Tokyo, Japan – In his year-end statement, Honda president and CEO Takeo Fukui has confirmed that Acura has cancelled plans for a V10-powered successor to the NSX sports car. He also outlined several actions that the company will take in order to deal with the worldwide economic crisis and the slump in auto sales.

“The abrupt change involving the global automobile industry from mid-September of this year that was triggered by the financial crisis forced all the automakers to change various plans over a very short period of time,” Fukui said. “The situation is worsening day by day, and is showing no sign of recovery. Despite this severe business environment, Honda has been able to introduce its advanced environmental technologies to its customers in the form of products such as the FCX Clarity fuel cell vehicle and the all-new Insight hybrid vehicle.”

Among the points Fukui outlined in his statement:

– Production in Japan will be further cut by 54,000 vehicles during the current fiscal year. This follows earlier production cuts made in the second half of 2008 in North America, Europe and Japan.

– Sales of Honda and Acura vehicles in North America is forecast for 2008 at 1.43 million units, down 8 per cent from 2007. Other sales forecasts include 157,000 units in South America, up 34 per cent, although Fukui noted that the financial situation is rapidly worsening in the last half of the year; 380,000 units in Europe, up 1 per cent from 2007; 367,000 units in Asia, up 7 per cent, due mostly to strong sales of the all-new City; 478,000 units in China, up 12 per cent; and 622,000 units in Japan, unchanged from 2007.

– The company plans advancement of its global production system and capabilities, with a central focus on Japan, due to its leader function; the creation of fuel-efficient products; and further advancement of the company’s motorcycle business. At the same time, all investments and development projects will be reassessed from scratch and prioritized, and bonuses for directors, corporate auditors and operating officers will be reassessed, and their monthly salaries will be cut by 10 per cent starting January 2009.

– Several plants will be reassessed. The start of operations at a new auto plant in Yorii, initially scheduled for 2010, will be delayed by more than one year; a new mini-vehicle production plant at Yachiyo Industry will have its full-scale operation, initially scheduled for 2010, delayed by a little more than a year; the expansion of automobile production in India, scheduled for 2010, and Turkey, scheduled for mid-2009, will be delayed; and production of the Canadian and U.S. versions of the Honda Fit will start in Saitama Factory from the spring of 2009, in addition to production in Suzuka Factory.

– Honda will strengthen its Honda Cars sales network in Japan, but will withdraw its prior plan to introduce the Acura brand in the Japanese market, which was scheduled to begin around 2010. The development of the V10-powered NSX successor model has been cancelled. The start of operations at a new research and development centre in Sakura, scheduled to be fully operational in 2010, will be delayed.

– Honda has withdrawn from all Formula One activities, making 2008 the last season of participation.

– The company will focus all of its energy on hybrids and achieve mass market penetration as soon as possible, with sales of the all-new Insight scheduled to begin in the spring of 2009. A sporty hybrid based on the CR-Z will go on sale by the end of 2010. The company is also considering the possibility of applying hybrid technology to medium- and large-size vehicles.

– In global markets, especially in newly-emerging countries, Honda will progress on the development of a new small car, positioned in the class below Fit, with a goal of market introduction in two to three years.

– The company will make progress in the development of small-size diesel engines, and to concentrate its resources on hybrids and small cars, the introduction of medium- to large-size diesel models in the U.S. and Japan will be delayed.

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