Temple of VTEC Rumors and News - Remarks by Takeo Fukui

Good morning, ladies and gentlemen. Thank you for joining us today. I last saw many of you in March at the Geneva Auto Show. It is my pleasure to be back in Europe.

Two years ago at IAA, I told you that: �We have a strong determination to succeed in Europe.� I explained how Europe will help Honda strengthen our technology and brand value. I also made a commitment to provide products and services that exceed the expectations of our customers in Europe.

Based on this commitment, we have continued to increase the number of models equipped with Honda�s original diesel engine � an engine we developed exclusively for Europe. Our lineup now includes a number of models that offer new value to the customer. As a result, we are enjoying a solid sales increase.

Today, I want to continue this momentum by introducing two new Civic models that will be launched in early 2006. This includes a hatchback we developed exclusively for our customers in Europe. And the Civic Hybrid, which we believe will further strengthen Honda�s presence in the hybrid vehicle market.

The all-new Civic Hatchback is THE vehicle for Europe � in so many ways. Our goal has been to create a car that revolutionises the market � a product that makes other cars look outdated.

As seen with the concept model at the Geneva show, we have achieved a distinct emotional style. At the same time, Civic was designed to create new value for our customers. We achieve this through dynamic performance, safety and environmental features. But we also offer a �Hidden Versatility� that gives the car a totally new dimension.

The Civic will feature three powertrains to provide a fun-to-drive spirit that is fundamental to Honda DNA. But the all-new 1.8 petrol engine and 2.2 diesel engine also provide best-in-class fuel efficiency. And a 1.4 petrol engine is added to meet the needs of a wider range of customers.

In every way, the all-new Civic represents a dynamic shift toward the premium end. We made NO compromise in any aspect of the development of this vehicle for Europe.

Further, this all-new Civic hatchback will be the third generation Civic built in our highly flexible auto plant in the UK.

The other vehicle that makes its worldwide debut today is the Civic Hybrid.

Honda is not a new-comer to the hybrid segment. We believe hybrid technology is an important means to reduce greenhouse gas emissions. We have sold a total of more than 118,000 hybrid cars worldwide. The Insight � with the world�s best fuel economy. The Accord Hybrid in North America � the first performance hybrid. Now, we have created a new ultra-efficient Civic Hybrid. This will further advance Honda leadership in petrol-electric hybrid vehicles.

With an improved Integrated Motor Assist System, this all-new Honda Hybrid System achieves a 20% increase in system output. This provides Civic with the performance of a 1.8-litre engine from a 1.3-litre petrol engine. It also advances fuel economy to an extremely efficient 4.6 litre/100km, which results in 109g/km CO2 emissions.

But this new Civic Hybrid shines in other ways. Like the hatchback � it will appeal to our customers� emotions. It offers dynamic qualities that will change perceptions about how a hybrid drives.

As I mentioned earlier, Honda considers hybrid technology to be one of the most effective environmental technologies. So, we won�t stop here. We will expand application of hybrid technology to other models in Europe. In this way, we will better serve the needs of both the customer and society.

Turning to safety, Honda has earned a reputation as an industry leader in pedestrian protection technology. The new Civic further advances safety performance. The hatchback and hybrid models for Europe will feature vehicle stability assist and side curtain airbags. And, based on in-house testing using the Euro-NCAP standard � Civic has achieved top-class safety performance.

Let me share a few more details about Honda�s advanced safety technologies. Today, we exhibit the prototype of our flag-ship model, the all-new Legend. It will go on sale in Europe next year. The Legend in Europe will enhance pedestrian protection with an industry-leading pop-up hood. In a collision, this system lifts the engine hood to reduce the possibility of serious injury to the pedestrian�s head region. The Legend will also be equipped with Honda�s Collision Mitigation Brake System. This technology predicts rear-end collisions and mitigates the impact.

Today, we also are introducing Adaptive Cruise Control to the 2006 Accord. Further, for the first time in Europe, Honda will introduce its Lane Keeping Assist System to the Accord. This is more than just a lane departure warning system. It also applies torque to the steering wheel to assist the driver in keeping the vehicle in its lane. Initially, this system will be equipped on the Accord for the UK. We will expand application to other European countries in the future.

As you can see from these technologies, Honda continues to create new value for our customers.

But, today, our focus is on the Civic. And we have a total of nine units of the hatchback and one hybrid model for your review. Please take a moment to experience the new value which these Civics offer! We look forward to your comments.

Thank you very much.