Honda Motor Co., Ltd. Reports Results for the Fiscal Third Quarter and the Nine Months Ended December 31, 2008

TOKYO, January 30, 2009: Honda Motor Co., Ltd. today announced its consolidated financial results for the fiscal third quarter and the fiscal nine months ended December 31, 2008.

Third Quarter Results

Honda's consolidated net income for the fiscal third quarter ended December 31, 2008 totaled JPY 20.2 billion (USD 222 million), a decrease of 89.9% from the same period in 2007. Basic net income per common share for the quarter amounted to JPY 11.16 (USD 0.12), a decrease of JPY 99.09 from JPY 110.25 for the corresponding period last year. One Honda American Depository Share represents one common share.

Consolidated net sales and other operating revenue (herein referred to as "revenue") for the quarter amounted to JPY 2,533.2 billion (USD 27,829 million), a decrease of 16.8% from the same period in 2007, primarily due to decreased revenue in the automobile business and currency translation effects, although unit sales in motorcycle business increased. Honda estimates that if calculated at the same exchange rate as the corresponding period in 2007, revenue for the quarter would have decreased by approximately 4.4%.

Consolidated operating income for the quarter totaled JPY 102.4 billion (USD 1,125 million), a decrease of 62.9%, due primarily to increased raw material costs, fixed costs per unit as a result of reduced production and SG&A expenses and the negative impact of currency effects caused by the appreciation of the Japanese yen.

Consolidated income before income taxes, minority interest and equity in income of affiliates for the quarter totaled JPY 86.7 billion (USD 953 million), a decrease of 66.7% from the same period in 2007.

Equity in income of affiliates amounted to JPY 30.7 billion (USD 338 million) for the quarter, a decrease of 1.6% from the corresponding period last year.

Business Segment

With respect to Honda's sales for the fiscal third quarter by business segment, motorcycle unit sales totaled 2,504 thousand units, an increase of 5.8% from the same period last year. Unit sales in Japan totaled 44 thousand units, a decrease of 18.5% compared to the same period last year. Overseas unit sales was 2,460 thousand units, an increase of 6.4% from the same period in 2007*, due mainly to increased unit sales in Asia, particularly in India and Vietnam, and in Brazil. Revenue from sales to external customers decreased 6.0%, to JPY 342.8 billion (USD 3,767 million) from the same period last year, due mainly to negative currency translation effects. Operating income was JPY 25.2 billion (USD 277 million), a decrease of 16.9% from the same period last year, due mainly to increased raw material costs and the negative impact of currency effects caused by the appreciation of the Japanese yen, more than offsetting the positive impact of increased revenue, model mix, etc., continuing cost reduction efforts and decreased SG&A expenses.

*Of the net sales of Honda-brand motorcycle products that are manufactured and sold by overseas affiliates accounted for under the equity method, those with respect to which parts for manufacturing were not supplied from Honda or its subsidiaries are not included in net sales and other operating revenue, in conformity with U.S. generally accepted accounting principles. Accordingly, these unit sales are not included in the financial results. Sales of such products amounted to approximately 1,110 thousand units for the period.

Honda's automobile unit sales totaled 940 thousand units, a decrease of 5.1% for the same period last year. In Japan, unit sales amounted to 135 thousand units, a decrease of 6.9% from the same period last year. Overseas unit sales decreased 4.8% to 805 thousand units from the corresponding period last year, due mainly to weak demand, primarily for light trucks, in North America and decreased unit sales in Europe, more than offsetting an increase of unit sales in Asia, mainly in Thailand and other regions including Brazil, and increased sales of automobile knocked-down parts to China. Revenue from sales to external customers decreased 19.4% to JPY 1,974.2 billion (USD 21,688 million) from the same period in 2007, due mainly to the negative currency translation effects and decreased overseas unit sales, particularly in North America. Operating income decreased 68.0% to JPY 70.5 billion (USD 775 million) from the same period last year, due primarily to increased raw material costs, decreased revenue, increased SG&A expenses and the negative impact of currency effects, more than offsetting continuing cost reduction efforts.

Revenue from customers in the financial services business increased 5.0% to JPY 142.6 billion (USD 1,568 million) from the same period in 2007, due mainly to an increase in operating lease revenues. Operating income decreased 58.5% to JPY 9.4 billion (USD 104 million) from the same period in 2007, due primarily to the increased provision related to credit losses and allowance for losses on lease residual values.

Honda's power product unit sales totaled 1,115 thousand units, a decrease of 5.3% from the same period in 2007. In Japan, unit sales totaled 110 thousand units, a decrease of 10.6% from the same period last year. Overseas unit sales totaled 1,005 thousand units, a decrease of 4.7% from the corresponding period last year, due primarily to a decline of unit sales of general-purpose engines for OEM* production in Europe and of generators in North America. Revenue from sales to external customers in power product and other businesses decreased by 22.9% to JPY 73.3 billion (USD 806 million) from the same period last year, due mainly to decreased unit sales of power products and negative currency translation effects. The Company reported operating loss of JPY 2.8 billion (USD 31 million), a decrease of JPY 5.0 billion from the same period in 2007. This was primarily due to the negative impact of decreased revenue, model mix etc., negative currency effects caused by the appreciation of the Japanese yen and increased R&D expenses of other businesses, which more than offset decreased SG&A expenses.

* OEM (Original equipment manufacturing)

OEM refers to a manufacturing of products and components supplied for sale under a third-party brand.

Geographical Information

With respect to Honda's sales for the fiscal third quarter by geographic area, in Japan, revenue from domestic and exports sales amounted to JPY 1,079.2 billion (USD 11,856 million), down 13.4% compared to the same period last year, due primarily to decreased unit sales in automobile business in Japan. Operating income decreased JPY 120.5 billion from the same period last year, to record operating loss of JPY 64.3 billion (USD 707 million), due primarily to the negative impact of decreased revenue, model mix, etc., increased raw material costs and the negative impact of the currency effects caused by the appreciation of the Japanese yen, more than offsetting continuing cost reduction efforts and decreased SG&A expenses.

In North America, revenue decreased by 24.9% to JPY 1,231.6 billion (USD 13,530 million) from the same period in 2007 due mainly to the negative impact of the currency translation effects and decreased revenue in the automobile business. Operating income decreased by 55.2% to JPY 70.0 billion (USD 770 million) from the same period last year due primarily to the negative impact of decreased revenue, weak model mix, increased raw material costs, the increase in fixed costs per unit as a result of reduced production and the negative impact of currency effects caused by appreciation of the Japanese yen, more than offsetting decreased SG&A expenses.

In Europe, revenue decreased by 17.2% to JPY 299.4 billion (USD 3,289 million), from the same period in 2007 due primarily to the negative impact of currency translation effects and decreased revenue in all of the business segments. Operating income decreased by 80.5% to JPY 1.1 billion (USD 13 million) from the same period last year due primarily to increased SG&A expenses and increased raw material costs despite continuing cost reduction efforts.

In Asia, revenue decreased by 6.8% to JPY 385.2 billion (USD 4,232 million) from the same period last year due to the negative impact of the currency translation effects despite increased sales in the motorcycle and automobile businesses. Operating income decreased by 34.8% to JPY 24.9 billion (USD 275 million) from the corresponding period last year due mainly to the negative impact of the currency effects caused by the appreciation of the Japanese yen, increased raw material costs and increased SG&A expenses, more than offsetting the positive impact of increased revenue.

In Asia, in addition to subsidiaries, many affiliates accounted for under the equity method manufacture and sell Honda-brand products. Operating income does not include income from these affiliates. Income from these affiliates is recorded as equity in income of affiliates and reflected in net income. Accounting terms of some of the affiliates differ from the Company's.

In other regions such as Latin America, the Middle East, Africa and Oceania, revenue increased by 7.1% to JPY 304.7 billion (USD 3,347 million) compared to the same period last year, due mainly to increased sales in all business segments, which more than offset the negative impact of currency translation effects. Operating income increased by 31.8% to JPY 41.8 billion (USD 460 million) from the corresponding period in 2007.

United States dollar amounts have been translated from yen solely for the convenience of the reader at the rate of 91.03 yen=U.S.$1, the mean of the telegraphic transfer selling exchange rate and the telegraphic transfer buying exchange rate prevailing on the Tokyo foreign exchange market on December 31, 2008.

Forecasts for the Fiscal Year Ending March 31, 2009

In regard to the forecasts of the financial results for the fiscal year ending March 31, 2009, Honda projects consolidated results to be as shown below:

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 85 and JPY 110, respectively, for the fourth quarter of the year ending March 31, 2009, and JPY 100 and JPY 140, respectively, for the full year ending March 31, 2009.