Honda Motor Reports Consolidated Financial Results for the Fiscal First Quarter Ended June 30, 2011

FYI: Honda Buyer's Guide

TOKYO--Aug. 1, 2011: Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal first quarter ended June 30, 2011.

1Q Results

Honda's consolidated net income attributable to Honda Motor Co., Ltd. for the fiscal first quarter ended June 30, 2011 totaled JPY 31.7 billion (USD 394 million), a decrease of 88.3% from the same period last year. Basic net income attributable to Honda Motor Co., Ltd. per common share for the quarter amounted to JPY 17.64 (USD 0.22), a decrease of JPY 132.63 from JPY 150.27 for the corresponding period last year.

Consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 1,714.5 billion (USD 21,239 million), a decrease of 27.4% from the same period last year, due primarily to decreased revenue in the automobile business mainly caused by the impact of the Great East Japan Earthquake occurred on March 11, 2011 (the "Earthquake") and the unfavorable foreign currency translation effects, despite increased revenue in the motorcycle business. Honda estimates that if calculated at the same exchange rate as the corresponding period last year, revenue for the quarter would have decreased by approximately 22.7%.

Consolidated operating income for the quarter amounted to JPY 22.5 billion (USD 280 million), a decrease of 90.4% from the same period last year, due primarily to decreased sales volume and model mix, increase in fixed cost per unit as production output has reduced and the unfavorable foreign currency effect, despite decreased SG&A expenses.

With respect to Honda's sales for the fiscal first quarter by business segment, motorcycle unit sales totaled 2,751 thousand units, a decrease of 4.7% from the same period last year due mainly to the exclusion of unit sales after the dissolution of a joint venture in Asia, a late of shipment, and decreased sales in North America, despite increased unit sales in other regions including South America. Unit sales excluding the shipment of parts for overseas production increased approximately 200 thousands units. Revenue from sales to external customers increased 3.2%, to JPY 330.3 billion (USD 4,092 million), from the same period last year, due mainly to increased unit sales excluding the sales of parts for overseas production, despite the unfavorable currency translation effects. Operating income totaled to JPY 44.9 billion (USD 557 million), an increase of 43.5% from the same period last year, due primarily to increased revenue, despite increased SG&A expenses and the unfavorable foreign currency effects.

Honda's automobile unit sales totaled 547 thousand units, a decrease of 39.2% from the same period last year due to production disruptions in all regions from the Earthquake. Revenue from sales to external customers decreased 35.1%, to JPY 1,176.9 billion (USD 14,578 million), from the same period last year due mainly to decreased unit sales and unfavorable currency translation effects. Honda reported an operating loss of JPY 76.2 billion (USD 944 million), a deterioration of JPY 225.1 billion from the same period last year, due primarily to decreased unit sales and increase in fixed cost per unit, despite decreased SG&A expenses.

Revenue from customers in the financial services business decreased 9.1%, to JPY 135.8 billion (USD 1,682 million) from the same period last year due mainly to the unfavorable foreign currency translation effects. Operating income decreased 1.9% to JPY 53.6 billion (USD 664 million) from the same period last year due mainly to the unfavorable foreign currency effects, despite the decreased allowance for losses on credit and lease residual values.

Honda's power product unit sales totaled 1,512 thousand units, an increase of 5.0% from the same period last year due to an increase of unit sales in Europe, Asia and Japan, despite a decrease of unit sales in North America. Revenue from sales to external customers in power product and other businesses decreased 3.6%, to JPY 71.4 billion (USD 886 million), from the same period last year, due mainly to the unfavorable currency translation effects, despite increased unit sales in power products. Operating income totaled JPY 0.2 billion (USD 3 million), an increase of JPY 0.8 billion from the same period last year due mainly to an increase of unit sales in power products.

Revised Forecasts for the Fiscal Year Ending March 31, 2012

The forecasts are based on the assumption that the average exchange rates for the Japanese yen to the U.S. dollar and the Euro will be JPY 80 and JPY 112, respectively, for the fiscal full year ending March 31, 2012.

Projected unit sales for the full year ending March 31, 2012 are shown below.

Dividend per Share of Common Stock

The Board of Directors of Honda Motor Co., Ltd., at its meeting held on August 1, 2011, resolved to make the quarterly dividend JPY 15 per share of common stock, the record date of which is June 30, 2011.  The total expected annual dividend per share of common stock for the fiscal year ending March 31, 2012, is JPY 60 per share.

This announcement contains "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on management's assumptions and beliefs taking into account information currently available to it. Therefore, please be advised that Honda's actual results could differ materially from those described in these forward-looking statements as a result of numerous factors, including general economic conditions in Honda's principal markets and foreign exchange rates between the Japanese yen and the U.S. dollar, the Euro and other major currencies, as well as other factors detailed from time to time. The various factors for increases and decreases in income have been classified in accordance with a method that Honda considers reasonable.