation*7 Use of packaging materials 45% reduction (baseline: FY2001) As % of revenue

Automobiles ASR recycle rate 70% or more*8

Vehicle recycling
Motorcycles Recycling rate At least 95% (by FY2016)*9

*1 Targets for CO2 emissions reduction by 2010 announced in 2006 *5 Volatile organic compounds: primarily substances of concern such as organic solvents included in paints and thinners that
*2 Five Honda Motor production facilities may cause photochemical oxidation
*3 Targets for production announced in 1998 *6 The primary 48 organizations involved in manufacturing and research & development (including academic institutions and
*4 In accordance with the amendment to Japan’s Rationalization in Energy Use Law, this is the responsibility Honda Motor Co., Ltd.)
of Honda Motor Co., Ltd. as the transporting entity (transportation of completed vehicles/devices; *7 Transportation of parts and component parts sets; export of completed motorcycles
transportation of parts between facilities; parts transportation, etc.) *8 95% recycling defined as recycling of entire vehicle
*9 Scale as used in former MITI Used Automobile Recycling Initiative

Strategies for achieving targets

Item Strategy
Fuel conversion Conversion of all factories to natural gas completed (FY2007)
Introduction in all factories of high-efficiency devices (boilers, refrigerators, compressors, etc.); reduction of air pressure loss;
calibration of temperature in painting chambers; adjustment of cogeneration equipment for higher-efficiency operation;
reduction of power consumption by robots in standby mode, etc.
Energy savings Reduction of CO2 emissions at dealers through use of environmental accounting
Energy/global warming
Conversion from trucking to marine/rail transport, reduction of transport distances, improvements in fuel economy resulting in
reduction in CO2 emissions

Alternative fuels/natural Proactive introduction of Honda-designed solar panels

energy use, etc.

Substances of concern VOC Shift to water-based paints, increase in operational efficiency and reduction of losses resulting in VOC emissions
Zero landfill waste at factories and 32 manufacturing suppliers (by FY2008)
Disposal Introduction of returnable containers, conversion to simpler packaging and other means of reducing the volume of packaging materials
Recycling
Strengthening authorized recycling facilities, expansion of full recycling
Water use Recycling forging coolant, use of rainwater, etc.

Environmental strategies to be Yorii Plant (scheduled to Energy/resource consumption at world-leading levels, resulting in per-unit production CO2 emissions levels 20% lower than
implemented at new facilities begin operation in 2010) those of FY2001 (Energy/resource recycling Green Factory)

CSR Report 2007 42

 Mid-Term and Annual Targets and Results

Results of FY2007 initiatives and plans for FY2008

Major objectives Strategies FY2007 Targets

Automobiles Increase availability of Low-Emissions Vehicles Increase number of Low- and Very-Low Emissions Vehicles*1

Exhaust emissions
Motorcycles Expand implementation of fuel injection technology Implement on new models

Power Products Comply with pending regulations Comply with pending regulations
Product Automobiles Improve fuel efficiency to comply with FY2011 Japan fuel efficiency standards
development
Fuel efficiency improvements Implement technologies for better fuel efficiency Motorcycles Further improvements in fuel efficiency

Power Products Further improvements in fuel efficiency

Development of alternative Automobiles

Expand product line
energy products Power Products

Reduce substances of concern in suppliers’ parts and materials Promote supplier compliance with substances of concern guidelines

Purchasing Green Purchasing initiative Ensure suppliers reduce CO2 emissions

Promote environmental impact management by suppliers
Ensure suppliers reduce landfill waste

Promote introduction of environmental management systems by suppliers Promote ISO 14001 certification for all suppliers

24.0% reduction in per-unit energy consumption

Improve energy efficiency
CO2 emissions: 500,000 CO2 tons

Zero landfill waste Maintain zero landfill waste

Production Green Factory initiative
Recyclability rate: 99.0%
Reduce waste (byproducts)
Reduce internally incinerated waste 89.0% (baseline: FY1999)

Reduce VOC emissions VOC emissions (automobiles): 34.8 g/m2

Implementation of environmental management systems by transport partners Continuation of joint implementation with four main partners
Transportation Green Logistics initiative
Improve transportation efficiency CO2 emissions: 110,650 CO2 tons (transportation of completed automobiles)

Automobiles Promote implementation of environmental management at dealers Expansion of Eco Drive program

Sales Green Dealers initiative Motorcycles Promote implementation of environmental management at dealers Expansion of environmentally responsible Dream Dealer program

Power Products Promote environmental conservation at dealers Expansion of Green Dealer initiative (increase environmental awareness among dealers)

Increase recyclability rate

Automobiles
Reduce use of polyvinyl chlorides (PVCs)*4
Improve recyclability Increase recyclability rate
Motorcycles Increase recyclability rate

Power Products Increase recyclability rate

Recycling
Increase parts recovery, reuse and recycling Promote remanufacturing and reuse Expand range of recyclable parts and their recovery

Automobiles
Technical support for proper disposal Develop technologies for proper disposal and
Reinforce recycling operations
and recycling of end-of-life products recycling of end-of-life products Motorcycles

CO2 emissions at four office buildings: 11,326 CO2 tons

Administration Green Office initiative Promote integration of environmental impact management at offices
Waste generated at four offices buildings: 512 tons

*1 Low-Emissions Vehicles defined as having emissions 50% lower than FY2006 standards; Very-Low Emissions Vehicle defined as having emissions 75% lower than FY2006 emissions standards
*2 FY2008 target figures for CO2 and VOC emissions are higher than those for FY2007 results due to changes in business conditions and to increased production and launch of new businesses
*3 FY2008 target figures for waste recycling and internal waste disposal are lower than those for FY2007 results due to changes in business conditions and to increased production and new business expansion

Targets attained by FY2006 Summary of initiatives where targets have been attained

Attainment date Attainment date

Automobiles Conversion from CFC12 to HFC134a Late 1994 Motorcycles Eliminate use of lead in wire harnesses Late 1998
Eliminate use of sodium azide (in Japan-made cars)*1 Late 1998 Reduce use of lead in Japan-made models to less than 60g/unit (JAMA target) January 2005
Eliminate use of lead in wire harnesses*2 Late 1998 Eliminate most use of mercury in Japan-made models*4 Before 2001
By 2002 reduce emissions on all production vehicles to less than 50% of By 2005 reduce overall HC and NOx emissions by 33% (baseline: FY1996)*6 FY2001
Late 2002
Japan standards for 2000*3 By 2005 improve average fuel economy by 30% (baseline: FY1996)*6 FY2004
Reduce use of lead to 10% that of 1996 (JAMA target) May 2004 By December 2005 eliminate all use of cadmium December 2005
Eliminate most use of mercury in Japan-made models*4 By 2001 Increase recyclability rate to 90% or more FY2002
By 2005 receive certification by Japan’s Ministry of Land, Infrastructure Power Products Eliminate use of lead in wire harnesses Late 1998
and Transport as Low-Emissions Vehicles and Very-Low Emissions Vehicles FY2006
for most production vehicles*5 Reduce use of lead in Japan-made models (in accordance with JAMA guidelines) –
By 2005 reduce overall HC and NOx emissions 75% (baseline: FY1996)*3 FY2005 Eliminate most use of mercury in Japan-made models –
By 2005 comply with FY2011 emissions standards in all vehicle weight Eliminate all use of cadmium in Japan-made models –
FY2006
categories*3
By 2005 reduce overall HC and NOx emissions by 30% (baseline: FY1996)*7 FY2002
By 2005 improve average fuel efficiency 25% (baseline: FY1996)*3 FY2002
By 2005 improve average fuel efficiency by 30% (baseline: FY1996)*7 FY2006
By 2005 eliminate all use of cadmium December 2005
Production By 2001 reduce per-unit energy consumption by 15% (baseline: FY1991) March 2002
By 2000 increase recyclability rate to 90% or more FY2002
By 2001 eliminate all landfill waste July 2000

43 CSR Report 2007

 Chapter
Looking After the
Environment

FY2007 Results Status FY2008 Targets

Seven additional models (15 types) approved as Low- or Very-Low Emissions Vehicles
Further increase availability of Low- and Very-Low Emission Vehicles*1
(total: 26 models, 58 types) as per 2005 standards

Fuel injection implemented on eight models released worldwide in FY2007 Implement fuel injection on most scooters released in Japan

Compliance for all models released in Japan in FY2007 Further expand compliance

Complied with FY2011 Japanese fuel economy standards in all seven categories Further improve fuel efficiency

Improved fuel efficiency in fuel injection models Continue improving fuel efficiency

20% fuel efficiency improvement in EU55is generators Further improve fuel efficiency

Leased more fuel cell vehicles

Continue expansion of product offerings/sales
Introduction of new MCHP1.0 cogeneration model (22.5% increase in generation efficiency)

Elimination of hexavalent chromium: nearly complete

Promote compliance with substances of concern guidelines
Elimination of lead and lead alloys: near complete elimination of manufacturing with substances containing more than 0.35wt% lead.

Reduced per-unit CO2 emissions by 12% (baseline: FY2001) Ensure that suppliers reduce CO2 emissions

Reduced landfill waste 97% (baseline FY2001) Ensure that suppliers reduce landfill waste

403 suppliers (98%) certified Promote ISO 14001 certification for all suppliers

Reduced per-unit energy consumption by 29.8% (baseline: FY1991) Per-unit energy consumption reduced 25.5%*2

CO2 emissions: 463,000 CO2 tons CO2 emissions: 490,000 CO2 tons*2

Maintained zero landfill waste Maintain zero landfill waste

Waste recycling rate: 99.4% Waste recycling rate: 99.0%*3

Internally incinerated waste reduced 90.9% (baseline: FY1999) Reduce internally incinerated waste 90% or more (baseline: FY1999)

VOC emissions (automobiles): 33.0g/m2 VOC emissions (automobiles): 34.0g/m2*2

Continued implementation by four main partners Continue implementation by three main partners (two partners merged)

CO2 emissions: 104,769 CO2 tons (transportation of completed automobiles) CO2 emissions: 101,382 CO2 tons (transportation of completed automobiles)

Enhanced promotion of Eco Drive program by distributing 500,000 leaflets Expand Eco Drive program and its promotion

Launched 21 environmentally responsible Dream Dealers (total: 87) Dream Dealer network expansion

To raise awareness of Green Dealer initiative, delivered guidance on processing of end-of-life equipment and sheets for oil absorption Promote environmental preservation at dealers

Minimum 90% recyclability for all newly introduced or remodeled vehicles Minimum 90% recyclability for all newly introduced or remodeled vehicles

Automobiles: Maximum 1% chloride in ASR for all newly released or redesigned models Automobiles: Maximum 1% chloride in ASR for all newly released or redesigned models

Minimum 95% recyclability for all newly introduced or redesigned models Minimum 95% recyclability for all newly introduced or remodeled vehicles

Minimum 96.5% recyclability for all newly introduced or remodeled vehicles Strengthened recycling system

Expanded range of recycled parts and their recovery Expand range of vehicles using recycled parts

Maintain recycling systems for automobiles

Maintained recycling systems for automobiles and motorcycles Maintain recycling systems for motorcycles
To increase recycling, strengthen communications regarding plastic parts used

CO2 emissions: 11,839 CO2 tons*5 CO2 emissions for nine office buildings: 12,913 CO2 tons*6

Landfill waste generated: 291 tons*5 Reduce landfill waste generation for nine office buildings to 502 tons*6

*4 Polyvinyl chloride
*5 Total for Aoyama, Wako, Shirako, Yaesu
*6 Total for Aoyama, Wako, Shirako, Yaesu, Sapporo, Sendai, Nagoya, Osaka, Fukuoka

Targets & progress

Energy savings in production (announced in 1998)
*1 Sodium azide: Chemical symbol NaN3, this substance provides the explosive force
required to deploy automobile airbags. However, when undeployed airbags are Target Progress as of FY2007
crushed in end-of-life vehicle processing, the toxic vapors released can endanger the
Reduce per-unit energy consumption 30% by 2010
health of workers. 29.8% reduction
(baseline: 1990)
*2 Wire harnesses: Automobiles include a network of some 1,000 wires. Through the
systematic arrangement of these wires and the associated terminals and connectors,
the vehicle is made easier to assemble . Environmental impact of all Japan-made models (announced in 2005)
*3 Japan target
Target Progress as of FY2007
*4 Minimal amounts used in high-intensity discharge headlights and navigation system
screens Hexavalent chromium: Nearly complete, with the exception of certain
Automobiles
*5 By 2001 Honda had announced its intention to achieve certification for most elimination by December 2005*8 mini-cars, special-equipment vehicles
production vehicles as Japan’s Ministry of Land, Infrastructure and Transport Low-
Emissions Vehicles by 2005. However, as more demanding emissions standards were Hexavalent chromium:
Motorcycles Attained
introduced in October 2003, Honda adjusted its targets and is now striving to achieve elimination by December 2005
compliance with these new standards by achieving certification as Low-Emissions
Vehicles and Ultra-Low Emissions Vehicles. Power Hexavalent chromium: Nearly complete, with the exception of anti-
Products elimination by December 2006 corrosion treatment of marine outboards
*6 Targets apply in Japan, North America, Europe and Thailand.
*7 Worldwide targets *8 Except for some components of the S2000

CSR Report 2007 44

 Major Initiatives in FY2007

be achieved, with per-unit CO2 emissions 20%

FY2007 Initiative Case Studies lower than FY2001 levels. Taking the Green
Factory initiative to the next level, the new
plants will be designed for maximum resource
Minimizing the environmental conservation and recycling.
impact of production facilities In international operations, Guangzhou
worldwide Honda’s second auto plant, Zengcheng Factory,
Honda strives to produce the world’s cleanest which began production in September 2006,
and most efficient products from the world’s features an industry first: 100% recycling of
cleanest and most efficient water. Achieving zero emissions of wastewater,
factories. We are intensifying the facility has saved an estimated 170,000 tons
efforts at our production facilities of water.
to reduce CO2 emissions and The new US automobile plant in Greensburg,
counter global warming. In Indiana, scheduled to open in late 2008,
addition to the four natural gas will feature advanced, highly efficient
cogeneration systems already manufacturing systems. It will aim to eliminate
Natural gas cogeneration system (Kumamoto Factory)
installed at the Saitama and landfill waste and minimize the use of VOCs
Suzuka factories, a fifth system that through water-based painting, among other
began operations at Kumamoto measures. The state-of-the-art facility is
Factory in July 2006 is providing expected to achieve the lowest environmental
electrical generation efficiency of impact of any Honda automobile factory in
44%, an increase of approximately North America.
10%. In addition, the steam Honda will continue to improve
and hot water produced are environmental efficiency at all of its
used in the factory’s motorcycle manufacturing facilities worldwide, striving for
Zengcheng Factory, Guangzhou Honda painting operations, resulting in a the lowest possible environmental impact.
reduction of approximately 1,039
tons of CO2 emissions in FY2007. Entering the solar power industry—
At Tochigi Factory we next-generation thin-film solar
completed the process of panels go into production
replacing kerosene and liquid Honda has developed its own solar panels—
petroleum gas (LPG) with devices that produce electricity without
natural gas (CNG) and reduced producing any CO2. Made from CIGS—a
CO2 emissions by 1,870 tons in compound of copper, indium, gallium and
Water-based painting lines
FY2007. This completes the shift to natural selenium—Honda’s next-generation solar cells
gas at all our factories in Japan. Further, feature superior solar energy conversion and
motorcycle production will soon be shifted manufacturing efficiency. Their manufacture
from Hamamatsu to Kumamoto, consolidating
production as part of our move to improve
efficiency and further reduce CO2 emissions.
At the new automobile factory in Yorii,
Saitama Prefecture scheduled to begin
production in 2010 and the new automobile
engine factory scheduled to begin production
in 2009 in neighboring Ogawa, world-leading
levels of recycling and energy efficiency are to Honda Soltec Co., Ltd.

45 CSR Report 2007

 Chapter
Looking After the
Environment

requires only about half the energy of resources. This initiative can help dealers better
conventional crystallized silicon-based cells, manage these resources, as well as help them
reducing the CO2 emissions associated with reduce their environmental impact while also
production. reducing their costs. Motorcycle and power
With the FY2007 installation of the solar product dealers are also using the Honda
panels at the Suzuka and Tochigi factories, Environmental Register to reduce their costs
a total of 14 installations in Japan and three and environmental impact.
overseas have been so equipped.
Established in December 2006 as a wholly Home cogeneration systems and
owned subsidiary of Honda Motor Co., Ltd., solar electricity generation
Honda Soltec Co., Ltd. will begin full-scale experimental operations with
production of the integrated thin-film solar advanced Home Energy
Station begin
panels in late 2007. The new Honda subsidiary’s
plant, located on the premises of the Honda In 2003 Honda began experimental operation
Motor Kumamoto Factory, will have an annual of the Home Energy Station, which uses natural
production capacity of 27.5MW. gas to supply electricity and hot water to the
home, and a sufficient quantity of hydrogen to
A model for recycling as a power a fuel cell vehicle. Its third-generation
new business model is about 30% smaller, yet offers about
Honda Trading has taken steps to create new 25% more electrical power output and faster
environmental business by getting involved in startup than the previous model. Hydrogen
advanced recycling and other environmental storage and production capacity are both
programs. As part of this project, the company is improved by about 50% with the use of a new
setting up a model program within the Honda high-performance natural gas reformer.
Group, collecting paper and wood products In another advanced initiative, Honda has
for recycling and leading the way in resource applied its revolutionary solar panel technology
conservation. to create an experimental hydrogen station.
In April 2007 the company began collecting Developed by Honda using CIGS—a compound
pamphlets made obsolete by the introduction of copper, indium, gallium and selenium—the
of new vehicle models and other developments, thin-film integrated solar panels feature superior
providing some 35 tons of recycled paper. electricity conversion. The electricity is passed
Going forward, we will endeavor to extract through a particle electrolyte membrane to
the maximum value from used paper, felled generate hydrogen, which is then compressed
trees and other paper and wood wastes and stored for use by the fuel cell vehicle. The
generated by Honda facilities, collecting system boasts an energy efficiency of 52–54%.
and recycling them, thereby creating new
business on this model of recycling within the
organization.

Honda Environmental Register

Honda encourages dealers to reduce their
environmental impact through our Green
Dealer program. As one practical measure,
we ask automobile dealers to use the Honda
Environmental Register to record data on their The Home Energy Station and the FCX Concept fuel cell vehicle

use of electricity, water, gasoline and other

CSR Report 2007 46

 Chapter

Looking After Our

Stakeholders
The Honda philosophy is based on respect for the
individual—respecting the differences among us and
maintaining relationships based on fairness and trust. It
is also based on what our founder, Soichiro Honda, called
the Three Joys: the joys of buying, selling and creating. This
philosophy forms the foundation of our activities and is
seen in the many efforts we take to foster good relations
with our stakeholders, actively working to please them and
making conscientious efforts to minimize any potentially
negative effects our actions may have. This is how we strive
to be a company society wants to exist.

47 CSR Report 2007

Our Customers

Personalized follow-up
Our Approach to Customer Starting in October 2006, Honda instituted an
Satisfaction upgrade to its after-sales service procedures
designed to enhance customer satisfaction. For
In harmony with the Three Joys principle, Honda example, dealer representatives consult each
has always worked closely with its dealerships customer at the time of purchase as to whether
to maximize customer satisfaction. Every step they prefer to be notified by telephone or email
of the way, from marketing and sales to after- regarding scheduled vehicle maintenance.
sales service, the people at our dealerships are Through this kind of personalized service, we
focused on earning and maintaining the trust are striving to strengthen relationships with our
of our customers, always seeking to deliver customers.
genuine satisfaction.
Strengthening the customer
support functions of the Honda
Enhancing Customer C-card
Satisfaction Seeking to enhance the experience of each
customer who visits a Honda dealership in
Working to maximize lifelong Japan, Honda has introduced special member
customer satisfaction support services to enhance the Honda C-card
Honda works in close partnership with its system.
automobile dealerships to provide the warmest In addition to functioning as a credit card,
possible welcome for our customers and ensure the Honda C-card offers cash rebates, special
compliance with our policies. We make sure services accessible only to members, and a
those interested in our products are given clear charity contribution system in which Honda
explanations and a level of service that leads to donates a certain percentage of customer
genuine customer satisfaction. purchases to charity. The service began in
In April 2005 Honda and its dealers came October 1995. Some 920,000 customers were
together to define our approach to customer registered as of March 2007.
satisfaction. The result was a key principle: we Starting October 2006, newly
want to ensure that no one’s contact with us issued cards have been labeled to
is limited to a single encounter. We do our indicate Honda C-card membership
best to ensure that each customer enjoys a and the availability of enhanced
satisfying, lifelong relationship with Honda and services. Holders of these cards can
its products. have their vehicle’s maintenance
Honda C-card (with credit card function)
In March 2006 Honda integrated all history displayed at any dealership
automobile dealerships in Japan under the or via the Internet, and are able to
Honda Cars brand. All Honda automobiles are notify the Honda C-card network of
available through any Honda Cars dealership, a change of address at any time. To
making our sales network more accessible and further broaden the range of options,
enhancing customer satisfaction. the Honda C-card is now available
without credit card functionality. This
Honda C-card (without credit card function)
version can be issued on the spot.

CSR Report 2007 48

 Our Customers

• Charitable contributions in proportion to • Training dealership associates

purchases To ensure that our customers’ vehicles are
Since FY1996, Honda has contributed a repaired promptly, Honda provides personnel
fixed percentage of customer purchases at its automobile dealerships around the world
via the Honda C-card service to the with superior training and the most advanced
Japanese Red Cross and the Japan UNICEF diagnostic and repair equipment available.
Association. In 2007 Soichiro Honda once said that when we work
Honda donated on a customer’s car, we are actually working on
approximately 73.6 that customer’s feelings toward Honda. We put
million yen—0.05% of that thought into practice, ensuring that the
total FY2007 Honda C-card people who deliver Honda service understand
purchases of 147.2 billion this underlying philosophy.
yen—bringing its total
contributions to date to
Operating Officer Manabu Nishimae (left) presents a donation from 512.57 million yen.
Honda to the Japan UNICEF Association at a June 2007 ceremony

Strengthening support operations

at Honda dealerships
Honda engages in a range of dealer support
initiatives, including expert consultation services,
to enhance the quality of service offered at our
dealerships and ensure that Honda customers Honda Automobile Service Technicians’ Competition (Nov. 2006)

everywhere receive the same high level of

service. Providing dealerships with
Honda Consulting Co., Ltd. was established in feedback from surveys
FY2006 with the mission of providing associate To understand how best to serve our customers,
education. In FY2007 we strengthened its Honda conducts periodic customer satisfaction
staff and services to enhance its ability to surveys. A sample of customers is sent a survey,
provide superior management consulting for the responses are compiled and analyzed,
dealerships, including guidance on how to and suggestions for service enhancement are
recruit capable graduates and welcome them communicated to dealerships.
as new associates.
Customer satisfaction survey flow

Honda

Feedback based on
Survey response compilation and analysis
of survey data
H
Honda Cars

Customer Dealership
Service
enhancements
Conferring with customers at a dealership

49 CSR Report 2007

 Chapter
Looking After Our
Stakeholders

Innovations to facilitate call center to better respond to an increasing

appropriate product use number of calls on weekends and holidays.* * In Japan, calls are
received by operators
To help ensure that customers use our products As a result, a total of 203,003 enquiries were from 9am to 5pm, and by
a computerized answering
appropriately and safely, Honda provides a handled in FY2007—106.8% of the previous system outside these
hours.
comprehensive range of support information year’s total.
via user manuals, websites, informational Valuable information is received by our
DVDs and other media. Topics covered Customer Relations Center in the form of
include product features, user instructions and customer questions, suggestions, requests
cautionary notes. Information is presented in and complaints. It is communicated to our
an easy-to-understand format designed to help associates in research, production, service
customers get the maximum value from their and sales, then applied to the ongoing
purchase. enhancement of our operations. A system is
To ensure that safety information is properly in place to allow all directors and associates
presented and any potential hazards associated access to this information—stripped, of
with our products are communicated clearly, course, of customers’ personal information
Honda established the Hazard Communication to protect their privacy—enabling ideas for
Standard in 1991. Appropriate cautionary improvement to be gathered from inside and
labels are affixed to all Honda products sold outside the division to which the customer
worldwide in accordance with our stringent communication was originally directed.
standards.

Customer Relations Center

Web-based automobile owner’s manual (Japan market)

Looking after our customers

Customer Relations Request for

documents
Enquiry
Customer Relations
Center Activities Center
Request for Contact
directions to Customer
nearby dealer
Enhancing our customer
Product Enquiry Response
relations system malfunction report
The Customer Relations Center has a
H Honda
straightforward slogan—For the customer. Honda Cars Report
Its mission: to handle enquiries from Honda Service division
customers politely, clearly and quickly, delivering Feedback
Dealership
the same high quality in our communications as
in our products.
In FY2007 staffing was increased at our 24/7

CSR Report 2007 50

 Our Customers

Surveying customers to enhance associates, include sections on privacy policy

service quality and the handling of confidential information.
In an effort to promote quality service, in Furthermore, in response to the introduction
June 2006 Honda surveyed 400 visitors to the of Japan’s Personal Information Protection Act
Customer Relations Center enquiries section of in 2005, Honda established a privacy policy
our website to assess customer satisfaction with to ensure compliance with all applicable
the service they received. The results showed laws and regulations. Under its provisions,
86% approval. Based on such information, we personal information is not to be disclosed
continually strive to improve our handling of without the explicit permission of the person
client enquiries and optimize the quality of our concerned, strict personal information security
services. is maintained, and proper safeguards are in
Honda’s Customer Relations Center has also place to protect against unauthorized disclosure
initiated its own service quality survey to assess of information. An Information Confidentiality
the skills of the associates handling customer Committee was also created to enforce
enquiries. this policy and ensure optimal handling of
information issues. Honda is obliged to provide
The Voice of the Customer initiative written notification if any personal information
Our affiliates in Thailand and the Philippines is used in the creation of databases, or when
have adopted the model of Honda customer the collection or handling of such information is
service established in Japan, North America entrusted to an external contractor.
and Europe. They are engaged in an initiative
* An initiative designed
to enhance customer
called VOC—Voice of the Customer*—in which Working closely with dealers
satisfaction in which the
entire organization is
information gathered in handling customer to protect customers’ personal
involved on an ongoing enquiries is analyzed and suggestions for information
and systematic basis.
improvement are conveyed to appropriate Honda provides guidance to associates at
divisions. In FY2008 like- dealerships on the appropriate rules for
minded programs are handling the personal information of our
scheduled to begin in the customers. We hold seminars and distribute
rapidly expanding markets manuals to ensure that everyone is fully aware
of China and Malaysia, with of the proper procedures. To ensure vigilance
dedicated departments with respect to this important issue, dealership
handling the assignment. associates are issued information disclosure
Plans are proceeding on a prevention checklists, along with a pocket
VOC in action in Thailand similar initiative in India. manual on protecting personal information.

Protecting confidentiality:
Protecting Personal the Honda C-card
Information and Preventing To help protect confidentiality, our Honda
Disclosure of Sensitive Data C-cards do not contain any personal
information.
The development of our privacy
policy
Honda’s Conduct Guidelines, which were
enacted in 2003 to guide the actions of

51 CSR Report 2007

 Chapter
Looking After Our
Stakeholders

Founding Spirit
Column
Helping the world get things done

Along with motorcycles and automobiles, the power products

business has long been a fundamental part of our operations.
Founder Soichiro Honda watched farmers working in the 1950s
and thought, “Their work would be so much easier if they had
motorized equipment. I could make so many people happy with my
technology!” That was the dream—and the guiding principle—that
got things started.
But the agricultural equipment market in Japan in those days was
dominated by several established manufacturers. Nobody thought
a new startup could succeed. Determined to build something from
nothing, though, in 1952 Soichiro declared his resolve to make
agricultural generators, setting out to leverage his company’s
strength in compact gasoline engines. In October 1953 Honda
unveiled its first original power product: the Type H engine. From A Honda snow blower lightens the load for this snowbound country dweller
Applying innovation and advanced technology, Honda has developed a full lineup of snow
that starting point, Honda continued to take advantage of its blowers, from compact to full-sized, that anyone can operate with ease and confidence. Photo:
fundamental strength in engine technology, going on to develop the HSM1560i, a mid-sized hybrid model.
many more innovative products. Today, along with power product
engines, Honda also produces tillers, portable generators, marine
outboards, pumps, lawnmowers, snow blowers and electric carts, as
well as 4-wheel scooters, household cogeneration units, solar power
panels and a diverse range of other power products.
In May 2006 Honda Power Products Division reached a production
milestone of 70 million units. Today, Honda power products are
sold in over 150 countries and used by over six million customers.
In everything from farming to fishing, Honda power products help
people get their work done and enjoy their lives to the fullest.
Appreciated the world over, they take many different shapes and
have many different functions, but they all embody the same spirit—
the spirit of our founder, whose greatest desire was to help people
realize their dreams. This same desire defines Honda Power Products’
mission for the future. We want to put smiles on people’s faces and
help them get things done all over the world.
Our portable generators: for leisure, utility and emergency use
Honda’s first generator, released in 1965, was one of the world’s first portable generators. Meeting the
need for a light, compact, fuel-efficient, low-noise generator, Honda became the standard for a high-
quality, stable electricity supply with superior environmental performance. Photo: EU3000is A-type
low-noise generator.

Helping people get things done: Supporting marine lifestyles: Honda outboards
Soichiro Honda was determined “Moving across the surface without dirtying the water underneath.” That was the goal Honda’s
to take the company into the founder declared when the company released its first marine outboard in 1964. Honda helps
power products business. support marine lifestyles by developing and producing high-performance outboards based on
environmentally responsible, low-noise, fuel-efficient 4-stroke engines. Photo: the BF75, a mid-
The Type H engine, released in 1953 sized outboard.

CSR Report 2007 52

 Our Suppliers

fairness in our relationships, set equitable

Our Fundamental Approach conditions and use appropriate practices, always
to Suppliers respecting the independence of our suppliers
and treating them as equals in accordance with
Growth through long-term our three purchasing principles.
relationships
A single Honda automobile is made of 20,000 Evaluating and selecting
to 30,000 parts. Manufacturing our automobiles suppliers fairly
and other products depends on close In striving for growth through long-term
cooperation with our business partners who relationships, Honda’s purchasing division
supply the necessary parts and materials. As our takes care to provide equal opportunity to any
manufacturing base has expanded globally, the supplier who seeks to do business with us.
trust-based relationships we have established We choose suppliers via fair processes while
with thousands of suppliers around the world respecting their independence and treating
have become crucial to maintaining stable them as equals.
production and fulfilling our commitment to When purchasing parts and materials,
the continuing enhancement of quality and we select a business partner by impartially
advanced product functionality. comparing and evaluating various candidates
Recognizing the importance of our based on technological strength, product
relationship with our suppliers, Honda quality, timeliness of delivery, cost, financial
is building long-term relationships and state, regulatory compliance, environmental
growing hand-in-hand with our business record, handling of confidential information and
partners. other factors. Contracts with suppliers are based
on requirements of compliance with prevailing
laws and regulations.
Purchasing
Rules and guidelines for fair
procurement
Building trust on the basis of three To ensure fairness in our transactions with
purchasing principles suppliers, our Conduct Guidelines explicitly
Seeking to foster the trust of our business prohibit associates from inappropriately
partners worldwide, we take care to respect exercising their position or authority to exact or
all prevailing laws and regulations, maintain provide improper benefits in their relations with
our business partners.
Our purchasing guidelines The Honda Purchasing Division provides
Our objective: to foster long-term relationships through the timely orientation sessions for all newly hired
procurement of fine goods at reasonable prices.
associates to ensure compliance with anti-
Our three purchasing principles trust laws, Japan’s revised Act Against Delay
1. Procurement based on free competition
• Through free competition, we will build greater global competitiveness.
in Payment of Subcontract Proceeds to
• We will open our doors to all suppliers around the world. Subcontractors Law and other laws. Periodically,
• We will seek to realize stable procurement of quality goods in the right volumes, at the
right times and at the right price. and whenever this or other relevant laws are
2. Treating all suppliers equally amended, the Purchasing Division arranges
• We will treat all suppliers as our equals, regardless of their size. orientation sessions to ensure that associates
3. Respecting the independence of suppliers are fully aware of our legal obligations. In June
• We will respect the independence, policies, technology and expertise of our suppliers.
• We expect suppliers to compete vigorously and choose their own business path.
2006 sessions were held to explain prohibitions
on insider trading.

53 CSR Report 2007

 Chapter
Looking After Our
Stakeholders

Making purchasing policy experts must work closely with our suppliers
transparent right from the initial stages of product
As part of our effort to ensure transparency in development, exchanging opinions and
purchasing, we hold annual meetings with our information to enhance safety, functionality,
suppliers to optimize procurement QCD (quality, environmental performance and other
cost and delivery). At a March 2007 meeting factors. For example, representatives from the
in Japan attended by some 270 firms, Honda purchasing department visit suppliers’ factories
and its suppliers reaffirmed policies aimed at and inspect production processes to ensure
strengthening our production capacity through that our need for a stable supply of high quality
the reinforcement of local manufacturing and products at a reasonable cost is fully satisfied.
procurement and through rapid international Honda will continue to work closely with its
communications. This was done to help suppliers to further enhance QCD and provide
maintain stable product quality and supply our customers with a level of satisfaction that
in all motorcycle, automobile and power exceeds their expectations.
product operations. Holding purchasing policy
conferences in various countries, we’re making Promoting environmentally
every effort to clearly communicate how responsible procurement
our policies and strategies are to be applied Seeking to take an environmentally responsible
everywhere we do business. approach to procurement of parts and materials,
We also hold New Year’s awards ceremonies Honda established Green Purchasing Guidelines
and celebrations with suppliers who have made in December 2001. By sharing information on
particularly significant contributions to QCD in parameters and targets with our suppliers,
their area. In FY2007, 50 firms received awards in we’re collectively improving our environmental
Japan. performance.
We have nearly achieved our objective of
eliminating the use of lead, mercury, hexavalent
chromium and cadmium—heavy metals
viewed as substances of concern—in our
automobile, motorcycle and power product
manufacturing.
Using Honda’s Life Cycle Assessment (LCA)
* Honda’s LCA system
system*, we are working with our suppliers to is used to quantitatively
Awards ceremony at suppliers’ banquet assess the environmental impact of each stage assess the environmental
impact associated with
of the manufacturing process, and to reduce its business operations,
including motorcycle,
CO2 emissions and landfill waste. automobile and power
Cooperative Ventures with To promote the establishment of
product manufacturing,
from production through
Suppliers environmental management systems, we are
disposal.

supporting our suppliers’ efforts to acquire

Enhancing quality in partnership ISO 14001 environmental management
with our suppliers certification. We’re pleased to say that 98% of
Faced with increasingly diverse customer needs our suppliers in Japan—a total of 403 firms—
and rising expectations of product quality, have been certified as of March 2007.
Honda depends on its strong partnerships We also hold Green Conferences to
with suppliers to deliver products with superior share information on better environmental
QCD. To ensure that high product quality is management and help reduce the impact of
maintained, Honda’s R&D and purchasing our activities on the environment.

CSR Report 2007 54

 Our Associates*

* The data displayed on

pages 55-61 represents
of mutual trust and fairness in which our
aggregate values for Fundamental Personnel associates are able to realize their potential
Honda Motor and three
main affiliates: Honda R&D, Policy and share in the joy of creating new value for
Honda Engineering and
Honda Access. society.
In accordance with the emphasis on Our goal is to maintain organizational
independence, fairness and trust that emerges structures and personnel policies in areas
from our basic principle of respect for the such as recruitment, training, evaluation
individual, Honda believes that human beings and assignments that foster a free and open
are born to think, create and express their atmosphere, encouraging each associate
individuality, thus realizing their hopes and to face new challenges and achieve new
dreams. successes. We seek to create an environment
We strive to attract individuals who share in which each person’s ambitions, abilities and
this belief and who will respect each other’s potential can be fully developed.
individuality. We seek to foster an atmosphere

Three principles of personnel management

1. Respecting independence
Honda expects associates to express their individuality and independence. As our founder said, “He who
knows best should speak up, and he who can do best should act.” In that spirit, today’s associates are
encouraged to think for themselves, take action and accept responsibility. Associates interested in earning
new qualifications are expected to volunteer to take on the challenge. Anyone with ideas and proposals
is expected to express them. In all things, the independence and ambitions of individual associates are
accorded respect.

2. Ensuring fairness
Honda offers a simple compensation system with the same fair rewards for anyone with similar abilities
handling similar work with similar results, without regard for race or nationality or gender, making no
distinctions on the basis of educational associations or career history, and objectively assessing each
person’s individual strengths and aptitudes. Honda is careful to handle appointments and personnel
deployment issues fairly and in a manner appropriate to the individual’s abilities and aptitudes.

3. Fostering mutual trust

Honda believes that the building of the foundation of trust that binds the company and the employee
starts with tolerance and mutual respect.

Honda’s fundamental personnel policy

Independence Fairness Trust

• “He who knows best should speak • Equal opportunity • Company and associates
up” • Free competition—ability and • Between associates
• “He who can do best should act” achievement are basic • Company and labor unions
• Unrestrained self-expression prerequisites

Challenge Equal opportunity Sincerity

55 CSR Report 2007

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Looking After Our
Stakeholders

employment at our affiliates, Honda Sun, Honda

Ensuring Diversity in Sun R&D and Kibounosato Honda. We strive
Employment to create environments that allow those with
disabilities to work alongside those without
Human rights education disabilities, and to make adaptations to ensure
When an individual first enters the company that workplaces and opportunities are fully
or is promoted to a higher position, he or she accessible.
receives educational guidance on human rights Employment of individuals with disabilities
based on Honda’s basic principle of respect for at Honda factories in Japan currently stands at
the individual. some 2.21%, well above the legally prescribed
level of 1.8%.
Hiring based on individual merit
Even in the days when Japanese corporations Designated affiliates
tended to favor employing only graduates of a Company name Established Operations

few elite educational institutions, Honda had an Honda Sun Co., Ltd. 1981 Manufacturing of components for motorcycles, automobiles and
power products (speedometers, glove compartments, etc.)
open-door employment policy, hiring the most Assembly of pistons, case covers, knuckles and other
Kibounosato Honda Co., Ltd. 1985 automobile components
capable and motivated individuals available.
Research and development of CAD design: transportation and
In addition to hiring new graduates, we also Honda Sun R&D Co., Ltd. 1992 rehabilitation equipment
welcome talented individuals in mid-career,
enriching the company with a diverse mix of Employment of individuals with disabilities* * Laws governing the
employment of people
personalities and experience. (%) with disabilities stipulate
that employment of one
Beginning in July 2007, Honda instituted 1,000 942 935 952 979 3 individual with a serious
912
disability is equivalent
a policy of encouraging associates who left 800
2.21 to employing two
600
2.19 2.29 2.15 2.17 2 less severely disabled
the company to care for a family member or individuals. Data depicted
400 in the graph is current as
accompany a transferred spouse to reapply 1
of June 1 of each year.
200
when it becomes possible for them to return. 2002 2003 2004 2005 2006 (year)

Number of individuals Percentage of employment

Hiring of new graduates (year)
2003 2004 2005 2006 2007 Rehiring retirees
Men 645 701 744 806 1,084 In view of dwindling birth rates, the need to
Women 127 107 111 121 170 reinforce the social insurance system in Japan,
Total 772 808 855 927 1,254
and the importance of passing on the technical
expertise crucial to the functioning of the
workplace, since April 2003 Honda has had in
Hiring of people in mid-career (FY)
place policies to create opportunities for those
2004 2005 2006 2007 2008 (plan)
associates who reach the retirement age of 60—
Men 96 91 241 551 −
even before the introduction of laws governing
Women 5 16 15 22 −
the employment of retired individuals.
Total 101 107 256 573 810

Re-employment of retirees (FY)

Employment of people with 2004 2005 2006 2007
disabilities Requested by associate 120 91 68 120
Honda provides jobs to people with disabilities
Requested by company 16 13 8 23
at its facilities in Japan in an effort to expand
Total associates 136 104 76 143
their employment opportunities. We also offer

CSR Report 2007 56

 Our Associates

content and aptitude levels of each specialty and

Developing People’s Abilities occupational grade, with specific targets for the
development of job performance, specialized
knowledge and ability in each area. The results
An approach based on of these programs provide a way to check the
on-the-job training specialized skills and managerial capabilities
Honda’s approach to personnel education of individual associates, while also helping
is based on on-the-job training: building supervisors assess and foster the aptitudes of the
specialized skills and professional capacity associates they manage.
through direct experience. To supplement these on-the-job training
Seeking to promote truly effective on-the-job programs, Honda also offers off-the-job training
training, Honda has designed programs finely designed to provide associates opportunities
tuned to match the technical and technological to develop specialized skills and enhance their

Basic approach to personnel training

Providing opportunities for associates to display and develop abilities
• Assigning and accepting proposals for new roles

On-the-chance training
Basic approach to training

Opportunities for education and

growth outside the workplace
• NH Circles/proposals for Self-improvement Job (workplace) On-the-job training
improvement
• Language learning/distance
education Gaining knowledge and expertise through
• Inter-industry exchanges Acquiring new knowledge experience
Off-the-job training
and expertise outside the • On-the-job training program
workplace
• Special interest training groups
• Training programs

Off-the-job training at Honda—an overview Company-wide program Facility-specific program

Qualification Selection Specialization Career development Skill development Management training

Executive Chief Senior management training

Engineer
Management

Senior management skills development course

Manager
Honda management school
Senior Staff
Engineer Middle management training
Special
Chief Engineer
interest
Management certification training
(Lecturer)
Life planning seminars

Open
Senior Engineer Junior management skills development course
college
Staff Engineer
Assistant Manager
Language Training for Assistant Chief Staff Engineer rank
Assistant Chief KT
education Engineer rank certification training
Engineer (Kepner-Tregoe)
Methods
Distance
Engineering Training for Engineering
education TQM
General

Coordinator Special Coordinator rank (Total Quality

Administrative interest Management)
Improvement NH
Coordinator Honda Fundamental Course
Quality proposals Circles
Engineer (Advanced) training
Specialized
Technician skills training Health and safety
Honda Fundamental Course
Engineering Staff education
(Basic)

Staff Entry-level training

57 CSR Report 2007

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Looking After Our
Stakeholders

careers by developing new skills or management own personal strengths and aptitudes, while
abilities. at the same time clarifying their everyday work
To support associates who wish to take the objectives based on a vision of the future. Honda
initiative to learn new skills, acquire knowledge has established this system to systematically
and cultivate themselves in order to fully realize support associates in their own efforts to grow
their own potential, we also offer opportunities and develop.
for language learning, distance education and
inter-industry exchanges. • Our Challenger Recruiting Program
Honda’s Challenger Recruiting Program spurs
• Principal off-the-job training programs associates to set and attain their own goals.
At Honda, we match a combination of on-the- With the aim of increasing their motivation and
job and off-the-job training to our associates’ helping them realize their potential, campaigns
aptitudes and aspirations in an effort to help are conducted twice yearly to give associates
them improve their abilities. Our off-the-job the opportunity to apply for new positions.
training program is divided into three main Since its inception in September 2005, the
areas, with separate training programs for each program has helped 303 associates take on
level. challenging new assignments.
1. Self-improvement training (career development)
2. Work performance training (skill development) Evaluations based on dialogue
3. Collaboration training (management training) Honda emphasizes two-way communication
as the key to associate evaluation. Provisions
Motivational programs that are made for at least three meetings per
encourage independence year between each associate and his or her
• Honda’s self-expression system supervisor.
Under Honda’s self-expression system, associates Conferences are held with individual
meet with their supervisors once a year to discuss associates each April to determine their
what work they would like to do or what section assignments in accordance with divisional
they would like to join, based on their own objectives. In June and again in December,
experience, abilities, talents and independent the supervisor evaluates the associate’s work
studies. By consulting with their supervisors for the preceding six months, explains the
and expressing their ambitions for the future, evaluation and offers specific suggestions
associates are able to better understand their for improvement. During these meetings,

Founding Spirit
Column
Fostering talent through motor sports
In 1954, when Honda was still selling motorized bicycles, founder Soichiro Honda
audaciously declared the company’s intention to participate in the Isle of Man TT Races.
Only six years later Honda captured first place. The company then turned its attention to
Formula One, completing an F1-ready racetrack in Suzuka in 1962 before launching its
F1 challenge two years later, in 1964. By 1965 the upstart automobile manufacturer had
already won its first Grand Prix race. The initiative shown by Soichiro Honda, who was
determined to take his company to the pinnacle of world motor sports, lives on. Today 1955: Honda’s first team to enter 2007: In MotoGP, Honda’s
the Mount Asama Volcano tradition of using motor sports to
Honda is active in F1, MotoGP, IndyCar and many other motor sports activities. The Motorcycle Race. Honda’s train engineers continues.
fierce competition of motor sports gives many young Honda engineers the chance to laboratory on wheels was off to a
fast start.
improve their skills and teamwork. It also gives these young individuals the opportunity
to show the initiative that has always driven the company to the top—to taste the spirit of challenge that built Honda. For us, motor sports
is a laboratory on wheels where engineers learn to overcome problems—in a battle against time, and always grow in the process. Personal
initiative is in our DNA, and it’s the source of our creativity.

CSR Report 2007 58

 Our Associates

associates and supervisors discuss appropriate company. The abbreviation “NH” stands for
steps for career development. “Now, Next and New Honda”. It’s all about
taking new steps now toward creating the next
Independent associate initiatives great Honda improvement.
• Improvement suggestion system Based on the principle of respect for the
Honda has a system for encouraging all individual, and cherishing independence,
associates to make proposals as to how the fairness and trust, NH Circle participants strive
company’s work could be improved, whether to make their working environment even more
in large ways or small. This is one way Honda positive. The strengths and initiative of each
seeks to encourage independence of spirit and associate are utilized to full advantage to realize
innovation, fostering the growth and refinement everyone’s unlimited potential and help the
of skills and capabilities. Each year, some 100,000 company improve and grow.
suggestions are received, and some 90% of them Each year six regional contests are held. Every
are implemented. From the time the system was second year, the NH Circle World Convention
implemented in 1953 to July 2006, approximately provides an opportunity for global exchange
eight million suggestions were contributed. and education, while also giving everyone a
chance to recognize the achievements of the
Suggestions for improvement received winning teams from each regional contest.
(suggestions) Since the program began in 1973, it has
200,000 steadily grown. As of March 2006, there were
162,368
150,000 136,088 144,684
151,687 143,228 NH Circles in 31 countries.
113,778 Including suppliers, affiliates and dealers,
100,000
19,776 NH Circles were active in FY2007,
50,000 involving some 144,856 individuals.
The 2008 NH Circle World Convention will be
2002 2003 2004 2005 2006 2007 (FY)
held in Guangzhou, China.

• NH Circle activities
In NH Circle activities, associates take the
initiative to get together to discover ways to
improve their work, their workplace and their

NH Circle participation
(circles) (individuals)

20,000 150,000

NH Circle World Convention held in the United Kingdom (November 2006)

120,000
15,000

90,000
10,000
60,000

5,000
30,000

1979 1986 1991 1996 2001 2007 (FY)

circles individuals

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Looking After Our
Stakeholders

Keeping everyone healthy

Building Healthy Working Honda offers ongoing, comprehensive health
Environments promotion plans to encourage associates to
stay healthy and avoid lifestyle-related illnesses.
Keeping working hours reasonable Associates are offered many opportunities
& ensuring adequate vacations for regular exercise, an important means of
Honda has always been an industry leader in maintaining good health. We also offer various
introducing shorter workweeks. We instituted forms of health management to help ensure
a five-day workweek in 1972. Other initiatives that associates do not damage their health
enjoyed by associates for more than 30 through overwork. Supervisors are trained
years include the banning of overtime on to detect and help prevent mental health
Wednesdays and some Fridays, and the problems, while associates are provided
introduction of a policy encouraging all access to counselors for guidance on health
associates to use their full vacation allotments. issues. Other forms of health guidance are also
As a result, regular working hours in FY2007 provided.
averaged 1,968 per associate and total
working hours averaged 2,018. In the same Understanding the associate’s
year, associates averaged 18.56 paid vacation perspective
days, which puts Honda in the top tier of the As part of our effort to promote a positive
automobile industry. working environment, every three years we
survey all associates on how they feel about
Balancing work and family life their work and working environment. The
In accordance with Japan’s introduction of surveys cover a broad range of issues of concern
new laws governing parental leave, Honda to associates, and the results are applied to
submitted a two-year plan to the Ministry of enhance personnel management and the
Health, Labor and Welfare in April 2005. working environment.
Under this plan, Honda revised its parental
leave policy in FY2007. Under the previous Keeping doors open
system, a parent could take leave until his or her • Making sure everyone has someone
child was 18 months old. Taking into account to talk to
the timing of children’s admittance into day- To help make sure everyone at Honda has a
care institutions, the new system allows parental happy and positive working experience, Honda
leave to be extended until the April after the staffs the health centers at its facilities with
year the child reaches the age of three. The professional counselors.
provisions for exemptions from overtime have
also been revised. Previously they applied until • Sexual harassment policy
the child reached the age of three; now they To help prevent sexual harassment—and
apply until the child enters elementary school. ensure swift and appropriate resolution should
Honda will continue to strive to provide it occur—since 1999 Honda has provided
working environments that help associates clear channels through which associates are
strike a balance between work and family life, empowered to report and discuss any incidents
encouraging everyone to realize their dreams, of sexual harassment or related concerns.
take initiatives to achieve personal goals and
pursue the careers they desire. • Retirement planning seminars
To help associates plan for retirement, Honda

CSR Report 2007 60

 Our Associates

offers life-planning seminars focusing on issues We strive to ensure workplace safety, as well
such as health maintenance, finances and active as traffic safety for associates on their way to
living. work. Honda is clearly defining its principles and
practices and striving to be a world leader in the
• Protecting personal information area of occupational health and safety.
To protect associates’ personal information, In FY2007 we strengthened measures to
Honda has implemented a comprehensive ensure workplace safety, focusing on preventing
information and privacy policy. accidents in the workplace, reducing the risk
of fire caused by explosions and avoiding
An active labor union occupational illness. We’re setting the bar high
Honda has a collective agreement with on workplace safety and applying the entire
the Honda Motor Workers’ Union. The organization’s resources to achieve the goal of
company and union have enjoyed cordial, good health for all.
mutually supportive relations, engaging
regularly in frank exchanges on key issues Occupational health and safety promotion system
such as occupational health, safety, and
President
the maintenance and improvement of
employment conditions and labor stability. Director responsible
for health and safety
In collective bargaining and discussions at
the labor-management committee, both Health and Mechanical
Equipment
Safety Oversight Safety Standards
sides strive to appreciate the other‘s positions Committee Committee

and approaches with regard to production Equipment Safety Health and Safety
and Reliability Managing director
Supervisors’
and sales activities. Differences of opinion Committee Personnel manager
Associates’ Committee
Health and Safety
are respected. Both sides work together to Management Center
Health Management
Center Directors’
overcome challenges, strengthen bonds of Ergonomics
Committee Committee
trust and increase mutual understanding.
Company and union have cooperated
in a manner worthy of Honda to create Workplace Workplace Workplace

and maintain a strong foundation for

the development of positive working • Health and Safety Oversight Committee
Checks to ensure that all health and safety policies are being implemented
environments and growth for all. in workplaces throughout the company in accordance with predetermined
rules and guidelines, and reports these results to the director responsible, the
occupational oversight committee, and the person responsible for overall
health and safety in the workplace.
• Equipment Safety and Reliability Committee
Occupational Health and In addition to verifying the safety of new or modified equipment prior to use,
this committee also has specialists check to confirm that existing equipment is
Safety being maintained according to the rules, and then reports these results to the
Health and Safety Management Center.
• Mechanical Equipment Safety Standards Committee
Establishes and revises equipment safety standards in accordance with legal
Occupational health and safety: requirements and other related standards.

our fundamental approach • Health and Safety Supervisors’ Committee

Deliberates on activities pertaining to overall occupational health and safety,
In the spirit of our founder’s words, “No safety, including disaster prevention, traffic safety and health management, and
determines specific policies.
no production,” and in accordance with the • Health Management Center Directors’ Committee
principle of respect for the individual, Honda Company physicians meet to deliberate and determine policies concerning
physical examinations, health maintenance and improvement policies,
considers the safety and well being of all compliance with legal reforms, and corporate inquiries.
• Ergonomics Committee
associates among its principal responsibilities. Examines and determines policies for preventing musculoskeletal and other
injuries due to work-related stress.

61 CSR Report 2007

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Looking After Our

Our Shareholders and Investors Stakeholders

being listed on the Tokyo Stock Exchange in

Investor Relations Activities: 1957, the shares were listed on all national
Our Fundamental Approach exchanges in Japan. Overseas, the company
issued American Depositary Receipts (ADRs) in
Honda strives to increase its corporate value 1962 and, in 1977, the ADRs were listed on the
and carry out its operations from a global New York Stock Exchange. Honda shares were
perspective. Our investor relations activities listed on major exchanges worldwide: in 1981 on
focus on the dissemination of information the London Stock Exchange; in 1983 on the
directed at shareholders and investors, not only Swiss Stock Exchange; and in 1985 on the Paris
to disclose appropriate corporate performance Stock Exchange (now known as Euronext Paris).
and financial information, but also to accurately As stock exchanges and investors worldwide
inform them in an open and timely manner embraced increasingly "borderless" financial
of our advanced initiatives in such vital areas transactions, Honda is in the process of
as environmental technology and future withdrawing from the Swiss Stock Exchange
operating strategies. We also work to promote and Euronext Paris. (As at July 2007.)
close dialogue, maximum understanding and
mutual communication in our relations with
shareholders and investors through general Profit Distribution Policy
shareholders’ meetings, investor seminars and
other activities. By building and maintaining
an atmosphere of trust and respect, we hope With respect to the redistribution of corporate
to persuade more people to become Honda profits to shareholders—one of the most
shareholders, and to encourage existing important management issues—Honda’s basic
shareholders to maintain their ownership of our policy for dividends is to make distributions after
shares over the long term. taking into account our long-term consolidated
earnings performance. Honda will also acquire
its own shares at optimal times with the goal of
Honda’s History on Stock improving the efficiency and dynamism of the
Exchanges company’s capital structure. The present goal is
to maintain a shareholder return ratio (dividends
Established in 1948, Honda Motor Co., Ltd. + share buyback) of approximately 30%.
began offering its shares on the Tokyo
over-the-counter stock market in 1954. After Dividends per share: trend
(units: yen) (%)

Shareholder returns 100 1.63 1.5

(units: billion yen) (%) 1.21
30.1 30.0 1.37
29.4 80
200 28.5 30
0.88 1.0
25 60 0.81
22.0
150 52.1 100
77.0 20 40
65 67 0.5
100 84.1 15
95.3 20 42
32
122.2 10
56.5
50 91.6 * On July 1, 2006, Honda
2003 2004 2005 2006 2007* (FY)
60.4 5 executed a 2-for-1 share
30.9 39.8 Dividends per share Dividend yield split

2003 2004 2005 2006 2007 (FY)

Buyback Dividends Shareholder returns

CSR Report 2007 62

 Our Shareholders and Investors

be found at the Investor Relations section of

Major Initiatives in FY2007 the Honda Worldwide website (http://world.
honda.com), which also contains news on the
corporation’s global business development and
Honda investor relations today other informative documents.
As a law-abiding corporate citizen, Honda Honda strives to encourage investment by
always maintains good communications individuals. To make our shares more accessible
with shareholders and investors worldwide. to private investors, a share split was executed
This is accomplished by publishing accurate on July 1, 2006. A dividend was also issued in
information that is useful for investment the third quarter of FY2007 in an effort to share
decisions as it becomes available, and by profits with shareholders as expeditiously as
representing the company’s operations and possible. A sell-off of Honda shares held by the
financial situation in a clear, factual manner. Banks’ Shareholding Purchasing Corporation
To fulfill these objectives, in addition to an was implemented in March 2007 to further
annual report, we publish quarterly reports and encourage investment by individuals. As of
a shareholders’ bulletin. We also hold quarterly March 31, 2007, these measures resulted in
meetings with representatives of the media, an increase of individual shareholders to over
analysts and institutional investors. On the day 180,000—three times what it had been a year
our financial results are released, teleconferences before.
are held with overseas investors. We also hold
quarterly meetings for principal overseas Number of Honda shareholders
investors in Europe (shareholders)

200,000
and North America to 185,397
present our financial
15,0000
position and future
management plans.
100,000
These publications
60,603 59,564 58,364
and reports, as well 49,327
50,000
as presentation
materials from
2003 2004 2005 2006 2007 (FY)
financial results
To broaden understanding of its operations, Honda invites analysts and
investors to its annual year-end presidential address (last held December meetings, can
2006)

Annual Report Semi Annual Report Quarterly Report

Investor relations website content

63 CSR Report 2007

 Chapter
Looking After Our
Stakeholders

Communicating with shareholders Maintaining open dialogue with

Honda considers the annual Ordinary General shareholders
Meeting of Shareholders a vital opportunity Honda strives to promote a clear understanding
to optimize communications with all of our of its activities—not only among current
shareholders. We strive to present all company shareholders, but also among potential
information as clearly as possible, often investors as well. Investor relations must be a
employing illustrations and video, and fielding two-way street: in order to avoid engaging in
the broadest possible range of questions and one-sided PR, we consider it essential to listen
opinions. Displays of Honda automobiles, carefully and act proactively on the basis of
motorcycles and power products provide an what the markets are saying.
opportunity for shareholders to examine our Seeking to facilitate dialogue between
products firsthand. Naturally, ASIMO is sure to the company, its shareholders and other
be there as well. To facilitate the participation investors, Honda participated in the Tokyo
of shareholders who are unable to attend in Investor Relations Panel hosted by the
person, Honda has provided for Internet-based Japan Investor Relations Association (JIRA)
voting via computer or portable telephone in November 2006. On that occasion, Honda
since 2003, as well as for absentee voting by representatives explained the company’s
postal mail. We ensure that comprehensive dividend policy and approach to providing
documentation is distributed. shareholder returns, and presented our
In many different ways, Honda invites strategy for the future before responding to
shareholders to have a close look at what goes enquiries from participants.
on inside of Honda, in the hope of enhancing
understanding. For example, company visits
by interested shareholders are held each
autumn, giving us a chance to provide factory
tours, presentations and question-and-answer
sessions led by Honda directors.

Participating in the Japan Investor Relations Association’s Tokyo Investor Relations Panel in November 2006

Shareholders on a factory tour (November 2006, Saitama Factory)

CSR Report 2007 64

 Chapter

Looking After
Communities
Since the company’s foundation, Honda’s philanthrophic
initiatives have helped nurture ties with communities hosting
its operations. As its operations expanded and globalized in
the 1970s, Honda began to establish trusts and foundations
to support a broad range of research, educational and cultural
exchange activities. In 2006 Honda defined the basic principles
and policy that govern its philanthropic initiatives, focusing
its resources on education, environmental conservation and
the promotion of driving safety. Today, our philanthropic
initiatives are progressing worldwide.
Web For more information on our philanthropic initiatives,
please visit us at
http://world.honda.com/community/

65 CSR Report 2007

The Purpose of Honda Philanthropy

company’s foundation, while seeking to

Our Fundamental Approach share joy with people around the world and
striving to be a company society wants to
exist, we established the Honda Philanthropy
Since the company’s foundation, Honda Office and defined basic principles to guide
has sought to contribute to society by its work. Honda is taking a global viewpoint in
creating quality products and technologies. responding to expectations and proactively
Honda’s fundamental approach is to seek contributing to the development of individuals
harmonious coexistence with, and contribute and societies.
to the well-being of the communities that In 2006 we further defined the global
host its operations. In the 1960s, we began directions of our philanthropic initiatives,
nurturing ties with local communities through introducing a new logo to strengthen their
philanthropic initiatives. In the late 1970s, we identity. Putting to work a corporate culture
began to establish trusts and foundations to that grew out of respect for the individual,
support a broad range of research, educational Honda is applying its resources—in the form
and cultural exchange activities. In Japan and of people, products and technologies—to its
worldwide, Honda has worked proactively to philanthropic efforts. We’re pursuing our goal
expand the scope and deepen the impact of its to share happiness with people worldwide ever
philanthropic initiatives. more proactively. Clearly defined in three key
In 1998, on the 50th anniversary of the points, our philanthropy is growing worldwide.

Honda Philanthropy – Vision

Honda enriches the joy of sharing with people around the world through socially
responsible activities in accordance with the Honda philosophy of respect for the
individual and the Three Joys. Ultimately, it is our desire that society will want Honda
to exist in every community.

Honda Philanthropy – Basic Principles

• As a company with a global viewpoint, we are dedicated to contributing to the well-
being of local communities around the world through our products and technologies.
• As a good corporate citizen, we will deepen our commitment to all local communities
where we do business.
• We will contribute to the nurturing of a society where caring and energetic individuals
actively participate in socially responsible activities.

Global Directions
Striving to create a future society in which everyone can pursue
their dreams, Honda shall:
• Support educating our youth for the future
• Work to preserve global environments
• Promote traffic safety through education and training

Designed to help create a future full of dreams, this symbol captures the spirit of the
Honda Group’s philanthropic activities throughout the world.

CSR Report 2007 66

 FY2007 Honda Philanthropy: Highlights

Environmental Conservation
Educational Initiatives Initiatives

Children build the future, and we want to foster Honda is proactive in environmental
their dreams and creativity. Honda is engaged conservation. From research and development
in initiatives that convey to children the joy and to production and purchasing, from distribution,
wonder of daring to dream, and then turning sales and recycling to the operation of office
their dreams into reality. Through a variety of facilities, we’re making the environment a
stimulating and constructive initiatives for pre- priority throughout the life cycle of our products
school to university-age youth, we’re helping and in every aspect of our operations.
young people develop the power to dream One of Honda’s first steps in environmental
and create. We will continue to work to provide conservation was the beginning of the
youth with opportunities to discover how Community Forest initiative in 1976. Since then,
much fun learning new things and challenging the company’s efforts to keep things clean and
themselves can be. We want young people to green around its facilities and coexist with local
realize their full, individual potential. communities have expanded throughout the
world.
5th Children’s Idea Contest
In the Children’s Idea Contest, which started The Beach Clean-Up Project
in 2002, entrants are asked to draw a picture In Japan and around the world the problem of
of something they imagine would be really seashore pollution is getting worse. Trash left
cool, and send it to us. In 2006, for the fifth on the beach or dumped into the ocean finds
such contest, 3,414 entries were received from its way ashore onto beaches worldwide. Much
elementary school children all over Japan. A of it is non-biodegradable plastic, which can
panel of judges selected the top entries, which cause injuries to people, harm fish and birds
were created by 33 groups of students (a total that ingest it, and have other negative impacts
of 40 children). The children were then invited on ecosystems.
to make models of their ideas and present them Seeking to alleviate this problem and return
for final review before a large audience, and beaches to their natural condition, a caravan of
13 prizewinners were selected. The Children’s current and retired Honda associate volunteers
Idea Contest is now a cultural exchange: this began a new environmental conservation
year, for the first time, initiative in May 2006. Working with municipal
prizewinners from the authorities, the volunteers began cleaning up at
Honda ASIMO Super beaches with a light, compact, simple, easy-to-
Idea Contest in Thailand
were invited to attend
the final review and
participate in games
with their new Japanese
friends.

5th Children’s Idea Contest

The Honda Beach Cleaner in action at Tsuzumigaura beach,

Mie Prefecture (October 2006)

67 CSR Report 2007

 Chapter
Looking After
Communities

use and towable Beach Cleaner. In the first year Fuel cell vehicle classes
of the Beach Clean-Up Project in FY2007, the What’s global warming? What’s a fuel cell
caravan of volunteers cleaned litter at 19 beaches vehicle? To give easy-to-understand answers
in Japan. to these and other questions that children
In response to requests, starting in FY2008 may ask, Honda holds fuel cell vehicle classes
the initiative is expanding beyond the volunteer at the Welcome Plaza showroom at its Tokyo
caravan, as Beach Cleaner and Honda ATV sets headquarters ten Sundays per year.
are being loaned to qualified municipalities. The presentations, given by members of
the Honda R&D fuel cell vehicle development
team, feature a picture book-style computer
slideshow, as well as live demonstrations of
electrolysis and tiny fuel cell vehicles. The
kids get a chance to ride in a real-life Honda
FCX fuel cell vehicle and experience the
vehicle’s smooth acceleration for themselves.
At intervals, they’re given fun quizzes to test
their understanding and encourage them
to experience the joy of learning. At the end
of class, each child
is given a certificate
that includes their
own picture to
commemorate their
participation. Their
The Honda Beach Clean-Up Project in action at Tsuzumigaura beach, earnest looks are
Mie Prefecture (October 2006)
ample evidence of
VOICE
the program’s ability
Volunteer’s perspective to stimulate interest
in environmental FCX test drive (January 2007)
I participated in a clean-up
at the beach on Iki Island questions.
in Nagasaki Prefecture
in November 2006, and
then again in May 2007
in Kochi Prefecture. We
soon realized that the
sand and litter were very
different from location to Akira Yamazaki
location. With an initiative
like this, the team gains experience and expertise
over time, so it’s that much more important to
keep at it. In order not to break sea turtle eggs
that might be buried in the sand, the teeth on
the Beach Cleaner’s rake are short, and we also
lowered the pressure on the ATV’s tires. I was
driving the ATV, and I could see that the impact
we were having, both in terms of speed and the
efficient application of people’s labor, was very
significant. Seeing the results—and the smiles
of local residents—I felt a strong sense of having
achieved something worthwhile, and a strong
motivation to participate again.
First fuel cell vehicle class (January 2007)

CSR Report 2007 68

 FY2007 Honda Philanthropy: Highlights

Traffic Safety Initiatives Community Initiatives

Traffic Safety Caravan— Since Honda’s foundation, we have always

traffic safety training for sought harmonious coexistence with the
pre-schoolers communities we have come into contact with
Honda is working in many ways to make sure as operations expand.
we can all get around in safety and comfort. Following the basic principles of Honda
One of our top priorities is protecting children philanthropy, we believe the first step in
from traffic accidents and helping make sure fulfilling our responsibilities as a corporate
cars and communities get along. Seeking to citizen is to put down roots. Honda’s facilities,
reach children in their formative years and give dealerships and affiliates throughout Japan
them a chance to master the basics of road and all over the world are active in a wide
safety, Honda started the Traffic Safety Caravan range of initiatives tailored to the needs of their
program for pre-school children. The caravan own local communities and designed to bring
visits nurseries and kindergartens, where it gives people happiness.
children an opportunity to learn the rules of the
road through storytelling Touch the World
and game-playing. Taking advantage of the unique opportunities
Launched in the to be found in Tokyo’s Minato Ward, home
Kanto region in 1999, of Honda headquarters and many foreign
the program has embassies, Honda has sponsored a cross-
expanded to cover other cultural event that gives children an
communities that host opportunity to experience different cultures.
Honda factories in Japan. So far, representatives of 33 different countries
In FY2007 it visited 590 have been invited to help with the event
nurseries and schools at the Welcome Plaza showroom at Honda
and entertained 76,329 headquarters in Aoyama, Tokyo.
participants. In 2006, the eighth year of Touch the World,
Traffic Safety Caravan
the Colombian, Egyptian, Kazakhstan and Swiss
VOICE embassies participated. Young visitors enjoyed
A teacher’s evaluation of the Traffic Safety Caravan
events like the Mini World Tour, where they
The Traffic Safety Caravan visited our school last year. “traveled” to booths representing different
Reading aloud to the children is the key to the success nations using special passports and exchanging
of the Traffic Safety Caravan. I always try to start every
activity with a reading too. It engages the children
and helps them concentrate. And when teaching
the children about using crosswalks, the caravan cast
always repeated the point being taught, and the
children had a chance to try it themselves—learning
by doing. When children are allowed to do things for
Kazumi Saito
themselves, they really get involved. We’re hoping Teacher, Suginami Toyo
that getting on and off the kindergarten bus could Kindergarten
be the theme of a future lesson. Ideally, the Traffic
Safety Caravan would include lessons to match the circumstances of each
educational institution. Everyone here has just one question: “When will the
Traffic Safety Caravan be coming next?”

Touch the World 8, held at Welcome Plaza Aoyama at the Honda headquarters
in Tokyo (June 2006)

69 CSR Report 2007

 Chapter
Looking After
Communities

VOICE while communicating the importance of

An associate volunteer on
dreaming and taking on challenges. In one
Touch the World
workshop, students were challenged to protect
One of my goals this an egg from the impact of a high tower drop
year was to become a
volunteer. I really wanted
using limited scrap material. The students
to take this opportunity to learned the engineering principles of shock
communicate with people
from countries I have
absorption and compression.
had little or no contact As a follow-up to maximize the impact of
with before. I helped with
the Egyptian exhibition,
the Dream Factory event, Honda of the UK
Yasuko Uchikoga
handing out Egyptian Manufacturing associates
sweets and helping write the kids’ names in
Arabic script. At first, there was some confusion as
visited participating
we attempted to communicate in English—and schools to gather post-
because of cultural differences—but the smiles
on the faces of the kids and other volunteers were
event feedback. The
very motivational. At the end of the event, I felt it response was extremely
had been a very worthwhile and fun-filled day.
positive: 96% of the
students expressed a
greetings in each country’s language, as well as greater appreciation of
World on Stage, featuring live performances by engineering and about
performers from around the world. Presentations half said they were
of artisan culture and other Japanese cultural interested in engineering- Trash removal, tree planting and bird-box
building are all part of the initiative
events were also included. The inquisitive related careers.
children got to sing and dance together on Honda of the UK Manufacturing plans to
stage, sample new and unfamiliar foods from continue the Dream Factory, giving more local
different lands, and enjoy experiencing different children the opportunity to experience the joy
cultures. of making things.

The Dream Factory Spring Creek preservation

In January 2007 Honda of the UK Manufacturing Since 2000, Honda Canada associates and their
organized the first Dream Factory at the Science families have been volunteering to clean up
Museum in Swindon for students between and enhance the habitat of Spring Creek, which
11 and 14 years old who attend schools in flows through company property in Alliston,
communities around local Honda facilities. The Ontario. The volunteers go to work once a year
purpose of the Dream Factory was to provide on the first Saturday in May. Every year over 100
inspiration and a sense of excitement about people participate.
manufacturing and engineering to students,

Enjoying the challenge of making things Clean-up and conservation work begins after a short orientation

CSR Report 2007 70

 FY2007 Honda Philanthropy: Highlights

Honda School Environment and improving the natural environment in

Challenge Awards the regions where they live. Children from the
In 1999 Asian Honda Motor and the Honda selected schools are given eight months to
Group of Companies in Thailand launched the put their projects into action. Honda provides
Honda School Environment Challenge Awards funding and invites the children to Knowledge
to help fulfill King Bhumibol’s wish to meet the Camps where they are provided expert
environmental challenges facing the country. All guidance. Honda works with Thai government
elementary schools across Thailand are invited ministries in charge of resources and the
to submit a project plan aimed at conserving environment, energy, education and agriculture
to implement the program. The King’s Cup is
presented to the school demonstrating the
most outstanding commitment to preserving
the environment in their community.
As of FY2007, 600 schools from across
Thailand have received support in the context
of the Honda School Environment Challenge.

Participation in the Honda School Environment Challenge

Exploring nature and learning about Thai herbs
Participating Schools
schools supported

1st cycle (1999 onward) 1,148 131

2nd cycle (2002 onward) 1,204 234

3rd cycle (2004 onward) 650 175

4th cycle (2006 onward) 627 60

Planting mangrove saplings

Studying traffic safety—working to create the ideal mobile society

International Association of Traffic and Safety Sciences (IATSS) initiative
TOPICS
Established in 1974, the International Association of Traffic and Safety
Sciences (IATSS) is a foundation that acts as a forum for free discussion
and research on the present and future state of transportation in
mobile societies. The association is funded by endowments from
founder Soichiro Honda, Takeo Fujisawa and Honda Motor. Led
by prominent scholars and experts, the association sponsors a
broad range of studies and policy proposals aimed at improving
traffic safety, as well as awards, scientific conferences, international
exchanges and publications. It also provides support for traffic safety-
International Association of Traffic and Safety
related programs that respond to pressing concerns of the day. Sciences conference (April 2007)

71 CSR Report 2007

CSR Report 2007
Scope
This report focuses primarily on the activities of Honda Motor Co., Ltd., with
some coverage of Honda Group companies in Japan and elsewhere. In
general, references to “Honda” are to Honda Motor Co., Ltd.

Disclaimer
In addition to factual information regarding the past and present status of
Honda Motor Co., Ltd., this report contains plans, perspectives and forecasts
based on corporate philosophy and management strategies as of the date of
publication. Sections of the report dealing with such plans, perspectives and
forecasts are based on information available at time of publication. Actual
results and events may differ.

Period
The report primarily covers activities from April 1, 2006, to March 31, 2007.
Some historical background of these activities and references to events up to
the time of publication, as well as forecasts and plans, may also be included.

Publication date
Current edition: October 2007
Next edition: October 2008

Please direct enquiries to

CSR Department, Legal Division, Honda Motor Co., Ltd.
2-1-1 Minami- Aoyama, Minato-ku, Tokyo 107-8556, Japan
Tel: +81-(0)3-5412-1202 Fax: +81-(0)3-5412-1207

Web
This report can also be found on the
Honda Worldwide website.
http://world.honda.com/CSR/

CSR Report 2007 72

 CSR Report 2007
Honda Motor Co., Ltd.

Paper used in this pamphlet is produced from fiber sourced from well-managed forests and
other forests where unacceptable sources have been excluded, as defined by the FSC.
Printed with soy ink made from plants containing minimal volatile organic compounds
Printed using processes that do not involve the output of wastewater