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Honda to Build New Motorcycle Plant in Peru

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(official press release)

Peru – Nov 30, 2006: Honda del Peru S.A. announced plans to establish a wholly-owned manufacturing subsidiary, Honda Selva del Peru S.A. (HSP), which will begin construction of a new plant in Iquitos, Loreto, in December. HSP will begin production of motorcycles in 2007, in order to meet growing demand in Peru.

The motorcycle market in Peru has been growing rapidly since 2004. The total market reached approximately 63,000 units in 2005, a 29% increase from 2004, and is expected to reach 90,000 units in 2006. Moreover, in the near future, the overall market in Peru is expected to reach the level of 200,000 units annually, due to the continuous growth of population and income average.

Honda’s motorcycle sales in Peru reached approximately 12,000 units in 2005, a 35% increase from 2004. Honda expects to sell approximately 20,000 units in 2006, with further expansion expected in the future.

HSP will be built in the Selva (Amazon) area with a capital investment of US$2 million. The plant will have an annual capacity of 25,000 units. The new 6,500 m2 plant building will be located on a 30,000 m2 site and will begin production of the first model, NXR125, in late 2007. The potential capacity is expandable up to 100,000 units in the future with additional expansion of the building and the equipment.

Honda will continue to provide attractive products in a timely manner in order to meet market demand and the growing needs of its customers.

Honda del Peru S.A.

Establishment: January 1974
Began Operations: October 1976
Location: Lima, Peru
Capital Investment: US$ 12.52 million
Capitalization Ratio: 100% Honda Motor Co., Ltd.
Representative: Terumi Shibasaki, President
Business: Import and sales of Honda motorcycles, automobiles,
and power
Employment: 71 associates (as of October 2006)

Honda Selva del Peru S.A.

Establishment September 2006
Production start: The latter half of 2007
Location: Iquitos, Loreto, Peru
Capital Investment: US$ 2 million
Capitalization Ratio: 100% Honda del Peru S.A.
Representative: Terumi Shibasaki, President
Business: Production of Honda motorcycles
Annual capacity: 25,000 units
Employment: 34 associates (as of the latter half of 2007)
Production model: NXR125

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