Honda Report 2023

What drives your dreams?

Contents

Value Creation Story 5 Key Themes Editorial Policy

Honda Philosophy  2 ■ To Realize a Zero Honda believes that promoting constructive dialogue with shareholders and
investors is essential for achieving its sustained growth and increasing corporate Disclaimer
Sources of Value Creation Environmental Impact Society value over the mid- to long term.
Honda strives to expand opportunities for dialogue and information This report contains past
by Numbers  3 Environmental Strategy  27 disclosure with stakeholders such as institutional investors and analysts. We then and current factual data of
appropriately feedback their opinions and requests to management in a timely Honda Motor Co., Ltd. as
Global Brand Slogan  4 well as plans and outlook
manner for use in discussions to further raise corporate value.
and future projections
CEO Message  5 ■  o Realize a Zero Traffic
T based on its management
Reference Framework
Value Creation Process  7 Collision Society policies and management
In producing this report, we used as reference such sources as the International strategies as of the date of
Corporate Strategy  8 Safety Strategy  37 Integrated Reporting Framework of the Value Reporting Foundation, which was publication. These future
consolidated into the IFRS Foundation on August 1, 2022, and Integrated Reporting projections are assumptions
Financial Strategy  12 for Corporate Value Creation of the Ministry of Economy, Trade and Industry. or decisions derived from
the information available
■  he Evolution of Human
T Organizations Covered at the time this report was
Capital Management This report covers the entire Honda Group, which consists of Honda Motor Co., Ltd.
produced. Please note that
the results of future business
and its 382 domestic and overseas companies (313 consolidated subsidiaries and activities and events
Human Capital Strategy  42
Business Strategy 69 affiliates accounted for under the equity method). Sections that do not cover the
entire Honda Group are indicated as such with a reference to the specific scope.
may vary depending on
changes in conditions and
Electrification Business Strategy  15 circumstances. This report
■  reation of Innovative
C Reporting Period may also contain corrections,
Automobile Business Strategy  16 restatement or significant
Technologies This report focuses primarily on the activities undertaken during FY2023 (April
1, 2022 – March 31, 2023), and also includes past background information and changes to information
Motorcycle Business Strategy  21 activities conducted up to the time of publication, as well as other matters provided in previous reports.
Challenges in New Fields  51 including future outlook and plans.
Power Products Business Strategy  24

■ Brand Value Enhancement

Enhancement of Consistent Brand Disclosure Material Medium- to long-term perspective
Management  55
Honda Report
[Integrated Reports]

Honda Report
Governance  56
Honda Report 2023

2023
Related Data Financial Nonfinancial
ESG Data Book
Major Indicators  70 Securities Report

10-Year Summary  71 有 価 証 券 報 告 書
Honda
ESG Data Book

Company Overview  72 2023

事業年度 自 2022年４月１日
(第99期) 至 2023年３月31日

■ Form 20-F

■ Corporate Governance Reports

本田技研工業株式会社

■ Financial Statements (E02166)

Results

Honda Report 2023 1

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Honda Philosophy

Initiative
Initiative
The
TheJoy
Joyof
of
Respect for the Buying
Buying

Individual Respect
Respect The Three Joys
人間尊重
人間尊重 for
forthe
the 三つの喜び
三つの喜び
Individual
Individual The
TheThree
Three
Joys
Joys
Equality
Equality Trust
Trust
The
TheJoy
Joyof
of The
TheJoy
Joyof
of
Selling
Selling Creating
Creating
基本理念
基本理念
Fundamental
Beliefs

Initiative : I nitiative means not to be bound by preconceived ideas, but think creatively and The Joy of Buying : The joy of buying is achieved through providing products and services
act on your own initiative and judgment, while understanding that you must that exceed the needs and expectations of each customer.
take responsibility for the results of those actions. The Joy of Selling : The joy of selling occurs when those who are engaged in selling and
Equality : E
 quality means to recognize and respect individual differences in one another servicing Honda products develop relationships with a customer
and treat each other fairly. Our company is committed to this principle and to based on mutual trust. Through this relationship, Honda associates,
creating equal opportunities for each individual. An individual’s race, sex, age, dealers and distributors experience pride and joy in satisfying the
religion, national origin, educational background, and social or economic status customer and in representing Honda to the customer.
have no bearing on the individual’s opportunities. The Joy of Creating : The joy of creating occurs when Honda associates and suppliers
Trust : The relationship among associates at Honda should be based on mutual trust. involved in the design, development, engineering and manufacturing
Trust is created by recognizing each other as individuals, helping out where of Honda products recognize a sense of joy in our customers and
others are deficient, accepting help where we are deficient, sharing our dealers. The joy of creating occurs when quality products exceed
knowledge, and making a sincere effort to fulfill our responsibilities. expectations and we experience pride in a job well done.

Company Maintaining a global viewpoint, we are dedicated to supplying products of the

Principle
highest quality yet at a reasonable price for worldwide customer satisfaction.

■ Proceed always with ambition and youthfulness. ■ Enjoy your work and encourage open communications.
Management ■ Respect sound theory, develop fresh ideas and make the most ■ Strive constantly for a harmonious flow of work.
Policies
effective use of time. ■ Be ever mindful of the value of research and endeavor.

Honda Report 2023 2

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data
イントロ めざす姿 全社戦略 重点施策 ESG 関連データ

Sources
数値で見る of Value Creation by Numbers Six Capitals
価値創造の源泉

Financial Capital Human Capital Manufacturing Capital Intellectual Social and Relationship
財務資本 人的資本 製造資本 知的資本 Capital Natural
自然資本 Capital 社会関係資本
Capital
A strong financial base that allows Support for individual and Evolution of production system to Enhancing the technological Reduction of environmental
us to invest resources for organizational growth that leads achieve high product innovation capability to create impact for coexistence and Deepen and expand relationships
変革に向けた資源投入を可能と
transformation 価値創造につながる「個」と
to value creation 高い商品魅力の実現に向けた
attractiveness 魅力的な商品・サービスを
compelling products and services 自然との共存共栄に向けた
co-prosperity with nature ステークホルダーとの信頼・
of trust and cooperation with
する強固な財務基盤 「組織」の成長支援 生産体制の強化 生み出す技術創出力の強化 環境負荷低減 stakeholders
協力関係の深化と拡大

Net cash (excluding financial services) Number of associates Number of product assembly sites R&D expenses Energy input Number of group companies

2.7 tn YEN 74 sites Approx. 8 tn YEN 382 companies

ネットキャッシュ（金融事業を除く） 連結従業員数
Consolidated  製造拠点数 研究開発投資額 エネルギー投入量
Direct グループ会社数

2.7 兆円 *2023年3月31現在
(End of FY2023) 197,039 associates
連結
74 拠点
(As of the end of FY2023) 電動化/ソフトウェア領域
(FY2022- FY2031) 19,300
直接
TJ 313 69 382社
(including 313 consolidated subsidiaries and
69 affiliates社
+ 社＝
197,039名 5 19,300 TJ
accounted for under the equity
Non-consolidated 約 investments
R&D 兆円 Indirect 連結子会社 持分法適用会社

33,065 associates
method)

24,000
*2023年3月31現在
Total capital Capital investment*2
資本合計 Electrification / Software area
TJ (End of FY2023)

11.5
*2023年3月31現在

11.5tn兆円
YEN 単独
(Number of associates as of the end of FY2023)
493.9 bn YEN Approx. 5 tn YEN
新たな成長への仕込み 間接
(FY2023)

33,065名 1 24,000 TJ
*2023年3月31現在
(End of FY2023) Brand value*3

22,837 m USD
(FY2023)
Training hours per person per year
設備投資額
約 兆円
Preparation for new growth
ブランド価値

1 tn YEN
*2 Capital investment for the introduction of Resource input
有利子負債 （金融事業を除く）
Interest-bearing debt
18 hours
*2023年3月31現在における就業人員
4,939億円
new models, expansion, rationalization,
Approx.
*2021年度～2030年度 *2022年度
Water withdrawal 22,837 million USD
(2022)

0.8 兆円 33,200 k m3
renewal of production facilities, and
(excluding financial services*1) expansion of sales and R&D facilities, etc. (FY2022 - FY2031)

0.8 tn YEN
(FY2023 in Japan) *2023年3月31現在
*2023年3月31現在
*2023年3月31現在 Number of domestic and overseas
国内外特許保有件数 資源投入量
(FY2023) Best Global Brands 2022
*新機種の投入に伴う投資や、生産設備の
(End of FY2023)
*グリーンポンド発行27.5億米ドル含む 一人当たり年間研修時間 patents Automotive*3

More than 42,000 5

拡充、合理化および更新ならびに販売施設

42,000
・取水量 Brands 2022 Automotive
*1 Including US$2.75 billion Green Bond issue や研究開発施設の拡充などへの設備投資
件以上 th in the world
研究開発費
18時間 *2022年度 日本国内 patents 33,200 千m2 世界
(2022)
5位
8
*2023年3月31現在
*3 According to Interbrand research
約 兆円 *2021年度～2030年度 (End of FY2023)
*2022年度 *2022年度

Global
製品販売台数 Sales Figures for FY2023 Unit Sales in Major Markets
(10 thousand units)

2,808.9
累計販売台数 Japan
Europe
2,808.9万台 Motorcycles 34.7
Motorcycles

Automobiles
24.6

55.0
North America
Motorcycles 45.9
Automobiles 8.4 Power
Products 37.6
Motorcycles Power Automobiles 119.5

1,875.7
二輪 116.8
Products (million units) (10 thousand units) Power

1,875.7万台 Products
227.4
(million units) (10 thousand units)
(million units)
++
(10 thousand units)

Automobiles
四輪

368.7
368.7万台 Asia Other
++ Motorcycles 1,610.8 Motorcycles 159.7
Power Products

564.5
パワープロダクツ Automobiles 174.4 Automobiles 11.4

564.5万台 Power
Products 140.8
Power
Products 41.9

(million units) (10 thousand units) (million units) (10 thousand units)

Honda Report 2023 3

Honda Report 2023 3
Value Creation Story Business Strategy 5 Key Themes Governance Related Data

The dreams of each and every one of us working together have

always been the driving force of Honda.

We have different kinds of dreams, but by applying our original

technologies, ideas and design we take on challenges
continuously to realize mobility that enables our customers to
enjoy life with more freedom, more convenience and more fun.

The future mobility Honda dreams of will create a joy and

freedom of mobility that enables people to transcend the
constraints of time and place, and augment their every possibility.

Such mobility will become the “power” for people who are trying
to advance toward their own dreams.
Dreams that will move even more people, until there is an endless
expanse of new dreams.

The Power of Dreams

Through the creation of mobility we dream of, Honda will

become “The Power of Dreams” of more and more people.
That is how we will move people and society forward.

Honda Report 2023 4

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

CEO Message

The power of dreams, how we move you. Honda R

Unchanging Passion Since Our Founding the environment and safety, Honda aspires to chart a new trajectory of
growth as a company.
Director, President and Representative Since its founding, Honda has been driven by its “dreams.” Above all Amidst this era of significant transformation, which we position as
Executive Officer
else, we value original ideas, technologies and design, which derive the “second founding” of Honda, we have made progress toward
Toshihiro Mibe from our unwavering passion and out-of-the-box thinking, and Honda various initiatives. However, in order for all of us at Honda to work
has grown by fearlessly taking on challenges to realize what was together cohesively toward a common purpose at an accelerated speed,
thought to be impossible. Through the creation of diverse forms of we recognized the importance of re-clarifying “what we truly strive for.”
mobility, Honda aims to become the “power” that supports people
around the world who are trying to do things based on their own
Honda’s Future Vision
initiative, including those who take on new challenges and others who
are trying to make changes to themselves and the society they live in. In Honda Global Brand Slogan – The Power of Dreams – is a simple and
doing so, Honda has been providing value that contributes to the most straightforward expression of the fact that the dreams of each
advancement of mobility and people’s daily lives. and every one of us working together at Honda have always been the
As environmental awareness rises and digital technology rapidly driving force of Honda. Driven by dreams, what is Honda striving to
advances, the automotive industry is undergoing a once-in-one- achieve? What value is Honda going to offer to its customers? How will

2023
hundred-years transformation that is characterized by swift changes. Honda create such value? Answers to these questions are the core of
However, even in this era of a major transformation, the long-standing everything we do as a company, thus we decided to define what Honda
passion of Honda remains unchanged. Honda will strive to be a truly strives for and communicate it more clearly to both internal and
company people and society want to exist into the future by becoming external stakeholders.
the driving force for those who are determined to take new steps based In contemplating this, we revisited the essential value of every
on their own initiative. mobility product and service Honda has offered to date. Consequently,
We believe that mobility is a fundamental human desire. Our we arrived at the conclusion that there are two value propositions
relentless pursuit of advancing mobility, spanning automobiles, Honda wants to continue offering – One is to enable people to
motorcycles, power products, aircraft and more, enhances the “transcend various constraints such as time and place,” and the other is
“temporal and spatial value” of mobility, and expands people’s life’s to enable people to “augment their abilities and possibilities.” The
potential. When more people are “connected” through mobility, we can future mobility we dream of and a mobility society people desire lie
generate greater “power,” which leads us to the creation of a better ahead of us as we continue to thoroughly pursue these value
society. We believe it is Honda’s mission to realize such a future. propositions. Grounded in this notion, we expressed the value Honda
On another front, in order to contribute to society as a mobility- will continue to offer to its customers with two key words: “Transcend”
focused company, we must sincerely address difficult challenges of and “Augment.”
achieving “zero environmental impact” and “absolute safety.” “Transcend” conveys the meaning of “go beyond the limits.”
By realizing the future mobility Honda dreams of and a mobility Throughout our history, Honda has consistently offered the value of
society people desire, while addressing societal values in the areas of increased “convenience,” “freedom,” and “speed” via mobility. This value

Honda Report 2023 5

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

CEO Message

can be interpreted as enabling people to transcend various constraints and “Augment.” Such value we offer will move people, inspire people Guided by these perspectives, we will comprehensively reassess
that interfere with their mobility. and become the “power” to support people who take one step closer to every element that shapes our corporate culture, including the decision-
Especially, time is an absolute constraint for most people. Mobility their dreams. As the “power” of people who embarked on their making process, approaches to our work and our personnel systems.
products and services that enable more efficient utilization of the dream-filled journeys gains momentum and spreads to the people Through such internal changes, we will strive to establish an
universally granted 24 hours, 365 days have immeasurable value. around them, it will create new connections and realize an expanse of organization capable of realizing “The Power of Dreams.”
Through the creation of diverse mobility products and services which dreams throughout our society. Honda always believes in the power of
will be combined to realize seamless mobility, and with our advanced such infinite dreams that people pursue all around the world, and we
Toward the Realization of Dreams
technologies such as automated driving technologies, Honda will create want to be the “power” to help people realize their dreams.
the value of “transcending the constraints of time.” With these aspirations for the future, we have added a new tagline My dream is to realize a world where mobility products bearing the
In addition, Honda will also pursue the creation of the value of – How we move you. – which follows the “The Power of Dreams” in our Honda logos are traveling all around the world, on the ground, in the
“transcending the constraints of place” – with our aircraft products Global Brand Slogan. This tagline encapsulates the double meaning of ocean, in the skies and into outer space, and people are enjoying the
including eVTOL, which will make “three-dimensional mobility” “moving people physically” as a mobility company and “moving true freedom of mobility. I envision that Honda mobility products and
available for people, through our challenges in the field of space people’s hearts” through the value we provide. services will create more time and space where people can enjoy
technology, and with our avatar robots that people can control while We will continue our commitment to carry out our corporate freedom, and such temporal and spatial value of our mobility will
traversing physical distances. Under the key word of “transcend,” we will activities while striving to move people, inspire people, and spread further unlock human potential, becoming the driving force to
vigorously pursue various initiatives with an aim to provide customers dreams throughout the world. transform our society.
with the significant value of transcending the constraints of time and Each and every one of us working at Honda has a variety of dreams,
place.
Toward the Realization of the Value which will be the starting point of our creativity. By leading our
The other key word, “Augment,” signifies “making something creativity in the right direction, we will maximize the limitless “power of
greater.” By controlling new mobility products at our will, we can travel
Proposition of Honda dreams.” By creating a link between such power of dreams and the
faster and farther. We can reach places that were previously beyond At Honda, we believe that every associate should be an individual who is value proposition of Honda – Transcending and Augmenting – we will
human reach. We can effortlessly move heavy objects, and we can also driven by their intrinsic motivation and wants to realize their own dreams offer attractive products and services unique to Honda. Leading this
perform intricate tasks swiftly. If people become capable of doing by demonstrating their abilities, individuality and creativity to the fullest. process is the role I assume as the Global CEO of Honda. In today’s
something that they could not do before through the use of various As I mentioned earlier, the wellspring of the two value propositions we society, where people’s values are increasingly diverse, this challenge
mobility products and services Honda offers, we can say that we provide aim to offer is “the power of dreams” and the “creativity” of each and every will undoubtedly be formidable. However, I believe that the greater the
the value of “augmenting people’s possibilities.” We believe that “what associate. When the strong individualities of Honda associates collide, and challenge, the more worthwhile it is for us to take on.
people can do” is infinitely augmentable by enhancing people’s physical their diverse knowledge and dreams interact with each other, they evolve Toward a future filled with dreams and hopes, our journey of
and cognitive capabilities and optimizing them for various purposes into greater knowledge and more profound dreams. This synthesis challenge will continue. Please keep your expectations high for the
through the use of a variety of mobility products and services which manifests as “creation,” generating value. Pursuing this vision, we will seek dream-inspiring mobility products and services Honda will create for the
leverage digital technology. With our original ideas and technologies, to establish an environment where everyone who works at Honda can joy and freedom of mobility.
Honda will strive to enable people around the world to augment their fully demonstrate their abilities.
possibilities. To this end, we are asking the following question to ourselves.
Furthermore, another key word of our Global Brand Slogan is • Can each of us find meaning in our work and be passionate about our
“Create,” which conveys the message that it is the creativity of each and own work?
every one of us at Honda that becomes the key to creating the value • Are we clear about what we want to do, our dreams, our aspirations
proposition of Honda. With the key word of “Create,” all of us who work and our future goals? Are we fully committed to pursuing them?
together at Honda will set high goals and take on challenges without • Are there work environments and support systems which encourage
being afraid of changes, to “create” something which will generate new us to take on such challenges?
value for our customers. • At every workplace, are we pursuing the very essence of things,
Our creative power fueled by our dreams will generate the value having candid and unreserved discussions involving diverse individuals
proposition of Honda represented by the two key words: “Transcend” and conducting collaborative knowledge creation?
 ValueCreation
Value CreationStory
Story Business Strategy
Corporate Strategy 55Key
KeyThemes
Themes Governance
Governance RelatedData
Related Data

To be a company people and society want to exist

Honda’s Vision
Value Creation Process We create the joy and freedom of mobility and

TRANSCEND
become the power that supports individuals
who start moving toward their dreams

To enable people to
transcend the various
constraints of time and place

Internet of Things Carbon Neutrality of Power Units

How we move you.

(IoT)/Connected

Five Key Factors of Automated Driving (AD)/

Advanced Driver-Assistance
Our Initial Focus System (ADAS)
The power of dreams, how we move you.
Energy Management
Resource Circulation
System
Recognition of the
External
Crea
Environment
tio
n
of
So
Creation of ci
Innovative
Brand
CREATE
a

Technologies
Value
l

Enhancement
an

To realize the mobility

d

Honda dreams of with the

Ec

Zero creativity as the key

Environmental
Key Themes Human
on

AUGMENT
Impact Capital
Management
omi

Acceleration/ Zero
Intensification of Traffic
To augment
Environmental people’s possibilities
c value

Honda Collision
Change Philosophy

Resource Input
Financial Capital
Human Capital
Manufacturing Capital

DREAMS
Intellectual Capital
Natural Capital
Social and Relationship Capital

Driven by the power of each individual’s dreams. Honda Report 2023 7

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Corporate Strategy
Value Creation Story and Growth Strategy
(1) Defining Materiality and Company-Wide Objectives for the Achievement of “Vision” and
“Value Proposition”
In order to create the “joy and freedom of mobility” that we aspire to, it is essential for the entire organization to

We aim to expand our economic

clearly define key challenges and targets to be prioritized. Each individual working at Honda should use these as
guiding principles, driving together with full force towards the same direction. Taking this perspective into
value by pursuing social value account, and acknowledging the swift changes in the environment, along with the enhanced clarity of our
and chart a new growth “vision” and “value proposition” achieved through the redefinition of our global brand slogan, we have opted to

trajectory as a company. reassess the most critical challenges that we had previously identified, grounding them in the framework of the
materiality matrix. We will strive to enhance the effectiveness and speed of initiatives by reorganizing the
important themes, materiality, and associated goals that we will particularly focus on in the future.
We have selected the new key themes by systematically identifying and prioritizing societal issues extracted
comprehensively from the perspective of sustainability, aligning them with Honda’s direction. Specifically, in
addition to “environment” and “safety” which have long been highlighted as important themes in our
management, we have chosen “people” and “technology,” which drive Honda’s growth, as well as “brand” that
encompasses all corporate activities — our five non-financial indicators as important themes. We align these
aspects with our financial strategy to effectively generate both social and economic value. Furthermore, within
the realm of non-financial indicators, we have defined the materiality that should be addressed for each theme.
This approach helps us clarify the areas we need to focus on to achieve our vision.
To ensure we achieve our materiality, it is crucial to execute strategic planning and resource allocation with a
Director
Executive Vice President and medium to long-term perspective, even within a rapidly changing and highly uncertain environment, without
Representative Executive Officer being overly tied to short-term fluctuations. With this in mind, we have decided to discontinue the previous
Chief Operating Officer
practice of setting three-year midterm goals and instead establish achievement targets on a 5-year and 10-year
Shinji Aoyama
horizon. We will clearly define key goal indicators (KGIs) and key performance indicators (KPIs) for the milestones
to be reached in each phase of 2025 and 2030, reinforcing management governance by regularly monitoring
the progress of initiatives by the leadership team. This approach will enhance the effectiveness of initiatives and
Toward the Embodiment of Value Creation facilitate their rapid implementation towards the achievement of materiality.
Honda aims to embody the values of “Transcend” and “Augment,” achieving “zero environmental impact”
and “absolute safety,” thereby creating the joy and freedom of mobility in the era of electrification. Honda Materiality Assessment Process
seeks to continuously be the “power” that supports people around the world who are trying to do things
STEP 1 STEP 2 STEP 3 STEP 4
based on their own initiative.
Comprehensive extraction Prioritization and selection Identification of Setting initiatives and
While we recognize that achieving environmental and safety objectives is our duty as a mobility of social issues from a of important themes materiality, management actions toward achieving
sustainability standpoint based on Honda’s vision indicators and objectives materiality
company, we must consciously sidestep any notion of trade-off where our pursuit of environmental and for each important theme
Based on SDGs, disclosure We prioritize and select We formulate specific
safety initiatives compromises economic value. Instead, we are committed to intensifying our endeavors standards like GRI areas to focus on, in For each important theme, initiatives and actions
standards and SASB, as alignment with Honda’s we define specific toward achieving the
guided by the principle of trade-on, aiming to enhance economic value through the pursuit of social value. well as external evaluation vision, “to create the joy challenges to focus on as target values set for each
This strategy paves the way for a fresh path of growth for the company, highlighting the importance of criteria such as S&P Global and freedom of mobility,“ materiality, and set materiality.
CSA, social issues are among the social issues indicators and target values
pursuing both societal and economic value. comprehensively
extracted in Step 1. to measure their
extracted.
achievement.

Honda Report 2023 8

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Corporate Strategy

Target
Important Themes Materiality Management Indicators (KGI*1) Approach and Direction of Efforts
2025 2030

10% or We have established ROIC target for 2030, complementing the

ROIC - previously disclosed ROS target for 2025. By fortifying our business
higher
Financial Economic Value • Improvement of capital efficiency structure, we intend to boost cash generation capabilities. Our objective ➡p.12
Consolidated
Indicator Enhancement • Sustainable growth of cash flows is to uphold an optimal equilibrium between strategic resource Financial Strategy
7% or allocation for transformation and shareholder returns, with the aim of
ROS -
higher achieving sustainable growth and enhanced capital efficiency.

➡p.55
By embodying Honda’s brand value through high-quality products Brand Value
Brand Value • Enhancement of consistent brand Brand Value*2 Enhancement｜
Consolidated (Unpublished) and services, and through consistent brand management in all
Enhancement management (Interbrand research) Enhancement of
corporate activities, we aim to enhance brand value.
Consistent Brand
Management

Reduction rate of CO2 emissions

Consolidated - 46%
from corporate activities

Consolidated To remain a company people and society want to exist globally, we ➡p.27
• Challenging climate change issues Total CO2 emissions from products (Unpublished)
Realization of Zero /Business are committed to thorough efforts in environmental preservation. To Realize a Zero
• Challenging energy-related issues
Environmental We aim for zero environmental impact in the lifecycle by 2050 Environmental Impact
• Efficient utilization of resources
Impact Society through initiatives such as “carbon neutrality,” “clean energy” and Society｜
• Biodiversity conservation Waste reduction rate - 14.5%
Consolidated “resource circulation” through electrification of the products, etc. Environmental Strategy
(compared to
BAU*3)
Water intake reduction rate - 14.5%

Non-
Financial With the philosophy of pursuing the safety of all people in a mobility
•D evelopment of technology to capture and ➡p.37
Indicator Realization of Zero Traffic fatalities society, we aim to achieve zero traffic collision fatalities involving
complement human intention To Realize a Zero Traffic
Traffic Collision involving automobiles Consolidated (Unpublished) Honda’s motorcycles and automobiles worldwide by 2050 through
• Safety education and awareness activities Collision Society｜Safety
Society in Japan and the United States the evolution of advanced safety technology and expanded safety
• Building a transportation ecosystem Strategy
education.

• Activating associates’ intrinsic motivations 50% or 60% or

higher higher Under the belief that the integration of diverse individuals who take
and fostering the integration of diverse ➡p.42
Evolution of on challenges driven by their “dreams” leads to the creation of the
individuals The Evolution of Human
Human Capital Associate engagement score Consolidated value Honda aims to provide, we promote various initiatives.
• Ensuring both quantitative and qualitative (Percentage of positive Capital Management｜
Management Additionally, we strive to ensure that human rights are not violated
sufficiency of human resources in priority responses) Human Capital Strategy
in any of our corporate activities.
business areas

➡p.8
Corporate Strategy
Creation of
• Establishing competitive advantage in Ability to create intellectual We define five key factors to focus on at present for the evolution of ➡p.51
Innovative Consolidated (Unpublished)
focus areas property mobility and promote technological development. Creation of Innovative
Technologies
Technologies｜Challenges
in New Fields

*1 KGI: Key Goal Indicators overseen by the Board of Directors

KPIs overseen by the Executive Council are detailed in each strategy page, etc.
*2 Brand Value: The monetized value of a brand as disclosed by Interbrand
*3 BAU: Business As Usual based on production plans

Honda Report 2023 9

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Corporate Strategy

(2) Ongoing Focus on the “Five Key Factors” Toward Building a Robust Value Chain with Honda as the Hub
In our important theme of “Creating Innovative Technologies,” we have defined the following five key factors With the global rise in environmental awareness, the electrification of power units and the advancement of
as the technological areas to focus on for the immediate future. software, the nature of the value chain surrounding mobility is undergoing significant changes. Particularly in
the realm of EVs (Electric Vehicles), it’s imperative to promptly address novel challenges, such as ensuring stable
・Carbon neutrality of power units (electrification/hydrogen) production and procurement of batteries, securing essential minerals used as raw materials, cost reduction and
・Resource circulation the technological development of next-generation batteries. Moreover, initiatives centered on resource
・Energy management system circulation such as the use of sustainable materials are crucial. These not only ensure the steady supply of vital
・AD/ADAS*1 minerals but also lead to reductions in CO2 emissions. We recognize that the importance of such endeavors will
・IoT/Connected only continue to grow in the future.

By pursuing advanced and innovative technologies in each area, we aim to enhance the added value of
In an era where the surrounding business environment is rapidly diversifying and becoming more complex,
while keeping Honda’s proprietary technology and know-how at the core, we believe it’s essential to form a 裏表紙
mobility. Furthermore, through the synergy of the technologies developed in each domain, we strive to provide robust value chain through collaborations with other companies that possess strengths distinct from Honda’s.
continuous value tailored to the mobility life of each individual customer.*2 This approach can generate synergistic benefits and further accelerate our efforts towards new value creation.
*1 AD: Automated Driving, ADAS: Advanced Driver Assistance Systems We have already been advancing collaborations in areas like battery production, resource procurement,
*2 Please refer to Business Strategy (➡p.15-) and 5 Key Themes (➡p.27-) for an overview of initiatives in each area.
hydrogen projects and energy services. Moving forward, by actively expanding even more strategic
partnerships, we aim to build a sustainable and competitive business foundation.
Mobility Honda Strives For

Strong Value Chain with Honda as a Hub (Battery Area)

Zero traffic collision fatalities Zero environmental impact
Carbon neutrality
of power units Aim to build a sustainable business foundation and strengthen competitiveness through strategic partnerships

IoT/ Resource

Connected
Connected
Key circulation Procurement

Factors
Energy
Joint venture for production
AD/ Energy
ADAS management
Joint venture for development
Materials
Strategic investment/Joint development
Honda will continuously provide value to our customers by giving attentive consideration
Development / Production
to the mobility needs in the lives of each individual customer.

Resources

Recycle Energy service

Honda Report 2023 10

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Corporate Strategy

Striving for Enhanced Lifetime Value

With the rapid advancements in electrification and digitization, there’s a shifting paradigm in the value of
mobility. Traditionally, under the “sell off the hardware” business model, a new vehicle’s value was at its peak at
the time of purchase, declining over the years. However, as the demand for software areas, represented by
automated driving, driver safety assistance systems and digital services, continues to grow, there’s an emerging
We aim for corporate management
perspective that the value of mobility can be enhanced post-purchase through software updates.
Through IoT and connected technologies, as mobility becomes interconnected with other mobility
centered on “dreams” and “speed” by
solutions and transportation infrastructure, it becomes possible not only to prevent accidents before they occur advancing management operations.
but also to provide personalized, up-to-date digital services. This means that future mobility will be able to
“grow alongside the customer.”
Furthermore, mobility is expected to generate new value beyond merely being a means of transportation,
serving as “energy storage.” Initiatives in the energy services sector, utilizing the power supply capabilities of
electric mobility through home charging and public charging, will ensure that even when not in motion,
mobility continues to evolve into an entity that benefits people in various aspects of their lives.
Through the fusion of hardware and software, we aim to continually deliver value to our customers over an
extended lifecycle and grow alongside them as partners. Instead of focusing solely on “mobility,” we are
committed to accompanying each individual in various aspects of their lives, providing personalized and diverse (3) Advanced Management Operations to Support Value Creation
values consistently. By upholding these two principles, we strive to enhance the lifetime value from a long-term As the surrounding environment undergoes significant changes, the key challenges in our management
perspective. strategy have also become increasingly sophisticated and complex. While Honda is committed to focusing
on the aforementioned five crucial themes to drive the evolution of mobility and the transformation of our
Evolution of Mobility through Digitalization business, it is essential to further advance our management operations themselves to dynamically and
デジタルによるモビリティの進化 swiftly promote large-scale initiatives towards this significant transformation. From this perspective, we’ve
Evolution with a Focus on the OMO (Online Merges with Offline) World decided to drive the company-wide key challenges set at the beginning of the term through a “cross-
departmental task force” led directly by the management members. We’ve established a system under
direct management control that allows for a swift PDCA (Plan-Do-Check-Act) cycle.
Excellent User Experience
Anchored in Digital
Delivering Diverse Value
In addition to establishing the “Electrification Business Development Operations” this fiscal year, we have
by Connecting with
Various Things and
also significantly reorganized the corporate functions and regional operations. This reorganization aims to
Matters
optimize our management resources as a whole. Furthermore, we have abolished the operating officer system,
consolidating the roles of officers in charge of each business and function into executive officers, thereby
1st 2nd 3rd
clarifying accountability and enabling swift execution. In addition, in line with the previously mentioned goal of
The products serve as a terminal that enables the continuity of UX*1,
which means that even if the vehicles are changed, the UX remains to exist. constructing a robust value chain with Honda as the hub, we are steadily advancing the establishment of an
Evolution of Hardware Evolution of Services internal system to strengthen alliances that supports smooth collaboration with other companies.
Providing
Products
For Honda to remain a company people and society want to exist, we believe that two elements are
Software and Services to
Update Enhance Customer paramount: the diverse “dreams” rooted in individual intrinsic motivations, and the “speed” to manifest
CONNECTED via OTA*2 Experience

V2X※3 Connected
them through technology and ideas. We aim to magnify the power of each individual’s dream and swiftly
Connected/Behavioral Data Analysis Service
translate it into value. With this vision in mind, we are committed to continually elevating our management
Mobility
Service

operations to greater heights.

*1 UX: User Experience
*2 OTA: Over The Air, technology to update a vehicle’s software through wireless communication
*3 V2X: Vehicle to X, technology for communication and coordination between vehicles and various objects

Honda Report 2023 11

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Financial Strategy
Initiatives for Increasing Corporate Value

Through strategic resource Increasing Corporate Value

allocation in accordance with Sustainable growth of cash flows and improved capital efficiency
the business transformation through the utilization of financial and non-financial capital

phase, we aim to realize

enhanced corporate value. ① Strategic resource allocation according to the business transformation phase ③ Dialogue
Concrete and accelerated transformation through goal-setting and strategic resource
allocation for each phase of business transformation
Resource allocation according to the business transformation phase
Executive Officer
Chief Financial Officer
Chief Officer, Corporate Capital generation Resource investment Shareholder returns
Management Operations • Improved operating cash • T ransformation of the • Stable and consistent Enhancing
flow business portfolio dividends quality and
Eiji Fujimura • S trengthened funding/ • Investment decisions • Flexible share buyback transparency of
capital management based on capital costs management
• T ax management through active
dialogue

Initiatives for Increasing Corporate Value

To support this transformation, the entire Honda company is united in our effort to “strengthen our business ② Strengthening governance and risk management
constitution” and we have been implementing measures aimed at improving our profit structure.
Strengthening management by considering capital costs
In FY2023, due to worsening business conditions, including the impact of cost increases from Management decisions taking into account the diversification of uncertainties and risks
Strengthening accounting/finance functions and renewal of the processes
semiconductor shortages and inflation, as well as higher quality related expenses, company-wide operating
profit margin (ROS) was an austere 4.6%. However, in motorcycle business operations, ROS reached 16.8%,
an all-time record high. In automobile business operations, the break-even point based on production
capacity improved significantly from approximately 90% to roughly 80%, contributing to revenue protection Performance Trend
when production is reduced. Through such efforts in each business segment, we are confident that we are ■ Operating profit (left axis) ■ Free cash flow (excluding financial business) (left axis) ■ Shareholder returns (left axis)
making steady progress in improving our profit structure and are aiming to achieve a company-wide ROS ■ Share buyback (left axis) ■ ROS (right axis)

target of 7% or more by FY2026. In terms of financial foundation, continuing from FY2022, we generated (Billions of Yen) (%)
free cash flow at the level of 700 billion yen. This not only secured funds to support the transformation, but 1,000 10.0

also enabled us to declare an annual dividend of 120 yen. Furthermore, exercising a flexible capital policy, we 871.2
800 780.7 7.0 or 8.0
conducted two share buybacks totaling 170 billion yen during the year. 726.3 higher
678.1 685.8
Given the significant changes in the business environment as well as an increase in the types of risks, 660.2
613.5 633.6 6.0
600 5.5 6.0
including geopolitical risks, it has become crucial to leverage both financial and non-financial capital to attain 470.6 5.0
4.6 4.6
4.2
sustainable growth of cash flows and enhance capital efficiency, thereby boosting corporate value. As a Chief 372.1
400 4.0
Financial Officer, I believe it is crucial to: 1) clearly define goals for each phase of business transformation and 292.0 303.8
267.0
257.6 170.0
execute strategic resource allocation, 2) ensure reliable execution, strengthen governance and conduct 62.1 96.2 189.9 60.7
200 2.0
appropriate risk management, including the strengthening of capital cost-conscious management and 3)
engage in active dialogue with stakeholders to enhance the quality and transparency of management. 0 0
2019 2020 2021 2022 2023 2024 2026 (FY)
By meticulously executing these missions one by one, we will realize the transformation in what we call the (Forecast) (Target)

company’s second founding and Honda will continue to be a company that our shareholders want to exist.
Honda Report 2023 12
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Financial Strategy

Initiatives for Increasing Corporate Value through Phase-specific 2030s: “Growth of EV Business and Creation of New Value” Phase
Goals and Strategic Resource Allocation We will establish the company’s second founding by expanding the growth of EV business and creating
To establish cash generation capabilities through new value creation, we will categorize our management new value. We set the ROS target for the EV business at 10% or higher and strive to achieve a sales ratio of
plan into phases of transformation and set specific quantitative goals to drive our initiatives forward. While 100% for EV / FCV by 2040, ensuring the sustainable growth of cash flow. To realize the creation of new
the PBR (Price-to-Book Ratio) has fallen below 1x, it is crucial to establish a capital return that exceeds the value, we will stably allocate an annual research budget of around 100 billion yen to fundamental research
capital cost (ROIC) at an early stage. Additionally, as we aim for “a continual value provision that aligns with areas, focusing on carbon-neutral technologies such as the application of intelligence technologies,
the mobility needs of each individual customer’s life,” we believe that leveraging both financial and non- advancement of battery-related technologies, utilization of hydrogen, and sustainable materials.
financial resources, and ensuring sustained growth of cash flows over the long term, are crucial.
Goals for Each Phase of Business Transformation
Up to 2025: “Strengthening Business Resilience of ICE*1 Product Operations and Investment in 2025 2030
EVs” Phase
Moving towards 2025, we will sequentially introduce EVs tailored to each region. However, in the phase up
Growth of EV business and creation of
to 2025, ICE vehicles will continue to be the core of our sales. From a financial standpoint, as we allocate new value

resources to EVs in order to transform our business portfolio, we will concurrently concentrate on enhancing Strengthening the business resilience of Transition from ICE vehicles to EVs
ICE vehicles operations and allocation
the business structure of ICE vehicles, with the objective of achieving a company-wide Return on Sales (ROS) of resources to EVs 10% or higher
5% or higher
of 7% or higher. Strengthening the profitability of our automobile operations is particularly challenging, but Profitability
(ROS) of EV
we will build upon the business structure we’ve developed through initiatives like the introduction of Honda business
Architecture*2, consolidated planning, reducing the number of derivatives of our global models and operations
ROIC of
optimizing production capacity. We will also work on strengthening our supply chain, including securing a ROS of 7%
10% or
or higher
higher
stable supply of semiconductors, to recover our automobile sales volume and steadily enhance profitability.
Having built a robust financial foundation through the enhancement of a solid business structure with these
initiatives, we will steadily allocate resources to EVs. Furthermore, by achieving a company-wide ROS of 7%
or higher, we will realize an ROIC that exceeds capital costs.
*1 ICE: Internal Combustion Engine Strategic Resource Allocation
*2 Honda Architecture: System architecture connecting computers, sensors, actuators and other components in automobiles

Accelerated resource
investment for EV growth
Up to 2030: “Transition from ICE Vehicles to EVs” Phase ICE Vehicles
Building a Production System for Over 2 Million EVs Annually on a Global Scale
Electrification/ Resource
In the period leading up to 2030, we will intensify the allocation of resources to expedite the growth of EV business Software allocation for
and attain self-sufficiency in the EV business. By 2030, our objective is to establish a global production capacity EVs

exceeding 2 million EVs, while striving for an EV/FCV sales ratio of 40% in developed countries. We will expedite New Fields Steady investment for new value creation
strategic investments that foster the growth of EV business, including the advancement of next-generation batteries
like semi-solid-state batteries and all-solid-state batteries. We will also bolster the EV production system through the
transformation of our global production system and develop Honda’s distinctive vehicle operating system (OS), Shareholder
Returns Stable and continuous dividends + Flexible share buyback
which facilitates the post-sale evolution of vehicle features and services post-vehicle sales. Furthermore, we will
2021-2025 2026-2030 2031-
broaden our range of EV offerings, primarily in both motorcycles and automobiles, while elevating market
competitiveness. While there might be an impact from temporary upfront investments, our goal is to bolster the
cash generation capability of our ICE (Internal Combustion Engine) business, allocate resources to support
transformation, sustain a return on invested capital (ROIC) surpassing the cost of capital and aim for an ROS (Return
on Sales) exceeding 5% for the EV segment, along with a company-wide ROIC surpassing 10% by 2030. Honda Report 2023 13
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Financial Strategy

Returning Profits to Our Shareholders conducted through various events and individual meetings. Through these dialogues, our management
Concerning the distribution of our results, we regard returning profits to our shareholders as one of the team will gain direct insights into the expectations and interests of the capital markets. We consider this
foremost management priorities. This determination is made by factoring in internal reserves intended for feedback from stakeholders as highly valuable and will integrate it into our management approach, thus
future growth and the overall performance of the consolidated business, all of which are assessed from a contributing to a further augmentation of corporate value.
long-term standpoint. Regarding dividends, using a consolidated payout ratio of 30% as a reference, For specific information regarding our dialogue achievements in FY2023 and the ensuing feedback
we are committed to achieving steady and consistent dividend payments, capitalizing on Honda’s within the company, we invite you to visit our official website (https://global.honda/en/investors/policy/
inherent strengths in generating cash while accelerating resource allocation for transformation. For governance.html).
FY2024, we intend to raise the dividend to an unprecedented level of 150 yen*1. Furthermore, on May 11, We appreciate your ongoing support and look forward to your anticipation of the continuous
2023, our board of directors approved a share buyback program amounting to 200 billion yen. In line with enhancement of Honda’s corporate value.
our goal of enhancing capital efficiency and implementing flexible capital policy, we will judiciously
proceed with the repurchase of our own shares. ROIC Tree ICE Vehicles BEV (Battery EV)
*1 On August 9, 2023, during a board of directors meeting, a resolution was passed to execute a stock split at a ratio of 3
Improvement of Expansion of sales UX evolution to
shares for every 1 share, with September 30, 2023, as the designated record date. Following this stock split, adjustments profit through strengthening accommodate
were made to the dividend forecast. However, the annual dividend forecast of 150 yen, as announced on May 11, 2023, Increase in Increase in diversification of values
attributable to the supply chain,
operating marginal
remains unchanged based on the pre-stock split standard. the owners of
profit profit
including stable Offering a new brand value
the parent procurement of through the integration of
company semiconductors software and hardware

Strengthening Governance and Risk Management Business

ROIC
Foundation of business
constitution through initiatives
Reform of the production
In an era of significant transformation, our objective is to enhance governance and infuse management Control of
such as Honda Architecture,
system to “State-of-the-
consolidated planning,
fixed costs Art BEV Manufacturing
practices with a heightened awareness of capital costs. This approach will empower us to respond flexibly reduction of global model
Facility”
derivatives and optimization
and effectively to evolving environmental dynamics, ultimately elevating our corporate value. We will of production capacity

employ the ROIC framework to seamlessly connect on-ground initiatives with company-wide objectives. Maximization of profit
Improvement of equity- Realization of joint
through the optimal
Our efforts will focus on optimizing profits, the numerator in ROIC, while enhancing the denominator— method investment gains
utilization of existing assets
venture alliance synergy

deployed capital*2—through prudent utilization of retained assets and strategic investment discernment, ROIC*3
thus enhancing capital efficiency. Concerning our financial services business, where funding predominantly Optimization of tax payments Proper tax management

relies on liabilities, we will apply the ROE metric to strike a balance between profitability and stability. This
balanced approach will maximize capital efficiency and lend support to our transformative endeavors. Increase in
Improvement of working Optimization of inventory
Optimization of working
turnover of capital in the new value
When it comes to resource allocation, given the substantial uncertainties stemming from economic capital turnover assets
deployed capital*2 chain

trends, shifts in environmental regulations and technological breakthroughs, the necessity of substantial Improvement of Optimization of existing
ROA Improvement of fixed asset assets Investment decisions
investments for transformation becomes evident. As a risk management strategy, we are committed to Financial
turnover conscious of capital costs
ROE Minimization of
identifying decision triggers and making investment choices while considering capital costs. Financial Leverage
investments

Effective use and proper

Strengthening of global cash management
management of on-hand funds

Active Dialogue with Stakeholders *2 Deployed capital: Shareholders’ equity attributable to the company’s shareholders + Interest-bearing liabilities (excluding those
We firmly believe that increasing corporate value goes beyond merely outlining a roadmap for sustainable from the financial business sector). Deployed capital is calculated using the average of the beginning and end of the period.
*3 ROIC: Net income attributable to the parent company owners + Interest expenses (excluding financial businesses) /
cash flow growth and improved capital efficiency. It also entails ensuring that Honda’s prospects are well Deployed Capital
comprehended in the capital markets.
To achieve this, a fundamental requirement is that our stakeholders, including shareholders and
investors, have an accurate understanding and a positive regard for our management direction. Taking
proactive measures, our management team will engage in more active dialogues than ever before,

Honda Report 2023 14

 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Electrification
Business Strategy Strengthening
We are vigorously promoting electrification in all areas of motorcycle, automobile and power products. In
pursuit of the early independence of our electrification business, we have established a specialized organization
Competitiveness in for swift decision-making in 2023. With this organizational structure at its core, we will further enhance Honda’s
Electrification unique appeal, cultivated through the pursuit of advanced and innovative technologies in the “Five Key Factors.”
By providing competitive products and services that realize “transcend various constraints associated with
Technologies at Honda mobility and the augment people’s possibilities,” we aim to further enrich the lives of our customers.

Honda will Continue to Promote Electrification through Unique Products and Services
We have always embodied the “joy of driving” in all categories of automobiles, Honda strives to meet diverse customer needs as the world’s top manufacturer
from family cars to sports cars. We’ve refined our technology by serving as a of motorcycles in a carbon-neutral society that emphasizes electrification. Our
“driving laboratory” and by participating in various races, including F1. As a result, mission is to deliver the joy of mobility to global customers who require versatility,
we have honed our technologies and fostered a corporate culture that prioritizes from daily commuting to long-range touring and beyond. We aim to address
uncompromised driving and meets challenges head-on. Electrification is not a loss their needs with innovative ideas and technologies. As we navigate the era of
of the identity of “Honda, the engine specialist,” but rather a “steppingstone” that electrification, Honda is actively addressing technological challenges, ensuring that
elevates the joy of controlling at will, a pleasure we have built up thus far, to a batteries and charging methods will cater to all user profiles. To illustrate, Honda
higher level. To deliver the joy that comes from transcending constraints of has introduced the EM1 e: electric scooter in Japan, equipped with the Honda
movement and the augmenting people’s possibilities that beyond electrification, Mobile Power Pack e: portable and swappable battery. This model is set to debut in
Honda will never stop challenging ourselves. Europe and Indonesia by the end of FY2024.
In the lineup, we will introduce BEVs in succession, that is, tailored to each Honda is actively developing plug-in rechargeable models. Furthermore, we
regional characteristics beginning in 2024. In North America, we have the Honda aim to harness digital technology to strengthen our bond with customers,
Prologue and Acura ZDX, developed in collaboration with General Motors (GM); in enhancing the convenience and joy that motorcycles bring to their lives.
China, the e:NS2, e:NP2 and mass-production models based on the e:N SUV 序 In the power products sector, we’ve consistently delivered products that
concept; and in Japan, a commercial-use mini-EV model based on the N-VAN. In enhance the work and lives of individuals globally, echoing our founder’s vision of
the Asian region, Honda will lead the electrification of emerging markets, deriving joy from aiding others. As we look to the future, we will our commitment
launching two compact EVs, including an SUV model, in 2026. Furthermore, we will remains steadfast: to provide a diverse range of products that drive people while
efficiently and vigorously promote electrification on a global scale, launching a embracing the electrification challenge in domains like small-scale construction
global model founded on our original platform beyond 2025. We will continue to equipment, gardening and marine equipment, all in pursuit of a carbon-neutral
diversify our offerings, introducing flagship and sports models and producing society. Additionally, we are exploring new value avenues within Honda’s
highly competitive BEVs from our “state-of-the-art BEV manufacturing facility.” electrification business strategy, including the automation technology for work
Moreover, our vision extends beyond the traditional hardware-centric value of equipment.
automobiles. We aim to introduce new and unique value through digital services, Please look forward to the next generation of Honda, which will lead the
energy solutions and enhanced car interiors, leveraging advanced software industry and manufacturing not by simply following big changes in the market,
technology. but by initiating transformations on its own in this period of great electrification.
To deliver these attractive products, Honda will enhance the “resonance
Senior Managing between strong personalities,” a core element of the Honda’s DNA. And we will
Executive Officer also optimize our value chain, spanning development, production, sales and
Chief Officer, Electrification
Business Development service, through “individual challenges and co-creation activities.”
Operations
Katsushi Inoue Honda Report 2023 15
 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Automobile Business Strategy

Business Overview/ Revenue Highlights Electrification Business Strategy

Delivering Attractive Products and Services to the World Direction of the Electrification Business Strategy
“Let’s change the landscape of the automobile industry.” In 1963, inspired by this rallying cry, Honda’s The advancement of electric mobility is an initiative that stands as the cornerstone of our mission to
automobile business began and has since expanded to offer products to customers in diverse regions achieve a society where “all individuals can feel the joy and freedom of mobility.” As we amplify our
worldwide. Evolving the cultivated “joy of driving” that Honda embodies, aligning with the changing times endeavors to realize “zero environmental impact and zero traffic collision fatalities”, addressing mobility-
and relentlessly pursuing the development of innovative technologies within the “Five Key Factors,” our related challenges, our commitment to the “Joy of Driving” – a principle Honda has cherished since its
goal is to achieve the realization of value in delivering “the transcendence of various constraints of founding – remains unwavering. Moreover, we aim to offer every customer “Surprise, Excitement and
movement and the augmentation of people’s possibilities.” Trust” by introducing fresh mobility experiences. It is sustained by the “Joy of Using” and the “Joy of
Connection,” facilitated by connectivity and intelligence that align with the ever-evolving.
Revenue Highlights of the Automobile Business
■■ Sales (left axis) ■■ Operating profit (left axis) ■■ Unit sales (right axis)

(¥100 million)

120,000 112,877
(thousands of units)

6,000
Medium- to Long-term Targets
107,817
101,946
100,000 5,323 87,793 93,605 5,000 By 2030, our goal is to set up a global BEV production system that produces over 2 million units annually.
4,790 By 2040, we aim for a sales ratio where 100% of our global sales comprise EVs and FCVs.
4,546
80,000 4,350 4,000
4,074
3,687
3,000

4,000

2,096 2,362
2,000 1,533
902
-166
0 0
2019 2020 2021 2022 2023 2024 (FY)
(Forecast)

Recognition of the External Environment / Key Challenges

In the BEV market, it’s not just traditional automobile companies making a mark. Various manufacturers
from different industries are now introducing a wide variety of BEVs, ranging from budget-friendly to
premium models. As customer needs and values diversify, it’s becoming increasingly challenging for Honda
to differentiate its BEVs by traditional strengths like engine performance and other.
This highlights an urgent need for Honda to carve out a distinct identity in the BEV market, rooted in its
unique value and UX.
With electrification on the rise, there’s an anticipated surge in demand for minerals like nickel, lithium
and cobalt, all essential for battery production. This has raised concerns about potential skyrocketing
battery prices due to possible shortages in these raw materials. Honda is taking proactive measures against
such risks, especially in parts procurement, including batteries. Our focus is on promoting recycling, reusing
materials and incorporating sustainable materials, aligning with the vision of a resource circulation.
Moreover, we recognize the imperative to cultivate a flexible and resilient organizational structure for
more rapid decision-making in order to swiftly transition our business focus towards electrification.
Honda Report 2023 16
 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Automobile Business Strategy

The Direction of the Product Lineup and Future Product Region Products to be introduced

Development Strategy • In 2024, Honda will introduce the “PROLOGUE,” while Acura will unveil the “ZDX,” both of which are
North co-developed with GM.
America • In 2025, Honda will launch a mid- to large-sized EV incorporating a new E&E architecture*, built on
We view the shifts in business structure, value propositions and production processes in the BEV era as an Honda’s dedicated EV-specific platform.
opportunity to deliver a new value through UX in tune with diversifying customer values. As we pioneer
• The “e:NS2” and the “e:NP2” are set to launch in early 2024.
new value propositions for electrified vehicles, our products will reflect the “spirit of sporty car-making” • A mass-production model inspired by the “e:N SUV 序” concept, which was unveiled at the Shanghai
China
inherent in Honda’s DNA. Furthermore, by globalizing our product lineup, we aim to drive product Motor Show in April 2023, is scheduled for release by the end of 2024.
• Including these three models, a total of 10 EV models will be introduced by 2027.
development with a compelling brand message.
• An N-VAN-based commercial-use mini-EV model will be launched in the first half of 2024.
Japan • Following this, an EV based on the “N-ONE” will debut in 2025. Two compact EVs, including an SUV
model, are slated for release in 2026.
• The “e:Ny1,” a model from the “e:N” series for the European market, will be launched sequentially
Europe
across European countries starting in the fall of 2023.

* E&E architecture: Integration of Electrification and Electronics Technologies (Electrification & Electronics Architecture)

Europe China
North America

e:Ny1 e:NS1 e:NP1

Japan
Acura ZDX Type S

N-VAN-based commercial-use mini-EV

Honda e
PROLOGUE

e:N SUV 序 / e:NS2 Prototype / e:NP2 Prototype / e:N GT Concept

Honda Report 2023 17

 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Automobile Business Strategy

Toward the Early Independence of the Electrification Specific Initiatives

Business Battery Strategy
To achieve early autonomy in the BEV business, we are committed to addressing the following themes: We will address the rapid pace of electrification by formulating a variety of battery procurement strategies
・Initiate an allocation strategy with the battery as the focal point to bolster our business structure, to meet both current and anticipated needs.
emphasizing management resource allocation. Beyond our procurement of liquid lithium-ion batteries, we plan to initiate mass production of
・Evolve the UX to align with the diversifying values of customers. batteries in North America by 2025 through a joint venture with LG Energy Solution Ltd, aiming to
・Broaden customer touchpoints and augment service offerings through a lifecycle-centric approach. establish a new value chain. For the procurement of essential minerals, we have formed partnerships with
・Forge a new brand identity by merging software and hardware, inclusive of establishing a digital service Hanwa Co., Ltd. and POSCO Holdings Inc. Additionally, we collaborate with Ascend Elements, Inc. and
infrastructure. Cirba Solutions, LLC in the recycling sector.
・Enhance production efficiency and value by introducing a global model. From the late 2020s, we will not only advance our liquid lithium-ion batteries but also develop and
・Lay the groundwork and advance technology for an information infrastructure that paves the way for a introduce next-generation batteries, including semi-solid-state and all-solid-state varieties. To enhance the
sustainable society. performance of our liquid lithium-ion batteries, we will collaborate with GS Yuasa Corporation to develop
high-capacity and high-power versions specifically for EVs, supporting Japan’s rapid electrification.
Initiatives in the Battery Area Furthermore, our investment in SES Holdings Pte. Ltd. will bolster the joint development of semi-solid-state
batteries. Our goal is to produce batteries that are safe, have high capacity and exhibit increased durability.
Facilitate R&D with development partners and build multi-layered measures to address diverse scenarios
Regarding all-solid-state batteries, we’re ramping up efforts to initiate a demonstration line in Sakura City,
Tochigi Prefecture by 2024, targeting a market launch by the late 2020s.
All-solid-state Battery (Originally developed)

Charging and Infrastructure Strategy

Semi-solid-state Battery (Jointly developed)
We are actively working on expanding charging services in line with our growth in the BEV market. To
promote the adoption of EVs in North America, seven companies, including Honda’s U.S. subsidiary,
(Jointly developed) American Honda Motor, BMW Group, GM, Hyundai, Kia, Mercedes-Benz Group and Stellantis N.V., have

Liquid Lithium-ion Battery

agreed to form a joint venture. Their goal is to establish a high-capacity EV charging network across the

(Production Joint
U.S. and Canada. The first charging station is slated to open in the U.S. by the summer of 2024, with
Venture) subsequent expansions focusing initially on metropolitan areas and major highways.
The station will feature multiple high-output DC chargers compatible with all vehicles adhering to
charging standards such as CCS*1 and NACS*2. With environmental considerations in mind, all power will
be sourced exclusively from renewable energies. The initiative aims to deploy at least 30,000 chargers
across the U.S. and Canada, establishing a high-power recharging network that is user-friendly for EV
drivers. For home charging, we will utilize Honda Smart Charge, an established EV charging service in
North America, and plan to gradually introduce smart energy services that leverage the power supply
capabilities of EVs.
*1 CCS: Combined Charging System
*2 NACS: North American Charging Standard

Honda Report 2023 18

 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Automobile Business Strategy

Specific Initiatives

SW (Software) Strategy BEV Production System

Under the “Software-Defined Mobility” concept, which delineates the value of both hardware and services, In response to the rapid electrification worldwide, we are advancing the establishment of an electric
we are accelerating our software development. Specifically, Honda is advancing the E&E architecture and vehicle production system globally within Honda. In North America, Honda has identified its three existing
developing its unique vehicle OS, aiming for its adoption in the mid-size and large EVs set to launch in plants in Ohio (Marysville and East Liberty, which produce automobiles, and the Anna Engine Plant, which
North America in 2025. Using this vehicle OS as a foundation, Honda will continue to evolve its in-vehicle manufactures automobile powertrains) as central locations for EV production. While utilizing these
software, offering advanced functions and services even after the vehicle purchase. Furthermore, we will existing facilities, we are constructing efficient and highly flexible EV production lines.
swiftly provide digital services highly compatible with BEVs, centered on safety, comfort and reliability. Moreover, with an eye on the EVs set to launch in the late 2020s, we have initiated the transformation
These services, designed with a focus on UX, will be offered under a unified management, including of our production system towards a “state-of-the-art BEV manufacturing facility.” We will approach this
user-friendly charging guidance and other appealing features. transformation from the following three perspectives:
Regarding the proprietary development of software in areas such as vehicle OS, AD/ADAS, UX and
digital services, we plan to double our recruitment of skilled professionals specializing in advanced 1）Evolution of factories capable of producing products with strong appeal efficiently and flexibly, and the
software. We will also actively bolster our collaborations with partners to amplify our capabilities. Through establishment of a supply chain.
our partnership with SCSK Corporation, we will merge Honda’s system control and safety control 2）Development of production lines that prioritize automation and intelligence to adapt to future
technologies with SCSK’s IT expertise. This synergy aims to maximize the potential of engineers from both workforce shifts.
companies, offering continuous training and skill enhancement. Furthermore, by deepening collaborations 3）Transition to production processes that emphasize resource circulation, with a commitment to
with development partners like KPIT Technologies Limited and by pioneering initiatives in fields like minimizing CO2 emissions to the greatest possible extent.
electrification and ADAS with Hitachi Astemo, Ltd., we seek to fuse Honda’s strengths in control and safety
technologies with the software development prowess of our partners, thereby realizing the new value that In anticipation of higher production volumes post-2030, we aim to offer competitive BEVs with
software can bring. significant product appeal and price competitiveness through the global expansion of the state-of-the-art
In the realm of digital services, we aim to enhance software development to consistently provide BEV manufacturing facility.
outstanding user experiences (UX) from the customer’s perspective. To achieve this, we have appointed
the CEO of Drivemode, Inc. as the new Global UX Officer, centralizing decision-making authority.
Strengthening of the EV production
Advancements in Software Technology
Production Sites in Ohio, the U.S.

Vehicle
operating
system UX
AD/ADAS Digital service
Data analysis

Electric PT*1 IVI*2

control
Enhancement of software development
capabilities

Strengths of Honda Strengths of each partner company

Marysville Auto Plant East Liberty Auto Plant Anna Engine Plant
Control and Safety Technology Software development capability
Establishing a highly efficient and flexible production system using hub locations for EV production in North America

Enhancement of recruitment efforts for skilled

personnel in advanced software development

Striving for the rapid realization of the new value brought by software

*1 PT: Powertrain
*2 IVI: In-Vehicle Infotainment Honda Report 2023 19
 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Automobile Business Strategy

ICE Business “Hybrid Evolution” Masayuki Nakatsuka

Advanced Safety System Software
Alongside the acceleration of electrification, we remain committed to continuous development, ensuring Development Department
Advanced Safety and Intelligent
we deliver attractive products to customers who choose ICE vehicles. Solution Development Division
Software Defined Mobility Development Unit
We’ve implemented the Honda Architecture, which distinctly differentiates between the “common
Electrification Business Development
components” and “unique components” for each vehicle model, in the full redesign of the CR-V and Operations
BEV Development Center
Accord. Building on this foundation, we will persist in advancing this initiative. By merging a “Modular Engaged in the development of
behavior generation software for the
Architecture with Unified Components and Layout” with the “Shared Utilization of BEV Advanced bipedal robot “ASIMO,” and primarily
Technologies,” we aim to extend state-of-the-art features, including advanced safety technologies, to ICE involved in research and system
development related to autonomous
vehicles as well. Starting in 2026, these features will be incorporated into our core model lineup for driving assistance.
Favorite motto
worldwide expansion. Furthermore, with the introduction of a lightweight platform, next-generation “As the rice plants bear fruit, they bow
their heads.”
power units and electric AWD, we commit to delivering superior environmental performance and
Honda-ism which he has empathy
enhanced dynamic capabilities. “For the sake of the world and others, is
there anything we can do?”
From a business perspective, we will accelerate the standardization of lineups and powertrains
globally to enhance business efficiency and establish a complementary structure, including production
across various regions. Interview ––––––––––––
To swiftly address evolving customer needs, we will continue to deliver appealing products by
implementing measures such as shortening development timelines and utilizing derivative series. Alleviating Concerns Related to Accidents and Introducing the
Exhilarating Transformation of Mobility to Society
Mobility possesses a profound ability to generate time. Guided by this notion, I found myself captivated
by the mobility concept and deeply moved by the principles of the founder, Soichiro Honda. My decision
to join Honda was driven by a desire to be a part of the legacy he had established. Shortly after becoming
a member of Honda, I engaged in developing motion generation software for the bipedal robot “ASIMO”
at the Fundamental Research Institute. Within this environment, associates discussed technology and
aspirations equally, just as I expected. Nevertheless, I sensed a disparity with my personal aspirations. My true
aspiration was to harness my engineering expertise to contribute towards eradicating traffic accidents.
During that period, the automated driving project was initiated, and I enthusiastically volunteered to be
CR-V ACCORD (for North American market) a part of it. Once assigned, my role has been centered around aiding drivers and minimizing the possibility of
accidents as much as possible. My primary focus lies in the R&D of Advanced Driver Assistance Systems (ADAS).
In more recent times, I have dedicated myself to crafting driver assistance systems for situations where
the driver’s condition becomes abnormal, with the capability to halt the vehicle if the driver’s condition
deteriorates.
When I initially joined, senior colleagues often posed the question, “What do you want to do,
Nakatsuka?” In retrospect, I believe they were assisting me in discovering my genuine desires. Honda is an
organization that unites associates’ ambitions. I firmly believe that the potency of this grassroots method
forms the bedrock of Honda’s resilience and vigor.
Mobility that enables us to travel long distances in a short amount of time, experiencing a variety of
things—an evolution of the “time machine,” so to speak. I aspire to create a society where we can enjoy the
thrill and joy of this advancing dream tool without the worry of traffic accidents.
Honda Report 2023 20
 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Motorcycle Business Strategy

Business Overview/Revenue Highlights

Unveiling New Possibilities in the Motorcycle Market Revenue Highlights of the Motorcycle Business
■■ Sales (left axis) ■■ Operating profit (left axis) ■■ Unit sales (right axis)

The motorcycle business is foundational to Honda, deeply rooted in its origins. Through a manufacturing (¥100 million) (thousands of units)
30,000 29,089 30,000
approach tailored to each country and region, Honda has grown into a premier manufacturer with a
global network of over 30,000 dealers and 35 manufacturing bases for finished products. With an annual 25,000
21,852
25,000
21,001 20,593
worldwide sales volume of approximately 20 million units, we capitalize on this extensive network, 20,000 20,000
17,872
20,238
platform design and a global supply complementation system. This has enabled us to craft products that 19,340 18,757 19,180
15,000 17,027 15,000
showcase Honda’s unique appeal and exceptional cost competitiveness, thereby maintaining a notably 15,132
4,887
profitable business framework. 5,000 10,000
2,916 2,856 3,114
By addressing the universal “mobility needs” of customers and uncovering new opportunities within 2,500
2,246 5,000
the motorcycle market, we aim to lead the industry and become the foremost global motorcycle company.
0 0
2019 2020 2021 2022 2023 2024 (FY)
(Forecast)

PIONEER1000-6 DELUXE CREW GL1800 TRX420

XL750TRANSALP CB750HORNET

RX125

PCX Rebel250

Activa

ACE CB125
BeAT

Pop110i CG160 Biz125 NXR160 Bros ESDD

Honda Report 2023 21

 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Motorcycle Business Strategy

Recognition of the External Environment / Key Challenges Electrification Business Strategy

Towards a Business for the New Era Direction of Electrification Business Strategy
The motorcycle market is anticipated to sustain its expansion, particularly in emerging countries characterized Honda motorcycles address the global “mobility needs” of a diverse clientele and enjoy widespread use. Leveraging
by burgeoning young populations. Additionally, global environmental regulations are undergoing tightening, our competitive manufacturing technologies and the expertise amassed through the development of internal
and environmental awareness is growing as governments establish electrification targets not only in developed combustion engine (ICE) vehicle platforms, we will embark on crafting an array of electric motorcycle platforms
nations but also in emerging economies like India and Southeast Asian countries. catering to the demands of customers across different nations. Through streamlined manufacturing processes, we
The electrification of mobility is expected to be a solution, while on the other hand, the demand for electric are committed to leading the worldwide electric motorcycle electrification movement, ensuring that electric vehicles
vehicles in emerging countries is significantly influenced by government incentives. Moreover, challenges provide the same exhilarating “joy of mobility” as their ICE counterparts, all at a more accessible cost.
persist on the infrastructure side, including stable power supply and the development of charging networks. To cater to the myriad needs across the globe, we are not only focusing on electric products intended for business
Amidst the uncertainties related to the shift to electric vehicles, we will optimize resource allocation by use within somewhat restricted contexts but are also actively designing solutions for personal use across a multitude of
identifying markets where demand for ICE vehicles persists and where electrification is progressing. We will scenarios. For personal-use models, the ability to select the most suitable battery type in accordance with usage
harness Honda’s strengths to distinguish ourselves from emerging electric vehicle manufacturers. environments and convenience holds paramount importance. To empower customers to opt for their preferred battery
type, we are poised to offer two options, including swappable and plug-in battery, catering to a diverse range of demands.

Business Targets (Our Initiative’s Pathway)

Leading Environmental and Safety Innovations: “More Medium- to Long-Term Targets

Convenience, More Freedom” By 2026, we intend to globally introduce a total of 10 or more electric motorcycle models, with the goal of achieving
Motorcycles serve as vital transportation means in emerging countries, particularly across the Asian region, annual sales of 1 million units. By 2030, we aim to further expand the lineup and target sales of 3.5 million units.
contributing significantly to people’s lives and serving as essential components of social infrastructure. To this
end, Honda recognizes the importance of providing products at price points accessible to customers. We will
sustain a superior level of cost competitiveness by consistently driving cost reductions through platform design
Specific Initiatives
enhancements that enhance production efficiency and the expansion of a global supply complement.
Moreover, we are poised to intensify our engagement with customers through digital technology. Through Advancing Electrified Product Development
this approach, we will vigorously promote and extend the convenience and enjoyment that motorcycles bring to We are poised to enter the market with a focus on business-oriented models that are witnessing escalating
people’s lives. demand aligned with the principles of SDGs (Sustainable Development Goals) and ESG (Environmental, Social,
Furthermore, in pursuit of a secure and safe mobility society, we will persist in our worldwide deployment of and Governance) management. Among these models, the BENLY e:, GYRO e: and GYRO CANOPY e: stand as
driving safety education, a commitment we have upheld over an extended period. Additionally, by broadening prime examples of business-oriented offerings, each equipped with the Honda Mobile Power Pack e: portable
the array of models equipped with advanced braking, LEDs and other safety technologies, we will deliver and swappable battery technology. The BENLY e: is now being manufactured not only in Japan but also in
enhanced “convenience and freedom” to a broader spectrum of customers. Thailand. Furthermore, these Thai-produced BENLY e: models are made available both for Thailand and for
To address environmental concerns, we will export to Vietnam.
accelerate our endeavors to achieve carbon neutrality,
transcending mere electrification. Our efforts will
encompass enhancements in fuel efficiency within the
internal combustion engine (ICE) realm and technologies
compatible with bioethanol fuel, all while adapting to the
distinctive features of different regions.
Benly e: GYRO e: GYRO CANOPY e:

Honda Report 2023 22

 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Motorcycle Business Strategy

In addition to these business-oriented models, we introduced the EM1 e: as a personal-use model in Promoting a Battery-Sharing Service
Japan in 2023. Our plans include expanding its presence into Europe and Indonesia, along with unveiling a The popularity of electric motorcycles hinges on the resolution of concerns regarding battery cost,
new model in India. Our focus remains on accelerating the development and launch of electric motorcycles charging infrastructure and cruising range. As a targeted solution to these challenges, we have innovated
tailored for individuals, particularly in the burgeoning Asian region where demand for electric motorcycles is the Honda Mobile Power Pack e, a portable and swappable battery. We introduced a battery-sharing
on the rise. service initiative in 2022, using the swappable battery technology. To facilitate this, we have established
local subsidiaries in both India and Indonesia. In Japan, in April of 2022, ENEOS Holdings, Inc. and the four
major Japanese motorcycle manufacturers (Honda, Kawasaki Motors, Ltd., SUZUKI MOTOR CORPORATION
and Yamaha Motor Co., Ltd.) jointly incorporated Gachaco, Inc. We plan to further expand and develop
this business in the future.

EM1 e:

We are concurrently engaged in the development of plug-in charging system products featuring fixed
batteries, foreseeing a spectrum of customer applications and evolving market conditions. Our
commitment endures in technological development that cater to the diverse needs and lifestyles of our
global customer base, delivering a variety of battery and charging method options.

Procurement and Production Strategy Enhancing the Foundation of Business Structure

We are strategizing the ideal distribution of production resources for electric motorcycle components
Enhancing Adaptability to Environmental Shifts
—battery, PCU and motor—to match demand. Among the crucial markets in Asia, we will focus on
expanding in India and Indonesia. Amidst profound transformations in the market landscape, encompassing escalating raw material and
Furthermore, we are contemplating the next-generation batteries designed for electric motorcycles, energy costs alongside growing societal expectations for environmental and safety considerations, Honda
emphasizing high output, elevated energy density and extended lifespan, all while ensuring the is heightening its competitive edge by striving for an adaptable framework poised to navigate
paramount safety of this vital battery component. environmental fluctuations. Tangible endeavors include component sharing, expedited development of
To aptly serve the needs of diverse regional markets, we are propelling rapid development to furnish mass production, cost innovation through the utilization of cost-effective catalysts and the establishment
battery systems tailored to distinct usages, encompassing NCM-based (nickel-cobalt-manganese) and of a resilient supply chain embracing risk diversification. These actions collectively amplify efficiency across
LFP-based (lithium-ion iron phosphate) solutions. the entirety of the value chain, ensuring enduring profitability while fortifying the bedrock of our
leadership in the electrification domain as we fervently pursue an augmented presence.

Honda Report 2023 23

 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Power Products Business Strategy

Business Overview / Revenue Highlights Recognition of the External Environment / Key Challenges

Providing Products for Work and Daily Life Toward Realizing a Work Environment “Beneficial to
The power products business was inaugurated in 1953 with the
Humanity and the Planet”
introduction of versatile general-purpose engines. These engines, Against the backdrop of increasing environmental regulations, there is a growing shift towards electrification in the
serving as power sources, found utility in diverse work equipment domain of small-scale construction equipment and gardening, particularly in the realm of “small-scale” and “short-
applications. Alongside this, we embarked on the development, duration operation” products.
manufacturing and commercialization of complete machines (work Conversely, the demand for internal combustion engine (ICE) products persists, fueled by their attributes such as
equipment) featuring these engines. “high power output and extended operation hours” and their “cost-effectiveness,” well-suited to specific applications.
Our diverse product lineup garners widespread adoption across Thus, Honda comprehends the imperative to cater to the diversified market demands, adroitly steering its
global clientele, culminating in the noteworthy milestone of environmental endeavors in the ICE sphere even as it maintains an unwavering focus on electrification.
surpassing 170 million units in cumulative power product production, Escalating labor shortages have instigated an ongoing quest for enhanced operational efficiency through
commemorating our 70th anniversary in 2023. mechanization, elevating the imperative for “attaining superior work efficiency of high quality,” irrespective of the
Expanding beyond engine-centric offerings, our present power power source at hand. In this light, there emerges a tangible necessity for products and services that cater to this
products business is set to encompass portable batteries and product scenario, presenting improvements in precision and technological advancements in work equipment, including
electrification, broadening its horizons to become a business that automation.
“bestows novel value upon mobility and the everyday lives of individuals.”
Business Targets (Our Initiative’s Pathway)
Revenue Highlights: Power Products and Other Businesses Enriching Lives Through Technology, Sustaining Prosperity and Delight
■■ Sales (left axis) ■■ Operating profit (left axis)
Operating profit (excluding aircraft and aircraft engines) (left axis) ■■ Unit sales (right axis)
Since its founding in 1948, Honda has navigated its course under the guiding belief of “enhancing lives, even in small
(¥100 million) (thousands of units)

6,000 6,301 6,200 6,500

ways” and “serving people through technology.”
5,701 5,623 5,645 6,000 Aligned with these enduring ideals, the power products business perseveres in its commitment. It seeks to
5,500
5,000
4,750 address societal challenges by proffering products and services that globally inspire individuals to realize their
5,000
4,217 4,764
4,000 3,772
4,500 potential. This aspiration will be realized through the delivery of Honda’s hallmark high-quality, appealing offerings—
3,506 3,418 4,000
products and services tailored to regional characteristics and dynamic market shifts.
3,000
Concerning the cornerstones of our ICE business—the pivotal power units—our trajectory entails the continuous
2,000
enhancement of their environmental performance. In the construction sector, where our engine sales hold
substantial sway, we shall fortify the promotion of electric power units while concurrently offering installation
1,000
486 support. This endeavor will also extend to initiatives for bolstering operational efficiency and catering to corporate
293 172 207 242 228
0 0
demands. In the gardening domain, our efforts are directed towards propelling the electrification of lawnmowers
-109 -116 -94 brush cutters and analogous tools. Simultaneously, in the marine equipment domain, our scope expands as we
-250
-1,000
2019 2020 2021 2022 2023 2024 (FY)
diversify our lineup of sizable outboard motors to match the ever-growing market requirements.
(Forecast)

Operating Profit of Aircraft and Aircraft Engines Business Included in Total Operating Profit

FY 2019 2020 2021 2022 2023

100 millions of yen -402 -422 -323 -337 -257

Electrified power unit eGX Large outboard motor BF250

Honda Report 2023 24
 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Power Products Business Strategy

Electrification Business Strategy Leveraging our strengths in the gardening domain, meticulously nurtured through attributes like the

Direction of Electrification Business Strategy “precise cutting“ ability and “endurance” of our walk-behind lawnmowers, we have solidified our presence.
Alongside the consumer-oriented “Miimo” robot lawnmower, we are exploring products integrated with
The electrification business strategy underscores the power products business’ resolve to address societal connected technology aimed at enhancing work efficiency for corporate clients. As we drive efficient
challenges by introducing Honda’s innovative value through product electrification. This commitment is development and production methodologies, we are poised to accelerate electrification, with external
poised to enhance both people’s “work quality” and “life quality.” partnerships as a potential avenue. In the marine equipment domain, we are embarking on the initiation
Within the realm of electric product development, our focal point resides in the electrification of small- of demonstration trials for electric propulsion systems designed for small watercraft, anticipating future
scale construction equipment and gardening domain. Additionally, we are set to extend the reach of the regulations pertaining to the utilization of internal combustion engines in lakes.
“Honda Mobile Power Pack e:,” a portable and interchangeable battery introduced in the motorcycle
business, to the sphere of power products.
In the small-scale construction equipment domain, our strategy revolves around leveraging our
established B2B customer base from the core business to promote electrification. We will support the
electrification of finished equipment manufacturers through the sale and installation assistance of the
electric power unit “eGX.” Beyond existing clientele, our efforts encompass the expansion of product
integration to regions anticipated to adopt electrification in the future.

Robot lawnmower “Miimo” Electric propulsion for small boat

(overseas model) prototype

Enhancing the Foundation of Business Structure

Cultivating Agility to Accommodate Diverse Demands

Honda Mobile Power Pack e: Komatsu Ltd.’s PC01E-1 Electric Micro Excavator
Equipped with Honda Mobile Power Pack e:
While flexibly responding to the diversified needs of different countries and regions, we will assess the
market entry for ICE products, leverage synergistic benefits with the motorcycle business and pursue
efficient operations in the development and production areas such as component sharing, production
optimization and procurement streamlining. Through these efforts, we aim to enhance product appeal in
the production realm as well and strengthen the business foundation for electrification. At the same time,
we will enhance environmental performance through improvements in fuel efficiency and technologies
compatible with carbon-neutral fuels. This will enable us to offer even more competitive products and
services.

Honda Report 2023 25

 Value Creation Story Business Strategy
Business Strategy 55 Key Themes
Themes Governance Related Data

Power Products Business Strategy

Akifumi Fukaya
Power Products Electrification Business
Planning Department
Electrification Business Planning Division
Motorcycle and Power Products
Electrification Business Development Unit
Electrification Business Development
Operations
Responsible for electric product and
business planning for Power Products.
Stationed at American Honda from
2019, returned to Japan in 2022.
Favorite motto
“Try everything with grit.”
Honda-ism which he has empathy
“Work for yourself first.”
“Eliminate no play, no error.”

Interview ––––––––––––

Bringing Honda Products that Wholeheartedly Cater to People,

to the World
Throughout my childhood in the United States, Honda products were ubiquitous. The sight of the
Honda logo in a foreign land instilled courage in me, even as a child. With the goal of advancing the
brand in the U.S., I embarked on my journey in overseas sales for Power Products. From introducing
new models of general-purpose engines to my current role in spearheading the development of
electric lawn and garden equipment, my focus has been on expanding demand.
During my tenure at American Honda, the swift proliferation of the COVID-19 pandemic led to
an environment of uncertainty. In such times, I gleaned valuable insights from my supervisor, who
consistently worked hard prioritizing what was happening on-site. He would visit sales locations
after meetings and offer support on the production floor. Additionally, I found inspiration in the
commitment of local team members who approached their work from a customer-centric viewpoint,
addressing critical needs. Honda boasts a workforce that upholds the “Three Reality Principle”
regardless of race or nationality. Navigating crises alongside such colleagues has become a cherished
asset in my personal and professional journey.
My dream is to explore diverse regions around the world, broadening my perspective and
making contributions to Honda’s American operations from a managerial role.
While the company’s strategies may adapt to the changing world, the core values of Honda
remain steadfast. My goal is to uphold the aspirations of those who paved the way before me, while
also relentlessly pursuing my own dreams. Through this journey, I aim to create products that
enhance people’s lives and bring richness to their experiences.

Honda Report 2023 26

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

To Realize a Zero Environmental Impact Society Environmental Strategy

Initiatives to Achieve Zero Environmental Impact

Triple Action to ZERO An Integrated Approach to Achieving Zero Environmental

For people to live on Earth in a sustainable manner, Honda seeks to realize a society with zero
Impact
environmental impact throughout the lifecycle of its products and corporate activities by 2050. Promoting Life Cycle Assessment (LCA)
Efforts will be centered around the Triple Action to ZERO program, which integrates three elements— Honda recognizes the importance of taking an integrated approach to realizing zero environmental
carbon neutrality, clean energy and resource circulation—within a single initiative. impact throughout the product lifecycle, from mining raw materials to product disposal. This focus involves
The three elements are closely related. As such, rather than promoting them independently, we aim to both reducing CO2 emissions and resource recycling, etc.
maximize synergistic benefits by considering their linkages. By promoting LCA, Honda will calculate lifecycle CO2 emissions in all areas of its corporate activities,
We recognize that the promotion of Triple Action to ZERO will also lead to the acceleration of visualize the effects of CO2 emission reductions and accelerate response to reducing carbon emissions at
initiatives in international frameworks and a stronger focus on the Nature-based Solutions (NbS) that are the development stage and reducing environmental impact by recycling resources.
attracting increasing interest from stakeholders. Honda will continue its efforts to reduce the environmental impact of its products throughout their
lifecycles.

Net zero CO2 emissions

To address climate change issues,

Honda will work toward a target of
achieving net zero CO2 emissions
from corporate activities and
throughout the product lifecycle to
limit the global average
temperature rise to 1.5ºC above
pre-industrial levels.

100% utilization of carbon-free energy 100% use of sustainable materials

To address energy issues, Honda aims to use To address the effective utilization of resources,
clean energy during product use and corporate we will strive to develop products and establish
activities. systems that use sustainable materials with no
environmental impact. In corporate activities, we
aim to achieve zero industrial water intake and
zero industrial waste at Honda plants by 2050.

Honda Report 2023 27

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

To Realize a Zero Environmental Impact Society | Environmental Strategy

Carbon Neutrality and Clean Energy Initiatives

Reducing CO2 Emissions in Corporate Activities Reducing CO2 Emissions in the Area of Products
As part of our response to climate change and energy issues, we will We will reduce CO2 emissions during product use by introducing innovative environmental technologies,
promote the improvement of production efficiency, implementation of such as electrification, to become carbon neutral, diversify energy sources and implement total energy
energy-saving measures, shifting to low-carbon energy and use of Improvement of management initiatives. The electrification of products represents an important initiative that contributes
production efficiency
renewable energy to achieve our CO2 reduction target for 2030 in terms to addressing climate change and pollution issues through cleaner emissions. We have set a target for
of reducing the total CO2 emissions of our corporate activities. electric products sales ratio in 2030 in each of our businesses and are accelerating our efforts while
Implementation
Moreover, through the establishment of CO2 reduction technologies of energy-saving expanding and upgrading our product line-up to solve and contribute to social issues and expand business
measures
and the use of clean energy through the utilization of renewable and opportunities.
other energy sources, Honda will make its Automobile Plant of Saitama In the motorcycle business, we will drive the global electrification, particularly in the key markets of
Factory in Japan Honda’s first carbon neutral plant in FY2026. Shifting to low-carbon India and Indonesia, through attractive products that use Honda’s unique technologies as the world’s
energy
In developing these initiatives globally, we are also building a leading manufacturer.
system to promote information sharing between business sites and In the automobile business, we aim to increase the sales ratio of EVs (electric vehicles) and FCVs (fuel
regions. Use of renewable cell vehicles) to 100% globally by 2040; all automobile products to be launched in 2040 will be carbon-
energy
Through these initiatives, we aim to achieve carbon neutrality in free, and by 2050 we aim for carbon neutrality throughout the entire lifecycle of our products.
automobile production in the late 2030s. In addition, we aim to achieve In the power products business, through the electrification of our products, we will address societal
net zero CO2 emissions in corporate activities in 2050. challenges by delivering new value from Honda and contribute to improving people’s quality of work and life.

Target to Achieve Zero Environmental Impact

Reduction rate of total CO2 Target for 2030 Target for 2050
emissions from corporate activities
(compared to FY2020) 46% Net zero CO2 emissions

List of Environmental Targets➡p.35

EM1 e: Honda e HRG466XB

Target to Achieve Zero Environmental Impact

Target for 2030 Target for 2050

Sales ratio of Motorcycles Automobiles Power products
electrified products
15% 30% 36%
Reduction rate Target for 2030 Net zero CO2 emissions
of CO2 emissions
intensity of product Motorcycles Automobiles Power products
use (compared to
FY2020) 34.0% 27.2% 28.2%
List of Environmental Targets➡p.35

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Resource Circulation Initiatives

Our Commitment to the Initiatives
Since its founding, Honda’s manufacturing processes have taken into consideration the need to reduce the
consumption and disposal of limited global resources and ensure resources are used effectively.
Demand for resources continues to grow against a backdrop of global population growth and
economic development, and the risk of resource depletion is expected to increase as more resources are
consumed. In addition, resource extraction consumes a significant amount of energy. This mass-production
and mass-consumption lifestyle is also recognized as a social issue, and a shift to a circular economy is
required.
In response to these social issues, Honda is actively utilizing recycled resources while working to
stabilize the procurement of materials, including important minerals. At the same time, we will contribute
Creative Solution Center
to the reduction of CO2 emissions and energy consumption by researching advanced recycling
technologies and promoting the establishment of a circular value chain, thereby contributing to a circular
economy. We will continue our efforts to establish a circular economy.

Resource Circulation Concept Diagram

Business Innovation Circular Design

Transition from Mass Consumption to Applying Sustainable Materials and
Circular Business Model Product Design to Achieve Resource
Extraction Reduction

Resource
Circulation
Clean Carbon
Energy Neutrality

Advanced Recycling Circular Value Chain

Energy-Efficient, Low-Carbon, Circular Value Chain for Achieving
Cost-Effective, Advanced Recycling Data Traceability Advanced Recycling
Technologies
Information Management System as
the Foundation of the Circular Economy

参考PPT＝英文Frutiger 和文たづがねゴシック＜統合報告書使用書体

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Resource Circulation Initiatives

Effective Utilization of Resources through Corporate Activities Effective Utilization of Resources in Product Areas
Being aware of the potential for corporate activities to impact upstream and downstream water resources, Honda aims to achieve 100% use of sustainable resources (sustainable materials) with zero environmental
Honda is also focusing on conserving water resources. impact by 2050 to free manufacturing from resource constraints and continue to provide mobility value to
customers, and create new joys.
Waste, etc. Throughout the product lifecycle, from resource procurement to product disposal, we are working
Honda is working to reduce waste in our corporate activities, focusing on the risks associated with resource toward a shift from mass consumption, in which products are disposed of immediately after use, to
depletion and environmental pollution. We are working on the 3Rs (reduce, reuse, recycle), including recycling, by developing products with designs that are easy to dismantle and replace, and by using our
resource reduction, such as reducing the amount of scrap materials produced during manufacturing products and parts for secondary purposes. We are taking on the challenge of creating a system to reduce
processes, and are aiming to achieve our target of reducing total waste generation by 14.5% compared to waste and recycle resources.
BAU in all corporate activities in 2030. In addition to actively utilizing recycled materials and ensuring the stability of our material
procurement, Honda is also striving to establish a circular value chain that promotes advanced recycling
Water Resources practices. This includes forming a consortium for dismantling and optimizing the logistics of products and
Honda selects areas where harmonious coexistence with nearby water sources is viable and conducts its resources for high efficiency. To achieve this objective, we are actively partnering with other companies for
corporate activities in compliance with host countries’ environmental assessment laws and regulations. We further initiatives.
also promote various green initiatives, such as using recycled water to minimize water intake. We will also focus on building a traceability system that enables the visualization of lifecycle CO2
We recognize the water supply risk that affects our businesses and the depletion risk that impacts local emissions and facilitates the understanding of the state of deterioration of products and components that
communities. As such, we have established the target of reducing the total water intake by 14.5% is necessary for the efficient use of resources.
compared to BAU in all corporate activities in 2030.

Target to Achieve Zero Environmental Impact

Target to Achieve Zero Environmental Impact Target for 2030 Target for 2050

Target for 2030 Target for 2050 Product resource circulation Use of sustainable materials
Reduction rate of total waste
Set internal milestones
generation in corporate activities 100%
(compared to BAU) 14.5% Zero industrial waste

Reduction rate of total water Target for 2030 Target for 2050 List of Environmental Targets➡p.35
intake in corporate activities
(compared to BAU) 14.5% Zero industrial water intake

List of Environmental Targets➡p.35

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For Biodiversity Conservation

Basic Approach
Honda benefits from the use of natural resources in its corporate activities. In addition to procuring raw Assessment of Biodiversity Priorities at the Company’s Production Sites
materials, Honda depends on and affects a great deal of natural capital throughout its value chain, from
R&D to manufacturing, use and disposal.
Legend
Honda recognizes biodiversity conservation as an important issue for global environmental conservation ■ Higher-scoring sites (highest priority)
in Honda’s Environmental Statement, and has defined the harmonization of biodiversity conservation with ■ Medium-scoring sites (priority)
corporate activities as a basic approach. ■ Lower-scoring sites (other)

Honda has endorsed the principles of the Taskforce on Nature-related Financial Disclosures (TNFD) and
has participated in its activities, the TNFD Forum, since December 2022. The Company is committed to
proactively disclosing information and will continue to further accelerate its environmental conservation
efforts.

Priority Analysis for Biodiversity Conservation

Honda uses the methodology recommended in the beta version of the TNFD to assess the potential for its Results of the Primary Assessment of Biodiversity Impacts of Products
corporate activities to impact biodiversity. We use the Integrated Biodiversity Assessment Tool (IBAT), a
biodiversity assessment tool, at our own production sites. Others Natural rubber
(tires) Calculation Conditions
The Company surveys its own 86 production sites worldwide within a 50 km radius of each site to · Evaluation vehicle:
determine their proximity to areas inhabited by any endangered species noted on the IUCN*1 Red List. To Compact electric vehicle
· Energy consumption during production: in
conduct specific biodiversity efforts, Honda uses indicators in IBAT*2, such as the KBA*3, WDPA*4, IUCN Red Japan in 2020
Electricity
List of Threatened Species and STAR, to conduct integrated assessments of the biodiversity risk of the Iron (when driving) · Lifetime mileage: 200,000 km
production sites. Honda will continue to identify priority sites and consider specific efforts to conserve · Inventory data: IDEA v2.3
Nickel
Copper · EINES assessment (biodiversity impact): LIME2
biodiversity.
In addition, products are made from a variety of materials, some of which may have an impact on
biodiversity. Therefore, Honda is engaged in the primary assessment of the impact of materials used in its
products on biodiversity.
Based on the assessment results, the Company will conduct a more detailed analysis of materials that
have a large potential impact on biodiversity and consider methods to reduce the impact of its products on
biodiversity.
*1 IUCN: International Union for Conservation of Nature and Natural Resources
*2 IBAT: Integrated Biodiversity Assessment Tool
*3 KBA: Key Biodiversity Area
*4 WDPA: The World Database on Protected Areas

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Disclosure of Information Based on the TCFD Recommendations

Response to the TCFD Recommendations Strategies

In treating responses to climate change and energy-related issues as crucial in the environmental field, in Climate change has wide-ranging impacts, not just on the automobile industry but on people’s living
April 2021, Honda announced, its vision to “realize carbon neutrality for all products and corporate environment and lifestyles too. To evaluate and examine the impacts of climate change on business,
activities Honda is involved in by 2050.” Hence, we have declared our support to the Task Force on Climate- Honda utilizes a scenario analysis noted in the TCFD recommendations. This scenario analysis takes 2030 as
related Financial Disclosures (TCFD), established by the Financial Stability Board (FSB), as well as disclosing the target year and identifies climate change risks and opportunities for Honda under multiple scenarios,
information based on the information disclosure framework recommended by the TCFD. The including a net-zero scenario. The identified risks and opportunities are reflected in our corporate strategy,
recommended disclosures for the core elements of the framework - Governance, Strategy, Risk together with the strategies of each business.
Management and Metrics and Targets - are listed at the end of the relevant text. We will continue to
promote the disclosure of information related to climate change, while conducting scenario analysis on Scenario Analysis Overview
climate change risks and opportunities and reflecting the results in our management strategies. Honda has defined multiple scenarios – including 1.5°C and 4°C scenarios – to assume a progressive
worldview and to envision applicable changes to the business environment in the future. Our scenario
analyses on the motorcycle, automobile and power products businesses have identified various risks and

Governance opportunities for each, based on the transition and physical risks and opportunities described in the TCFD
recommendations. TCFD Strategy Recommendation a
Monitoring System by Directors Based on the risks and opportunities identified, we have carried out an examination of the degree of
As climate change may have a significant impact on Honda’s business performance as a whole, we hold impact on financial conditions over the short-, medium- and long-term. A failure to make an appropriate
annual World Environment and Safety Strategy Committee meetings. The Committee monitors long-term response to the anticipated events as described by each scenario will pose a risk to our business.
policies, targets, strategies, and progress related to climate change and other environmental and safety Nonetheless, we are undertaking initiatives so that we can generate new business opportunities by
issues. The total CO2 emissions reduction targets set by the Committee are reported to and supervised by advancing Honda’s technologies, products and services. In order to minimize damage or the risk of
the Board of Directors. Please refer to “Remuneration Structure for Directors and Executive Officers” (➡p.61) incurring damage caused by a natural disaster, we will promote the establishment of a stable production
to understand our remuneration structure for Directors and Executive Officers, which takes into account structure via a robust global value chain. From 2023, Honda has started operating an internal carbon
ESG aspects. TCFD Governance Recommendation a pricing (ICP) system to further accelerate the reduction of CO2 emissions at its Japanese business sites. The
carbon price is set at 15,000 yen per metric ton of CO2, while the amount of carbon reduction is converted
Roles of Top Management Members into a monetary value that can be utilized as one of the factors when making capital investment decisions.
The World Environment and Safety Strategy Committee is chaired by the CEO, who has ultimate TCFD Strategy Recommendation b
responsibility for addressing climate change issues. The Committee deliberates on PDCA for each region, To achieve more sustainable corporate management, Honda is examining current response measures
the risks and opportunities concerning climate change, energy and resources, as well as the short-, to the aforementioned risks and opportunities and improving the resilience of its strategies. Honda has
medium- and long-term environmental strategies based on them. Global medium- to long-term developed strategies based on multiple scenarios. The Company utilizes these strategies in undertaking
environmental policies and plans are also proposed based on company-wide policies and medium- to business, seeks to reduce risks and create opportunities and promotes resilient products and services.
long-term management plans. In addition, important matters are resolved by the Executive Council and TCFD Strategy Recommendation c
reported to the Board of Directors. TCFD Governance Recommendation b

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1.5 ℃ scenario 4 ℃ Scenario

By using the Net Zero Emissions Scenario (NZE) of the IEA and the IPCC AR6 SSP1-1.9, we have developed our 1.5°C scenario. We have developed our 4°C scenario by using IPCC AR6 SSP3-7.0.
• As part of the 1.5°C scenario, we assume that measures to achieve carbon neutrality by 2050 will be promoted across the world, resulting in the • In the 4°C scenario, we assume that irreversible environmental changes will occur,
widespread use of carbon-free products and renewable energy. leading to more frequent and more severe natural disasters.
• In the automobile industry, we assume even more stringent regulations on fuel efficiency and zero-emission vehicles (ZEVs), and, as a result, producing a
rise in demand for electric vehicles (EVs) and fuel cell vehicles (FCVs) — although mainly in developed countries. Additionally, the transition to a circular
economy is assumed to accelerate.
• Furthermore, in parallel with the tightening of regulations, we assume that customers’ sense of value will shift, with an increasing number developing a
preference for carbon-free products, such as EVs and FCVs, and services too.
• As decarbonization approaches, we also assume advances in renewable energy and energy-saving clean technologies, as well as the growth of their
widespread use.

Key Risks and Opportunities for Honda

Risk Timeframe* Opportunity Timeframe* Response

• Carbon neutrality of power units and enhance the lineup of electrified

• Drop in unit sales of internal-combustion engine (ICE) products
vehicles due to more stringent fuel efficiency regulations ・Allocate proceeds from the issuance of Green Bonds to expenses related to
Policy and regulations and Zero Emissions Vehicles (ZEV) regulations the development and production of electrified products
• Increased costs due to carbon tax and Emissions Trading ・Invest resources in the areas of electrification and software technologies
System (ETS), etc. (approx. 5 trillion yen over the next ten years)
Short- / • I ncrease in sales due to a sales expansion of Short- /
medium- / electrified products and services, including medium- / ・Strengthen external partnerships for liquid lithium-ion batteries (➡p.10, p.18)
long-term EVs and FCVs long-term ・Development of next-generation batteries (➡p.18)
• Drop in sales caused by failure to meet customer demand ・Promote the establishment of an electrified product production system
• Drop in sales caused by changes in consumer behavior (➡p.19, p.23, p.25)
Changes in customers’ (e.g. progress in sharing services and changes in mobility
sense of value preferences) • Create new energy services based on electric mobility (➡p.18, p.23, p.54)
1.5 ℃ • Tarnished corporate images in response to climate change • Introduction of Internal Carbon Pricing
• Promote ESG information disclosure, including climate change-related risks

• Secure and promote research budgets for basic research areas centered on
carbon-neutral technologies (approx. 100 billion yen per year)
• Increase in capital investment costs following the •C
 reating environmental value with recycled • Allocate funding quota for startups in advanced technologies (approx. 10
introduction of renewable energy and energy-saving Short- / resources Short- / billion yen per year)
Changes in technology technologies medium- •D
 rop in business operation costs as markets medium- • Establish strong partnerships with resource-recycling companies (➡p.10, p.29,
• Increased costs due to carbon tax, Emissions Trading System term shift to renewable energy and production term p.30)
(ETS), etc. facilities with higher energy efficiency • Introduction of Internal Carbon Pricing
• Promote carbon neutrality at the Saitama Factory’s assembly plant
• Create new energy services based on electric mobility

• I ncrease in sales of electrified products that • Enhance the lineup of electrified products
More frequent • Drop in sales due to suspension of production resulting
can be used as an emergency power source
4℃ and severe natural from natural disasters, which will damage Honda’s Long-term Long-term • Create new energy services based on electric mobility
when the need for power supply increases
disasters production bases and disrupt its supply chain • Establish a stable production structure through a global value chain
during a disaster

*For a timeframe, short, medium and long mean: less than one year, one to less than three years and three years or longer, respectively.

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Risk Management
At Honda, “climate change-related risks” are positioned as one of the company-wide priority risks, which All risks related to corporate activities are managed within the “Risk Management Committee,” chaired by
include the environmental risk such as stricter environmental regulations, and natural disaster risk such as the company-wide Risk Management Officer. This committee encompasses risks associated with climate
earthquakes, floods, etc. change as well. While ensuring alignment with the company-wide risk management activities, we are
The response to climate change-related risks is being driven by the Corporate Planning Unit, the continuously enhancing environmental management, including climate change-related risks.
responsible department. They are responsible for organizing information on the progress of TCFD Risk Management Recommendation c
environmental measures discussed and coordinated between Business Operations and Regional Regarding the risk assessment and management process within the company-wide risk management
Operations as well as globally relevant themes. For example, regulatory risks are managed not only with activities, please refer to “Governance | Risk Management” (➡p.64, p.65) for more information.
respect to existing regulations but to new ones as well. Regarding the investigation, evaluation and TCFD Risk Management Recommendation a and b
monitoring of the risk of natural disasters, all manufacturing sites are evaluated for water risk using the
AQUEDUCT tool of the World Resources Institute (WRI) and the Water Risk Filter tool of the World Wide Environmental Management Structure, including Climate-Related Risks and Opportunities
Fund for Nature (WWF).
Board of Directors Report Executive Council
The World Environment and Safety Strategy Committee (Secretariat: Corporate Planning Unit), which
Report Report
is in charge of company-wide environmental strategies, is attended by the company-wide Risk
Risk Management Committee
Management Officer and formulates global medium- to long-term environmental policies, targets and Chairperson: World Environment and Safety Strategy Committee
Risk Management Officer Chairperson: Chief Executive Officer Six Region Environmental Secretariat Committee
plans, which are then decided by the Executive Council. In addition, the World Environment and Safety Secretariat: Secretariat: Corporate Planning Unit
Corporate Strategy Division
Strategy Committee confirms progress and performance against key environmental targets and formulates
Report Instruct Share information
policies for addressing issues. Important matters are decided by the Executive Council and reported to the
Board of Directors. North America Regional
Automobile Operations Environmental Committee
Each Business Operation and Regional Office formulates and executes implementation plans based on
China Environmental Committee
the global medium to long-term environmental policies. D Discuss / D
Coordinate Japan Regional Environmental
Each Business Operation establishes an Environmental Responsible Officer and an Environmental Motorcycle and Power Committee
P Businesses C Products Operations P Region C
Affairs Office, creating a cross-functional structure within the respective business operations. With this Asia and Oceania Environmental
Committee
framework in place, they develop and promote business plans that incorporate environmental measures. A A
South America Environmental
Each Regional Operation formulate and execute plans based on information shared during the World Electrification Business Committee
Development Operations
Environment and Safety Strategy Committee as well as the “the Six Region Environmental Secretariat Europe, Africa and the Middle East
Regional Environmental Committee
Committee.” When devising these plans, discussions take place primarily in the “Regional Environmental
Committee,” where alignment is sought among various Operations in collaboration with each other.

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Metrics and Targets

Metrics for Risks and Opportunities Honda’s GHG Emissions TCFD Metrics and Targets Recommendation b
By 2050, Honda is seeking to realize carbon neutrality for all products and corporate activities the Honda believes that calculating and disclosing its greenhouse gas (GHG) emissions as a responsible mobility
Company is involved with. As the world’s largest power unit manufacturer with total annual sales of company is a necessary step for proactively promoting GHG emissions reduction efforts across the world.
approximately 30 million units in the motorcycle, automobile, power product, outboard engine and Given our business characteristics, our value chain produces large emissions, including those from
aircraft fields, we have been working to develop carbon-neutral power sources for a broad range of product use. As such, it is important to calculate and disclose Scope 3 emissions. Consequently, we calculate
products. and disclose emissions from our value chain (Scope 3), in addition to direct (Scope 1) and indirect (Scope 2)
In order to make steady progress toward carbon neutrality by 2050, Honda has defined corresponding Honda emissions.
targets and has been promoting efforts accordingly. For CO2 emissions during product use, a target for CO2 We will continue to identify and manage related data, which will be utilized to implement GHG
emissions intensity has been set for 2030, in addition to the current target, representing global sales share emissions reduction measures.
of electrified products. In the area of corporate activities, we aim to reduce our total CO2 emissions by 46%
from FY2020. To achieve this target, we will promote initiatives to such as improving production efficiency, (million t-CO2e) FY2020 FY2021 FY2022 FY2023
implementing energy-saving measures, shifting to low-carbon energy and the use of renewable energy.
Emissions from the entire value chain 331.2 254.48 280.02 288.23
Additionally, for water resources vulnerable to climate change, we are giving consideration to water
supply risk that affects our businesses, together with depletion risk that impacts areas surrounding our Scope 1 1.24 1.12 1.16 1.09
production bases. Hence, we will undertake initiatives to reduce our industrial water intake.
Scope 2 3.79 3.38 3.14 2.73
TCFD Metrics and Targets Recommendation a
Scope 3 298.09 249.98 275.72* 284.41

Target to Achieve Zero Environmental Impact The definitions of Scopes 1, 2 and 3 are provided in the GHG Protocol.
・Scopes 1&2: Direct and indirect GHG emissions from the corporate activities of Honda Motor Co., Ltd. and its consolidated
TCFD Metrics and Targets TCFD Metrics and Targets subsidiaries and affiliated companies in and outside of Japan, excluding some small companies. See Honda ESG Data Book
Recommendation a Recommendation c p.137 for details.
・The Scope 3 figures are the sum of emissions from categories 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12 and 15.
Target for 2030 Target for 2050 * We changed the calculation method of Scope 3 Category 11 emissions from FY2022. See Honda ESG Data Book p.136 for details.

Reduction rate of total CO2

emissions from corporate
activities (compared to FY2020)
46%
Motorcycles Automobiles Power products
Net zero CO2 emissions
15% 30% 36%
Sales ratio of electrified products

Reduction rate of CO2 emissions Motorcycles Automobiles Power products

34.0% 27.2%
intensity of product use
(compared to FY2020) 28.2%
Reduction rate of total waste
generation in corporate activities
(compared to BAU)
14.5% Zero industrial waste

Reduction rate of total water intake

in corporate activities (compared to
BAU)
14.5% Zero industrial water intake

Use of sustainable materials

Set internal milestones
100%
Product resource circulation

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Tetsuo Hayashi
Automobile Operations Production
Unit
Saitama Factory
Automobile Plant (Yorii)
Plastics Department
Engaged in maintenance of bumper
and instrument panel production
facilities, as well as energy reduction
tasks.
Favorite motto
“Fall seven times, stand up eight.”
Honda-ism which he has empathy
“Light your own torch.”
“Waigaya”

Interview ––––––––––––

Even in the Face of Challenges, if Something Needs to be Done, I Will

Maintenance, improvement and optimization of production facilities for automobile fall under my
responsibilities. Driven by a commitment to uphold Honda’s craftsmanship and operational excellence, I
approach my daily tasks with a strong sense of purpose. In recent years, I have been chosen as a member of
the “Yorii Carbon Neutral Project,” focused on implementing production technologies that reduce
environmental impact and enhance efficiency. My efforts revolve around energy reduction in production
facilities and the transition to carbon-free energy sources. This endeavor aligns with the ambitious goal of
achieving net zero CO2 emissions across all activities by 2050. Each member of the project holds steadfast
determination, asserting, “We will succeed without question,” and “Our present endeavors will benefit the
world in the future.” With unwavering conviction, we transcend organizational boundaries, pooling our
collective wisdom to overcome this formidable challenge.
Reflecting on the past, when I initially joined the company, I didn’t believe I had much to offer. Despite
my boss having high standards, he encouraged me with the words, “This individual has potential.” Driven by
a determination to meet his expectations, after about five years of dedicated effort, he remarked to me one
day, “Your absence in the woods would pose a challenge.” Hearing this filled me with a sense of validation
— to be recognized as indispensable. The progress I’ve made is owed to the support and confidence many
have shown in me. Now, I am committed to reciprocating that support, engaging with juniors and my
responsibilities with a profound sense of gratitude.
My aspiration is to cultivate Honda’s new vehicle production environment while imparting energy
reduction techniques and carbon-free energy substitution know-how to juniors and the community,
thereby enhancing society’s overall energy reduction capabilities. Just as I have done in the past, I am
prepared to step up for tasks, even if they are intricate or challenging, driven by an unwavering belief in
seeing them through to completion. Honda Report 2023 36
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

To Realize a Zero Traffic Collision Society Safety Strategy

Toward a Zero Traffic Collision Society

Honda aims to achieve zero traffic collision fatalities involving Honda motorcycles and automobiles Beyond that, a major challenge for the year 2050 will be fatal accidents worldwide involving
worldwide by 2050*1. As a milestone, Honda aims to halve the number of global traffic collision fatalities pedestrians, cyclists and riders. To address this issue, we will promote R&D of “Safe and Sound Network
involving Honda motorcycles and automobiles worldwide by 2030*2. These targets apply to new vehicles Technology” that supports risk prediction and avoidance before an accident occurs by communicating with
and motorcycles and those already available on the market. everyone sharing the road. Honda aims to achieve zero traffic collision fatalities involving Honda
Honda safeguards against accidents caused by various factors by evolving and combining three motorcycles and automobiles by 2050.
elements: Human Ability (awareness-building activities), Mobility Performance (technological
development) and the Traffic Ecosystem (collaboration with others and system/service development). Trends in Fatality Rates Involving Automobiles per 10,000 Vehicles Owned
As a result, in Japan and the United States, the traffic fatality rate per 10,000 vehicles for all Honda Japan United States
automobile, including minicars, is below the average of all major auto OEMs. Overall Japan average ■ Honda Overall U.S. average ■ Honda
Mortality rate (persons/unit) Mortality rate (persons/unit)
A major challenge as we move toward 2030 is fatal accidents involving motorcycles in emerging
1.0 2.5
countries. As the world’s largest provider of motorcycles, Honda recognizes it has a social responsibility to
proactively address this issue and is conducting educational activities targeting a wide range of people and 0.8 2.0
incorporating safety equipment into motorcycles, such as advanced brake systems of ABS*3 and CBS*4, and
LED headlights that are highly visible and make riders more visible from other road users at the same time. 0.6 1.5

For automobiles, we actively promote the functional evolution and dissemination of advanced driver
0.4 1.0
assistance systems (ADAS), effectively reducing accidents in emerging and developed countries.
*1 Traffic collision fatalities involving Honda motorcycles and automobiles: Traffic collision fatalities involving Honda
motorcycles and automobiles, as well as pedestrians and bicyclists (i.e., all traffic participants, except for intentional and 0.2 0.5
malicious violators of the rules and persons who are incapable of fulfilling their responsibilities) 2007 2009 2011 2013 2015 2017 2019 2021 (FY) 2007 2009 2011 2013 2015 2017 2019 2021 (FY)
*2 Halve the number of traffic collision fatalities per 10,000 vehicles involving Honda motorcycles and automobiles
Source: Honda research based on Japan Traffic Accident Analysis Center data. Source: NHTSA Fatality Analysis Reporting System (FARS) data, based on Honda
worldwide in 2030 compared to 2020. Japan’s totals are based on annual traffic statistics for automobiles and research. The U.S. totals are based on the TSF Fatality Rate per Registered
*3 ABS : Antilock Brake System motorized bicycles. Vehicles.
*4 CBS : Combined Brake System

Honda Safety Targets Three Elements of Safety

Traffic collision fatalities involving Honda

50% of
Current Traffic
50% Collision
Reduction Fatalities
vehicles (per 10,000 vehicles)

Toward Zero Traffic

Zero
Collision
Fatalities
Fatalities

2020 2030 2040 2050 Year

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Human Ability: Awareness-Building Activities Mobility Performance: Technological Development

As we reach the 2030 milestone, it is important that our awareness-building activities expand opportunities To realize the 2030 milestone, the functional evolution and diffusion of advanced driver assistance systems
to support everyone involved in the transportation community through quality programs. (ADAS) will be important from a technological development perspective. It is envisaged that this will
To achieve this, Honda is training instructors, strengthening traffic safety awareness-building activities enhance collision safety performance.
at traffic education centers and dealerships and utilizing ICT tools, such as smartphones, to deepen In addition to Honda SENSING, which has been available since 2014, Honda also offers two advanced
learning for all people, regardless of time or location. We also promote initiatives to deepen learning for driver assistance systems: Honda SENSING 360, which responds to accident scenes in all directions, and
all people regardless of time and place. Honda SENSING Elite, which aims to zero human error when driving.
In June 2023, Honda released the “Honda Driver Coaching” app in the U.S. for young people. This app
supports young drivers to develop safety driving behaviors through driving diagnosis and real-time voice Honda SENSING: For Further Popularization, Expanding Application to
advice. We are considering rolling out the initiative in emerging countries and plan to conduct Emerging Countries
demonstration tests in the future. “Honda SENSING” is a system primarily designed to detect the front of the vehicle and includes pedestrians as
In April 2023, Thai Honda signed a memorandum of understanding with the Land Transport detectable objects. It supports safe and comfortable driving, as well as accident avoidance. The N-BOX minicars
Department of the Thai Ministry of Transport on the development of a “Hazard Prediction Training” to featuring Honda SENSING technology, available in Japan, have demonstrated impressive results in terms of
prevent traffic accidents. This initiative aims to enhance the ability to predict potential dangers and to safety. These vehicles exhibit an 82% reduction in rear-end collisions and a 56% reduction in pedestrian
elevate awareness about traffic safety among participants in traffic. With this opportunity, Thai Honda will accidents*1, showcasing the substantial effectiveness of this innovative technology in accident prevention. As of
provide the knowledge on traffic accident prevention it has accumulated over 30 years to educate 2022, the sales ratio of new automobiles that are equipped with “Honda SENSING” has reached 99% in Japan
prospective drivers and young people. and the United States and 86% globally, with a cumulative total exceeding 14 million units.
To contribute to the development of laws and regulations, including the licensing system, and traffic To reduce the number of fatalities in motorcycle
Accident Reduction Effect of Vehicles Equipped
rules, we will continue to collaborate with international organizations, government agencies of various traffic accidents, Honda is gradually rolling out with Honda SENSING (N-BOX)
countries and other mobility industries. “Honda SENSING” with a motorcycle detection
Decreased
function. The vehicles to be fitted with this by
Decreased
technology were rolled out in 2021, and the features by 56%
will be incorporated in all automobile models 82%
worldwide by 2030. In addition, Honda aims to
expand the application of advanced brakes such as
“ABS” and “CBS” and highly visible and lighted lamps Rear-end collisions Vehicle-Pedestrian collision
to more models of motorcycles.

Target to Achieve Zero Traffic Collision Fatalities by 2050

Honda Driver Coaching App (U.S.) Animated video produced by Thai Honda for the Land
Transport Department of the Thai Ministry of Transport
Target for 2030
Advanced Safety Automobiles in developing Automobiles in emerging Motorcycles in emerging
Equipment countries*2 countries*3 countries*4
Application Rate Honda SENSING 360 Honda SENSING Advanced Braking (ABS/CBS)

100% 100% 100%

*1 The difference in the number of traffic collision fatalities and injuries per registered vehicle between N-BOX vehicles
without AEB and vehicles equipped with Honda SENSING. Based on data from the Institute for Traffic Accident Research
and Data Analysis, according to Honda’s research.
*2 Japan, the U.S., China, Europe
*3 India, Indonesia, Malaysia, Thailand, Brazil
*4 India, Indonesia, Vietnam, Thailand, Brazil Honda Report 2023 38
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

To Realize a Zero Traffic Collision Society | Safety Strategy

Honda SENSING 360: Aiming to Deploy All Automobile Models in Developed Honda SENSING Elite: Aiming Zero Human Error when Driving
Countries by 2030 “Honda SENSING Elite” is a system equipped with “Traffic Jam Pilot,” an advanced technology compatible
The omnidirectional safety and driver-assistive system “Honda SENSING 360” is a system to avoid imminent with Automated Driving Level 3*2 (automated driving with conditions in a limited area), which is the
accidents or to further reduce damage by expanding the ability of the vehicle to detect and avoid the risk world’s first automated driving system to receive type designation by the Ministry of Land, Infrastructure,
of accident in all directions. A total of five millimeter-wave radars are installed on the vehicle: One at the Transport and Tourism in 2021. This system makes it possible to perform driving operations on behalf of
front and one on each corner. This achieves 360-degree sensing. the driver under certain conditions, such as when there is traffic congestion on expressways.
The five main functions of Honda SENSING 360 are Collision Mitigation Braking System for crossing Furthermore, we are advancing the development of a new technology for the next evolution of
vehicles at intersections and crossing pedestrians when turning right or left, Front Cross Traffic Warning, “Honda SENSING Elite.” This technology uses Honda’s unique AI technology, which grows with experience,
Cornering Speed Assist, Lane Change Collision Mitigation, and Active Lane Change Assist. Honda aims to like a person, to recognize complex scenes and respond to complex environments, such as general roads,
expand the use of these functions to all automobiles in developed countries by 2030, starting from the enabling hands-off functions during traffic jams on main roads and driving support functions during
installation to the CR-V released in China in 2022. Furthermore, Honda is developing new technologies merging and branching scenes at highway junctions, etc., to enable safe, secure and seamless travel from
that evolve the Honda SENSING 360. home to destination, including on main roads. These technologies are scheduled to be applied sequentially
Currently, new technologies are under development, including the Advanced Lane Change Assist Function from the mid-2020s.
with Hands-off Function and the Advanced In-Lane Driving Assist Function to reduce the driving load; the *2 Definition of automated driving defined by the Japanese government (based on SAE) is as follows: Under certain
conditions, the system monitors surrounding traffic conditions and drives on behalf of the driver.
Driver Emergency Support System to support deceleration and stop in the same lane when the driver does not
respond to operation requests from the system; the Exit Warning to detect and recognize vehicles approaching
from the rear side while parked; the Driver Attention Warning and Collision Warning, In-Lane Collision Next-Generation HONDA SENSING Elite
Avoidance Assist Technology, Emergency Steering Support Technology, etc. We are engaged in the Driver assistance on non-
expressway roads
development of new technologies, including those capable of detecting driver conditions and predicting Level 3
Driver assistance for all
potential hazards ahead, while offering assistance for avoidance. These technologies are being customized to Parking in and driving out of a expressway driving solutions
address the distinct requirements of different regions and are scheduled to be progressively introduced from home garage Level 3 for all driving situations Technology
Call forth at remembered location to be established by late 2020s
2024 onward. We aim to achieve enhanced safety measures by these technologies. Call forth from remote location +Level 3 in traffic jams

Honda SENSING 360 System Configuration

〈360 System〉
Front sensor camera
Long-range Recognizes white lines/shoulder.
millimeter-wave radar Identifies types of obstacles
Detects the speed/distance 〈Next〉
of distant obstacles Call forth while away from home and drop off
Antenna + ECU Maps*1 We aim to establish the technology, Level 4 in a limited
area in the automated valet parking certified areas by
the latter half of the 2020s.

By integrating AI technology into cognitive and understanding

Driver We aim to further reduce accidents in all scenarios.
Mid-range millimeter- monitoring camera systems in complex public road environments
wave radar
Detects the speed/distance
of nearby obstacles
Mid-range millimeter-
wave radar
Detects the speed/distance
of nearby obstacles

*1 ECU：Electronic Control Unit

Honda Report 2023 39

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

To Realize a Zero Traffic Collision Society | Safety Strategy

Traffic Ecosystem: Collaboration, Development of Systems / Services

Honda has been developing various technologies, including deployment of the “SAFETY MAP,” which vehicles, through telecommunications to predict risks before accidents occur and support accident
consolidates driving advice for accident-prone areas, locations requiring sudden lane changes, analysis of avoidance.
data, such as sudden braking information from Honda vehicles, development of a system known as AACN In 2023, as part of efforts to promote this Safe and Sound Network Technology, we will participate in the
(Advanced Automatic Collision Notification), which automatically notifies fire departments and Road-Vehicle Cooperation Demonstration Experiment being conducted by Central Nippon Expressway on a
cooperating hospitals from vehicles involved in accidents and utilization of connected vehicle technology section of the Shin-Tomei Expressway under construction together with SoftBank Corp. This exercise aims to
to estimate the probability of fatalities and severe injuries in the event of an accident. verify use cases for risk prediction and information notification using information from connected vehicles
To achieve Honda’s target of zero traffic collision fatalities involving Honda motorcycles and and traffic infrastructure. Through these demonstration tests, Honda will identify issues before implementing
automobiles worldwide by 2050, it is essential to ensure the safety of all people, including vulnerable road the technology in society and use this information to innovate and develop. Honda aims to complete system
users. To this end, Honda is further advancing its long-standing connected technologies and developing its construction and effectiveness verification in the early 2020s and standardize the technology in the late
Safe and Sound Network Technology, which connects all traffic participants, i.e., people and mobility 2020s, with the aim of implementing the Safe and Sound Network from 2030 onwards.

Safe and Sound Network Technology Use Case Image for Highway Driving

Information collaboration
platform Road control center

Risk area Roadside camera

4. Analyze risks 3. Integrate information ユースケ
Vehicle information
management
Risk area Risk area
ユースケース概要230 ユース
Decreased
ユースケース概要230
1. Vehicle information
Decreased
attention
awareness

Runaway
2. Vehicle information
(connected vehicles)
5. Risk information for
surrounding area ユースケース概要23030
(including unconnected vehicles)

Detection Motorcycle vehicle Roadside sensor

Risk area Pedestrian
information from detection from
information location
other vehicles other vehicles
【凡例】
情報連携プラットフ
Roadside 【凡例】
情報連携プラットフォーム
：コネクテッド車両
camera 【凡例】
情報連携プラットフ
④リスク解析
Decreased Kindergarten /
【凡例】：コネクテッド車両
情報連携プラットフォーム
：非コネクテッド車両
：コネクテッド車両
④リスク解析 ③情報の統合
visibility School children
【凡例】
：非コネクテッド車両
：コネクテッド車両
情報連携プラットフォーム
：車両情報 ④リスク解析 道
Legend : Connected vehicles : Non-connected vehicles
：非コネクテッド車両
：コネクテッド車両 ④リスク解析 ③情報の統合
: Vehicle information
：車両情報
：非コネクテッド車両 : Risk information on surrounding area
：周辺リスク情報
④リスク解析：車両情報 ③情報の統合
：非コネクテッド車両
：周辺リスク情報
：車両情報
：周辺リスク情報 ②車両情報
：車両情報 （コネクテッド車両）
：周辺リスク情報 ②車両情報 ⑤周辺リスク情報
：周辺リスク情報 （コネクテッド車両） ②車両情報
（コネクテッド車両）
②車両情報 ⑤周辺リスク情報
②車両情報
（コネクテッド車両） ⑤周辺リスク情報
（コネクテッド車両）

Honda Report 2023 40

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

To Realize a Zero Traffic Collision Society | Safety Strategy

Ayato Yoneyama
Electrictrification Business
Development Operations
Motorcycle and Power Products
Electrification
Business Development Unit
UX and Software Connected
Development Department Division
Software Core-technology
Development Department
After being involved in motorcycle
engine design, shifted focus to safety-
related tasks in emerging countries.
Favorite motto
“Today is the youngest day.”
“Give it your all, regardless of the
outcome.”
Honda-ism which he has empathy
“Light your own torch.”
“Eliminate no play, no error.”

Interview ––––––––––––

Taking the Lead in Walking Down Paths yet Untrodden by Anyone

From an early age, my dream has been to contribute to mobility through engineering. While I’ve been
engaged in motorcycle engine design with the goal of bringing joy to customers through my products,
I developed a firm belief that “While Honda’s motorcycles expand possibilities in people’s lives, they also
lead to unhappiness due to accidents. If we don’t address this, can we genuinely provide happiness?” This
conviction steered me toward safety-focused endeavors a few years ago. Primarily targeting emerging
markets like Thailand, I’ve been spearheading initiatives in accident prevention utilizing infrastructure
cameras and advancing technologies for safety driving education.
Safety is a critical domain for Honda, and as I embarked on new challenges, I began from the ground
up, undergoing a process of trial and error. Until that point, I had always aimed to surpass others, but
I soon realized that there were limited problems I could solve alone. However, I acknowledged that
Honda has numerous associates with diverse expertise. I sought their help, breaking down barriers and
reaching out across various internal departments. Everyone, faced with unexplored terrain, was eager to
collaborate, and I believe this enthusiasm resulted in outcomes exceeding our expectations.
I transitioned from the realm of engines to the world of software, with no prior experience, in order
to approach the safety domain from a fresh angle. The fear of failure often hinders us from embracing
new challenges. I firmly believe that forging new paths, even in areas uncharted by anyone before, is the
key to innovation. The software domain in the automotive industry is still in its early stages. Our goal is to
set industry standards in this domain, making Honda a global competitor in the realm of software.

Honda Report 2023 41

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

The Evolution of Human Capital Management Human Capital Strategy

Human Capital Management Initiatives We subsequently establish key goal indicators (KGIs) along with their target values as metrics for

Basic Policy for Personnel Management assessing the degree of accomplishment of human capital materiality. Additionally, we formulate an array

- Honda Philosophy 裏表紙

of human capital strategies, measures and Key Performance Indicators (KPIs) to showcase the attainment
of these target values as part of a coherent narrative.
Honda defines the principles of personnel management based on the Honda Philosophy. The key KGIs and their associated KPIs are subject to consistent monitoring as part of the business
principles of this philosophy are to respect each other’s initiatives and individuality, to establish equal management framework. Furthermore, we employ the Plan-Do-Check-Act (PDCA) cycle, allowing for
relationships and to foster trust among individuals. Our goal is to maintain a company where talented periodic adjustments of indicators and target values, as well as the adaptation or inclusion of measures as
individuals with a strong intrinsic will to create a better society collaborate, enabling a broader range of required.
abilities, talents and creativity to be fully utilized. Additionally, we aspire to become a company where the
joy of overcoming challenges can be shared, even in situations of differing opinions. To continue creating Honda Human Capital Management Storyboard
products and services that surpass the expectations of our customers and society, we will develop a
comprehensive human and organizational strategy that encourages and supports the growth of
individuals “driven by dreams and initiative,” empowering our associates to work vigorously at Honda. Honda Philosophy
Fundamental Beliefs, Company Principle and Management Policies

Principles of Personnel Management

Respect for the Individual

Initiative Equality Trust

Global Brand Slogan

Three Principles of Personnel Management

Honda respects the individuality, creative thinking and judgment of each The overarching theme guiding differentiation across the entire company is
Respecting Initiative Evolution of Human Capital Management
associate.
At Honda, every person should have equal employment opportunities.
Ensuring Fairness An individual’s race, gender, age, religion, national origin and social or
economic status have no impact on the individual’s opportunities.
Direction of medium- Direction of short- and
Encouraging Honda and its associates should respect, trust and recognize each other and long-term initiatives Human capital materiality medium-term initiatives
Mutual Trust as individuals and make sincere efforts to fulfill our responsibilities.

Activating associates’ intrinsic motivations and Ensuring both quantitative and qualitative sufficiency
fostering the integration of diverse individuals of human resources in priority business areas*

Human Capital Management Linked to Business Strategy:

A Defined Narrative
As a component of Honda’s human capital management initiatives, we have defined “human capital
Target value for
materiality” as encompassing issues that warrant close attention through human capital strategies. This KGIs Key measures Measure KPIs
2025/2030
process involves intertwining these strategies with our business strategies.
When delineating human capital materiality, we engage in company-wide discussions about the
trajectory in which we should channel our efforts. These discussions encompass both the medium- to
long-term dimensions of the “evolution of human capital management,” a pivotal theme spanning the Understanding stakeholder expectations

entire company, and the short- to medium-term aspects of fortifying our business strategy. * Priority business areas: electrification, software technologies, new business, basic research, etc.

Honda Report 2023 42

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

The Evolution of Human Capital Management | Human Capital Strategy

Human Capital Management Story

KGIs to Achieve Human Capital Materiality and Strategy- New challenges for people and the
Oriented Key Measures・KPIs organization

We have established targets for 2025 and 2030 by framing human capital materiality as Vision for Human Resources
in 2030
“activating associates’ intrinsic motivations and fostering the integration of diverse individuals” for Cultivating individuals and
medium- to long-term endeavors, and “ensuring both quantitative and qualitative sufficiency of organizations that
consistently embrace 2040
human resources in priority business areas” for short- to medium-term initiatives. challenges on their journey and
towards realizing their beyond
Anticipating the period beyond 2040, we will continue to conduct reviews of the indicators to dreams
ensure effective management oversight.
For every target value, we are formulating human capital strategies and defining measurable
KPIs that contribute to the attainment of these objectives. Additionally, we are crafting plans to Strengthening the basis for
optimizing the utilization of
ensure their realization. As we move ahead, we will regularly track the advancement of each global management resources
2030
indicator and implement a system that facilitates prompt decision-making based on
quantitative evidence.

2025


Human Capital Materiality Goals KGIs Target Value for 2025 Target Value for 2030 Examples of KPI Measures

● Annual training hours per person

Associates are highly motivated and Percentage of positive Percentage of positive ● Number of applicants for Challenge Open
driven by goals, with their supervisors Associate engagement score responses responses Recruitment*1 and in-house recruitment
Activating associates’ actively supporting their endeavors 50% or more 60% or more ● Number of applicants for IGNITION*2
intrinsic motivations and ● Percentage of management training participants
fostering the integration of
diverse individuals
Synergy is optimized through the Proportion of female in 3 times increase compared to 4 times increase compared to ● Number and percentage of female employed
integration of diverse knowledge management positions 2020 2020 ● Number of female leader candidate pools

●  umber of applicants in the area of software

N
technologies
Increase to 10,000 associates Number of expert managers
There are sufficient human resources in Sufficiency of human resources
●

- in the area of software ● Skill visibility rate of human resources involved

Ensuring both quantitative priority areas in priority areas

technologies in priority areas
and qualitative sufficiency ● Actual human resource matching (shifting of

of human resources in resources)

priority business areas
Investment in the development  raining hours per person for reskilling program
T
Resources are proactively invested in the
●

of human resources in priority Attaining the highest global market standards Number of participants in reskilling programs by
development of human capital
●

areas external organizations

*1 Challenge Open Recruitment: A personnel transfer system founded on open recruitment, aimed at kindling individual motivation to embrace fresh challenges
and ensuring optimal alignment of individual competencies and affinities with job roles.
*2 IGNITION: An in-house recruitment program that allows associates to utilize their individual ideas and take on the challenge of starting a new business.
Honda Report 2023 43
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

The Evolution of Human Capital Management | Human Capital Strategy

Honda’s Human Capital Strategy

Enhancing Corporate Competitiveness and Restructuring the Business Framework through the Optimal and Efficient
Utilization of Human Capital
During a period “once in a century transformation” in the industry, Honda has transitioned its current business structure to accommodate diverse careers and work styles. Our commitment extends to bolstering individuals
landscape into a second founding period. This phase is centered on crafting human capital strategies aimed at and organizations that embrace the challenge of realizing their “dreams.” Furthermore, to foster structural
“enhancing corporate competitiveness and restructuring the business framework through the optimal and business reform from a human resources standpoint, we will persist in our endeavors to acquiring and shifting
efficient utilization of human capital.” human resources, particularly in priority areas. This forms a component of our vision to achieve both
While valuing Honda’s core values that underpin corporate competitiveness, we will implement quantitative and qualitative sufficiency. To enable shifting of resources, we will actively invest in human
professional talent development, creating environments that encourage practical application and establishing resources to facilitate reskilling and implement measures to enhance proficiency in priority areas.

Human Capital Materiality

Activating associates’ intrinsic motivations and fostering the integration of diverse individuals Ensuring both quantitative and qualitative sufficiency of human resources in priority business areas

Associates are highly motivated and driven by goals,

Synergy is optimized through the integration of There are sufficient human resources in priority Resources are proactively invested in the
with their supervisors
diverse knowledge areas development of human capital
actively supporting their endeavors

Provision of opportunities and structures Promotion of diversity in careers and Acquiring and shifting human resources to fulfill human resource needs
to promote professional human resource work styles: to priority areas
development and practice:
· Develop human resource portfolio
· Expand opportunities for autonomous · Diversify careers and work styles · Establish new scheme to secure resources
learning and development · Accelerate autonomous careers · Accelerate shifting of resources
· Create a climate and structure · Expand working period by improving
encouraging challenge health and wellness
· Foster the next generation of leaders

Creating people and organizations

that take on the challenge of realizing Proactively investing in human resources in priority areas
“dreams”:
· Initiatives to revitalize the organization · Improve basic skills of all associates in priority areas
· Increase the number of Honda fans · Expand reskilling through specialized programs
· Maximize human resources through · Programs to develop top management to strengthen competitive areas
HRDX

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 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

The Evolution of Human Capital Management | Human Capital Strategy

Activating Associates’ Intrinsic Motivations and Fostering the Integration of Diverse Individuals
Synergy is Maximized via the Integration of Diverse
Challenging with High Motivation and Goal-Oriented Knowledge
Mindsets (Challenge to Dream), and backed by the Full We believe that the fundamental objective of diversity initiatives is “to generate novel business prospects and
Support of Supervisors value by promoting the exchange of viewpoints among associates with distinct ideas.” Especially the
In order for Honda to deliver value to our customers, motivated by the dreams of each and every Honda associate, it enhancement of female participation stands as a pressing concern that will consistently command our
is imperative that we fully acknowledge and comprehend the global brand slogan as a shared philosophy. This endeavors. Without a doubt, we consider periods of business environment transformation as opportunities
philosophy must then be reflected in our actions, central to our purpose and identity. By adopting this collaborative to broaden the active engagement of females.
vision as a foundational principle, we will be better equipped to tackle the challenge of creating new value through a From a global perspective, we identify Japan as facing challenges in promoting opportunities for female
sequence of steps including “establishing ambitious transformative goals,” “embracing a spirit of experimentation,” participation. We gauge this by utilizing the proportion of females in managerial positions as an indicator of
“taking the lead in the pursuit of accomplishments,” “learning from others and consolidating diverse knowledge” and the issues at hand.
“delivering surprises, exhilaration, and joy.” Furthermore, we will also shape our global diversity, equity and inclusion initiatives in accordance with
In the pursuit of these objectives, we have formulated a new question for the engagement survey, aimed at this recognition.
gauging the extent to which associates exhibit strong motivation and drive to realize their aspirations. Furthermore, KGI Target for 2025 Target for 2030
we have revised the engagement score calculation method to better articulate our intentions. We recognize that Associate engagement
Percentage of positive responses 50% or more Percentage of positive responses 60% or more
score
each associate’s aspirations of striving toward their dreams require support from supervisors within the organization.
Proportion of females in
Consequently, we have infused this aspect into the engagement survey inquiries. 3 times increase compared to 2020 4 times increase compared to 2020
management positions

Undertaken Efforts Achieved Results for FY2023 Future Initiatives

Improve associate engagement to enhance their motivation Encouraging the challenge of “dreams” toward the realization of the global brand slogan
· Conduct an associate engagement survey ●  ssociate engagement survey score:
A · Develop measures to disseminate the global brand slogan throughout the company
· Develop company-wide measures to enhance associate 3.48 · Comprehensive review of the personnel system to stimulate associates’ intrinsic
engagement motivations

Implement capacity-building measures to support self-

Challenging with high Development of learning and practice opportunities to foster professional human resources
improvement ●  nnual training hours per person: 18
A
motivation and goal- · Investment in all associates to promote autonomous career hours
· Expand associates’ learning and practical experience based on a new knowledge creation model
oriented mindsets development and self-improvement ● Number of Challenge Open Recruitment
· Increase investment in business and associate-initiated training programs to acquire practical
(challenge to dream), and · Promote the “Honda Lifelong Playground*” applicants/accepted applicants:
knowledge based on the “Three Reality Principle”
backed by the full support · Provide opportunities for associates to demonstrate their abilities 1,093/185
· Further expand opportunities to take on challenges (priority areas), including open positions
of supervisors (Challenge Open Recruitment and IGNITION)
· Develop an “IGNITION Studio” as a joint program with sponsors and outside experts

Develop career programs that support autonomous growth Development of measures to strengthen management so that key transformations can be
· Strengthen two-way communication between supervisors and ●  umber of career interviews conducted:
N achieved
subordinates 2,667 · Develop training programs for managers to raise their management skills
· Conduct career interviews with career advisors · Provide managers with timely feedback on associate engagement levels in their own departments

Synergy is maximized via Accelerate training and promotion of female associates Further acceleration of female participation
● Number of career interviews with
the integration of diverse · Training based on career plans
female associates: 490
· Increase the number of females in management positions
knowledge · Conduct career interviews with career advisors · Promote the development of younger associates in cooperation with the project’s goals

* Honda Lifelong Playground: An internal community that enhances personal growth by fostering connections among like-minded colleagues who learn together and undertake the task of creating new value.

Honda Report 2023 45

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

The Evolution of Human Capital Management | Human Capital Strategy

Ensuring both Quantitative and Qualitative Sufficiency of Human Resources in Priority Business Areas

Acquiring and Shifting of Human Resources to Fulfill Human Resource Needs in Priority Areas
Another significant initiative crucial for advancing our business success, we will emphasize the quantitative In order to actively monitor human resource sufficiency and enact prompt measures, we will establish
and qualitative sufficiency of human resources aligned with our business portfolio. This encompasses human resource portfolios for each sector. As an initial stage, we have developed a portfolio for the realm of
presenting pivotal suggestions to bridge gaps, which will involve a comprehensive evaluation of our software technologies. This portfolio identifies the reskilling targets, skill enhancement needs, shifting of
business plan. resources and the necessary count of external hires.

Human Resource Management for Business Strategy Human Resource Portfolio in Priority Areas
High
Proactive Investment in Human Resources in Priority Areas
software Priority areas = Acquire external
value New area personnel
creation electrification, In our pursuit of acquiring skills within software as our priority area, we are set to undertake an
α software
New area technologies, Bring it in-house Secure

Importance and scarcity of skills

personnel unprecedented level of human resource investment. Furthermore, alongside the company-wide reskill
β new business
proactively from
and basic program, we are poised to substantially broaden specialized skills enhancement initiatives. This expansion
Business both within and
X research, Alliances outside
Business New area etc. aims to enable the creation of innovative value.
Honda
Y γ

Existing Shifting
Business
A
business Business
Z Initiatives start from of KGI Target for 2025 Target for 2030
the area of software resources
technologies Utilize Reskilling and
external reassignment The company maintains sufficient human
- Increase to 10,000 associates
Business Business resources of personnel resources in priority areas
B C
High Investment in the development of human
hardware Attaining the highest global market standards
value
resources in priority areas
creation
Deeper knowledge Knowledge exploration Need to establish skills in-house

Undertaken Efforts Achieved Results for FY2023 Future Initiatives

Formulate human resource portfolios and implement shifting of resources for each business
Establish personnel management to ensure quality and quantity ● Number of personnel shifted to priority · Formulate human resource portfolios and visualize personnel sufficiency in the area
· Shift human resources to priority areas for achieving carbon areas: 70 of software technologies
neutrality ● Experience and skills survey conducted: · Visualize software skill map
· Conduct experience and skills surveys for all associates 35,825 respondents · Promote shifting of resources by establishing a personnel matching scheme between
Acquiring and shifting of business areas
human resources to fulfill
human resource needs in
priority areas Establish and implement measures to acquire the best human
Secure resources by establishing new schemes
resources for the talent we seek
· Increase the number of recruits to strengthen the area of software technologies
· Recruit human resources from outside Honda for the area of ● Number of mid-career recruits: 476 · Expand recruiting methods, such as direct sourcing
software and connected technologies
· Consider broader employment options not limited to existing employment systems
· Disseminate the attractiveness of Honda associates via our owned
(work hours, transfers) and work styles
media “Me and Honda, Career*”

Expand shifting of resources and reskilling measures in priority areas

Proactive investment in Start training programs in priority areas Software skill development program · Conduct a “software and electrification e-learning program” for all associates
human resources in · Mandatory acquisition of IT Passport for new associates ● Number of programs: 85 · Efforts to secure time for reskilling
priority areas · Conduct Python training for all associates in the research area ● Number of participants: 1,204 · Conduct intensive programs with external organizations for those subject to
reskilling

* Me and Honda, Career: Owned media communicates the appeal of Honda associates through our dedicated recruitment website and various social media platforms.
Honda Report 2023 46
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

The Evolution of Human Capital Management | Human Capital Strategy

Career Growth, Learning, Practice for Cultivating Offering Opportunities for Associates to Independently Showcase and
Refine their Abilities
Professional Personnel’s Independent Development The “Challenge Open Recruitment” initiative provides voluntary opportunities to showcase and apply one’s
Defining Common Capabilities and Implementing Customizable Learning Programs abilities, and communities like “Honda Lifelong Playground,” aimed at cultivating new networks, have
To transform our associates into professionals competent not only within Honda but also beyond, we have been instrumental in fostering connections among peers, facilitating learning and creating novel value.
outlined the common capabilities essential for business acumen. In alignment with this goal, we have Through these endeavors, we have been providing chances to partake in challenges and have observed a
furnished a guidebook that outlines strategies for nurturing and refining each capability, complemented certain degree of achievements.
by e-learning programs to bolster associates’ self-driven and independent endeavors.
Furthermore, we intend to advance our learning management system, inaugurated in FY2022, into an
FY2023 result
The purpose of the Challenge Open Recruitment is to promote personnel transfers
all-encompassing platform that provides augmented learning prospects and visually tracks competency Purpose of
driven by an associate’s own will, thereby igniting individuals’ readiness to undertake Number of Challenge
the
development progression. Challenge endeavors. This initiative aligns individual competencies and affinities with job roles, Open Recruitment
Open fostering an environment characterized by freedom, dynamism and audaciousness,
applicants/accepted
Recruitment applicants
Empowering Autonomous Career Development through Honda’s with the overarching goal of “cultivating delightedness.”

“Knowledge Creation Model” Enhance one’s

Pursue an open
1,093 persons/
185 persons
career New career
A knowledge creation model has been devised to encompass individuals’ aspirations and interests, guiding them in position Personnel change
independently (new opportunity)
(self-selection)
2-way process
accumulating formal knowledge and acquiring fresh skills. These initiatives aim to empower associates in broadening
their networks and prospects as they embark on novel challenges, embrace emerging opportunities, enhance their
market value and ultimately uncover new aspirations. Grounded in this model, we
will formulate measures that bridge individuals with opportunities for tackling new FY2023 result
endeavors, foster the establishment of networks and capture/visualize Annual training hours Overview of Challenge Open Recruitment
per person
skill sets. By intertwining the selection and deployment of associates through the
personnel system and evaluation processes, we will enhance the associate 18 hours To further amplify the avenues for associates to showcase their capabilities, we intend to implement an
experience and provide a visual representation of key outcomes. open position system in priority areas. This system will welcome applications from both internal and external
individuals, consequently broadening the scope for associates to embrace novel challenges.
Commencing in FY2024 (April 2023 - March 2024), we are in the process of establishing the “IGNITION
ew drea
ms in a new Expanding and Studio,” which will serve as a human resource development initiative dedicated to fostering new
Honda’s new knowledge of n env
iron circulating the
ery
creation model isc ov
b ase d on sk ills
me
nt experience of businesses. By
D tion) and
r/selec imp
ro individual associates aggregating the
fe t
skills hrough e vem
ns n of xpe Enhance “mind and capability” for business development
tio insights garnered
isi rie
tra

en

qu rough new n
n
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f in

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ce

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rie
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es Expa
sa
e

iti s
business creation
exp

ns
isition of oppor

idual
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ng

ion
ion of oppo

program ”IGNITION,”
market value
ow
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ortunities
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Personal
ledge

dreams and
passions
in combination with Foster an entrepreneurial spirit Acquire the skills to generate empathy
Planning of opportunities,
s
x ta
Acqu

utilization of information the expertise of ・・・

p

Providing opportunities and visualization of external professionals, Learn the basics of startup Identify customer challenges Develop pitch-making Personalized support,
Networking company performance entrepreneurship through training sessions and training skills mentoring, etc.
for challenge support including venture Develop team-building Learn how to get more and Learn how to from Honda’s
skills better customer information interview customers IGNITION & Design division
capital, this Studio is Strengthening the “mind and capability” of Honda associates for
Selection and assignment poised for creating business development by integrating the knowledge acquired from the
Gathering and IGNITION program and the expertise of venture capitalists
visualizing skills based on personnel
new businesses.
system/evaluation
Honda Report 2023 47
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

The Evolution of Human Capital Management | Human Capital Strategy

Nurturing and Selecting Next-Generation Leaders Embracing our Corporate Philosophy

Advancing Global Talent Management Jitender Teckchandani

Lead of Global Learning &
Development,
We have established and are actively pursuing our vision of “Matching the Right Talent to the Right Talent Management Department,
Human Resources Division
Position,” wherein individuals’ abilities and aspirations are cultivated, ensuring that everyone has an After working at HCIL, Honda’s local
subsidiary in India and at Asian Honda,
equitable opportunity to take up pivotal roles and steer Honda on a global scale.
the regional head office for Asia-
pacific, he assumed his current position
in Japan. He has been consistently
Developing a Global Competency Model (GCM) involved in various aspects of human
resources for diverse set of associates
To methodically and consistently cultivate and appoint capable and motivated personnel, irrespective of across different countries.
individual attributes such as nationality and gender, we have formulated a Global Competency Model Favorite motto
“Be Simple & Honest”
(GCM). This model outlines the behavioral traits essential for a global leader, upon which we are devising “Compete with yourself and not with
others”
various initiatives. The GCM serves as the basis for shaping leader development strategies and determining Honda-ism which he has empathy
“Transparency and fairness”
the criteria employed in human resources evaluations. Additionally, we are compiling information about
“Challenging spirit”
the global talent pool we necessitate. By specifying the experiences and capabilities anticipated from
individuals assuming significant global roles, we aim to refine the alignment between human resources
and the talent criteria we have set, enabling more strategic nurturing of next-generation leaders. Interview ––––––––––––

Reorganizing the Talent Board Creating a Culture where Diverse Talents from Around the World
To expedite conversations regarding the advancement of next-generation leaders, we introduced a new Influence One Another and Collaborate for Success
working group in 2023 alongside the existing Global Talent Board. Furthermore, we have revamped the My 20 years at Honda have been filled with numerous positive experiences that have shaped my career
Talent Board for each business unit and function to initiate comprehensive discussions across the company. and life. During this time, I’ve had the opportunity to be involved in various aspects of HR, working
alongside diverse members, including exceptional leaders from different countries. This has allowed me
Cultivating Next-Generation Global Leaders to grow as a professional.
Since 2021, we have been providing our Global Leadership Programs (GLPs) in alignment with the GCM. In India, job changes are common, yet I chose to continue my career at Honda for primarily
These programs are tailored for various job levels, and annually, participants are selected from all regions to two reasons. First, there were regular opportunities to engage in fresh, challenging and stimulating
take part in these initiatives. work, learn from them and grow. Second, there was a platform to practice Honda Philosophy. For
Additionally, we have initiated the development of human resources in each region, guided by the many companies, their guiding principles may be merely words on paper. However, at Honda, Honda
GCM principles. This encompasses fostering the growth of potential leadership candidates on a global scale. Philosophy genuinely serves as the guiding light for all actions. In a positive and stimulating work
environment, each associate is encouraged to freely showcase their abilities. Equality prevails, regardless
Global Competency Model Overview of the GLPs
Global Leadership of position, even in minor aspects like work attire, cafeteria and workplaces. Colleague relationships are
Programs built on mutual trust and respect, encouraging everyone to take initiative.
 eizes change
S
Number of
●
GLP-Transformation
Shows the way to the Complete one’s foundation While Honda continuously strives to create an environment where associates thrive and grow, I
participants since
●

future as an executive
● Has a global viewpoint
General Final brush-up FY2022 believe it’s essential to enhance the diversity of talents, including key global positions. The collaboration
Managers
● Makes decisions with of diverse talents on a global scale enables us to incorporate a comprehensive perspective into crucial
courage
● Seeks new challenges
Division
GLP-Exploration
Form a principle as a next
generation global leader
313 management decisions. Ultimately, this leads to offering products and services that align with the needs
Managers Nurturing leaders Number of non-
● Perseveres to the end and preferences of customers worldwide.
● Believes in people
Japanese participants
GLP-Discovery My dream is that every associate in Honda is empowered to reach their full potential and contribute
164
● Overcomes our past Subsection Form a basis as a
Limitations Managers global leader using their unique talents to the organization’s success.
Seeding leaders

Honda Report 2023 48

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The Evolution of Human Capital Management | Human Capital Strategy

“Waigaya” Culture to Foster Interactive Communication Becoming a Company where each Associate can Work to their Fullest Potential in a Healthy and Safe Manner

Honda Heart CAMPFIRE Honda’s Health and Productivity Management

“Waigaya” for Direct Exchange of Opinions with the CEO Initiatives Taken for Health and Productivity Management
“Honda Heart CAMPFIRE” is conducted to facilitate participants’ comprehension, empathy and alignment Since its founding, Honda has remained dedicated to its associates’ “health” Results of efforts in
FY2023
with company-wide announcements pertaining to the global brand slogan and other management policies. and “safety.” Progress Status
This event features the CEO elucidating the context and rationale behind these aspects. Our objective is to foster an environment where all associates can Concerning the Five
Health Management
Launched in 2022, the Honda Heart CAMPFIRE has welcomed over 3,800 participants thus far. operate at their full strength, within a mentally and physically secure and Indicators
Additionally, the accumulated view counts of Honda Heart CAMPFIRE archive have surpassed 43,000 times. healthful setting. Guided by the core message, “Persistently pursue Health (Percentage of Associates
Demonstrating
Going forward, we will intensify efforts to foster a deeper understanding of Honda’s vision by enabling and Productivity Management and enhancement, as individual strengths Improvements in Four or
All Indicators)
interactive engagement with more associates. This will be achieved by expanding the network of Honda thrive when one is in good health,” Honda champions a distinctive approach
Heart CAMPFIRE satellite sites at business locations and establishing online connections with overseas sites. to health management built on mutual trust. In alignment with this 41.9%
philosophy, associates take proactive steps while the company provides the
Stress check
necessary infrastructure to bolster such endeavors. examination rate
Honda Heart
CAMPFIRE
(Implemented eight times as Company
92.9%
of the end of June 2023) Improvement All associates Innovation Average monthly
of the work contribute overtime hours
Results of efforts in environment
Health and (labor union associates)
FY2023 Productivity
Number of applicants: Workplace
Focus on individual
associates
Management 18.64 hours
3,810 From protecting to
Well-being
Total working hours per
associate
Associate
Archive views: shaping health (labor union associates)

43,117 1,974hours
Average uptake rate of
Honda Heart CAMPFIRE (Waigaya with the CEO) paid vacation days
(labor union associates)
*including previous year’s
carryover uptake

Direct Communication among Operating Executives* 102.19%

Sharing Values and Forging Connections with Leaders
In our pursuit of implementing and accelerating transformation, we convene a monthly “on-site meeting
with operating executives.” This gathering offers an avenue for executive leaders and the CEO to engage in Visualizing the Five Behavioral Indicators for Health Maintenance and Enhancement
discussions and exchange values. In addition to sharing the content of significant discussions such as The Ministry of Health, Labour and Welfare has identified “nutrition and dietary habits,” “physical activity and
corporate management deliberations, we also foster the exchange of opinions to reinforce shared values. exercise,” “rest,” “alcohol drinking,” “quitting smoking” and “maintaining good dental and oral health” as
Furthermore, we organize an “Operating Executives’ Waigaya” to foster connections among leaders. essential lifestyle habits to uphold and enhance the health of the Japanese population. Honda has
During this event, participants are grouped to deliberate on crucial themes and subsequently present the established the subsequent five factors as health action indicators based on the outcomes of associates’
results of their discussions. It is our aspiration that the relationships cultivated through the “Waigaya” will health evaluations: (1) rest, (2) nutrition, (3) exercise, (4) quitting smoking and (5) alcohol drinking. Honda
propel additional reforms and cross-divisional collaborations. aspires for associates to recognize these indicators and proactively manage their health.
* Operating Executive: Under the direction and supervision of management, this position serves as the head of operations
for departments and critical locations, playing a pivotal role in the company’s operations.
Honda Report 2023 49
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The Evolution of Human Capital Management | Human Capital Strategy

Enhancing Participation of a Diverse Workforce to Foster Innovation

Leveraging the Activities of Diverse Individuals to Yasuko Matsuyama

Maximize Honda’s Collective Strengths <Operating Executive>
Corporate Promotion Division,
Initiatives for Expanding Female Participation <Head>
Corporate Communications
Since 2015, Honda has positioned and advanced workforce diversification as a fundamental company-wide imperative Supervisory Unit, Corporate
Communications Unit
to harness the collective capabilities of its workforce. In January 2015, we established the Diversity Promotion Office, a Honda Motor Co., Ltd.
<General Manager>
dedicated entity for broadening the diversity of Honda’s workforce. In Japan, our Corporate Communications Division,
Results of efforts in Corporate Communications Unit,
initial focus was on amplifying female engagement within the company. We Corporate Strategy Operations,
considered the initial three years, as a fundamental period to cultivate awareness FY2023 Honda Motor Co., Ltd.
Favorite motto
Number of career
about female participation at Honda. Throughout this period, our primary emphasis “Light your own torch.”
interviews with female
Honda-ism which she has empathy
was on promoting female involvement, executed through three core pillars: “Raising associates Commitment to “A00*”
awareness and cultivating a supportive work culture,” “Nurturing career
advancement” and “Establishing a conducive environment and systems.”
490
Cultivating an Organizational Culture that Harnesses the Strengths of Interview ––––––––––––
Diverse Individuals
We consider the period commencing in 2018 as marking an advancing and broadening phase in the pursuit of Transforming Diverse Perspectives of Diverse Talents into Honda’s
diversity, equity and inclusion. Founded on the belief that diversity pertains to all associates, we have progressively Driving Force
extended the purview of our diversity and inclusion initiatives, guided by an extensive roadmap. I joined Honda with the aspiration to work alongside those who resonate with Honda’s corporate culture
On December 7, 2022, Honda hosted an event centered on the pivotal policy topics of “Male Involvement in and philosophy. Since then, I have gained diverse experience in marketing, product planning and public
Childcare” and “Female Health Matters.” This event relations, dedicating myself fully to addressing Honda’s challenges at each stage.
underscored Honda’s continuous commitment to fostering My first appointment as a project leader was in the sales department for the compact car “LIFE,”
diversity within its workforce and establishing an environment primarily targeted at female customers. I meticulously studied the needs revealed through market research
that optimally leverages the strengths of a diverse range of and leveraged my sensibilities to propose ideas for designing the ideal car. Additionally, I suggested
individuals. The company event featured presentations from promotional tools that would allow customers to enjoy the excitement of choosing a car, and it was truly
experts and panel discussions that brought together both Panel discussion with Mr. Tetsuya Ando (NPO Fathering rewarding to receive positive feedback from both customers and dealers. At that time, female leaders
specialists and associates. Japan), Sputniko! (Cradle Inc.) and our associates within the company were still relatively few, yet my opinions were always taken seriously and respected.
“The idea before us treats everyone equally, regardless of gender, age, or position.” The spirit of respecting
Overview of Efforts to Foster Diversity within Honda’s Workforce
Issues and Needs humanity that Honda has upheld aligns perfectly with the essence of diversity appreciation.
Strengthen inclusivity efforts for all associates
Identified for All For Honda to continue fostering creativity, the diverse perspectives of diverse talents are essential. This
Associates through Promote diversity management
Female Participation Reform work climate and work style
is why it’s crucial to foster a culture and atmosphere where every associate with a diverse background can
Expansion Initiatives
Build awareness Accelerate initiatives for work style reform easily voice their opinions and to create a workplace environment where work and life can be balanced
Expand systems to balance work and child/nursing
Achieve a well-balanced work style care without worry.
Honda has a richly inherited philosophy, and countless activities and stories have arisen from
Increase opportunities for experienced associates
Expand female participation the diverse associates who work passionately. I aspire to make these known widely and have people
Build awareness Advance the employment of people with disabilities
think, “Honda is a wonderful company.” My current dream is to increase Honda’s fan base through
Create a supportive environment and systems Support LGBT associates communication efforts, sharing the stories, and contribute to achieving this vision.
Support career building
* A00: the first thing discussed when a Honda project is launched,
2015 2018 2025 “what kind of world is this work trying to realize?” Honda Report 2023 50
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Creation of Innovative Technologies Challenges in New Fields

Furthermore, in order to ensure that the novel technologies and next-generation mobility resulting
from ongoing research contribute meaningful value to society, it is imperative to evaluate the feasibility
of our businesses and products. With this objective in mind, we have instituted a “Technological Strategy
Meeting” comprising both management members and technical experts. This forum serves to foster seamless
Exploring Unknown Fields to coordination between our technological and business strategies, consequently establishing a framework for

Achieve Further Growth the efficient conversion of developed technologies into value.

Allocation of Resources to Fundamental Research

Fundamental research is a continuous process of trial and error that demands unwavering effort. It requires
Managing Executive Officer substantial time and extensive resources before these efforts manifest as products ready for introduction to the
Chief Officer, Corporate world. Nevertheless, Honda has consistently embraced the ethos of “trying first” and has persistently pursued
Strategy Operations
fundamental research. This approach has yielded captivating products like the HondaJet and the humanoid robot
Manabu Ozawa
ASIMO, which have astounded and delighted people globally. Throughout different eras, Honda’s driving force
has consistently been the “pursuit of new technologies.” The new value stemming from this pursuit shapes the
forthcoming generation of Honda products. Committed to perpetual advancement, we engage in fundamental
Advancing Innovation Management research every day.
Enhancing the R&D Structure To bolster this approach, we have allocated 5,000 personnel to Honda R&D and secured a stable annual
We are committed to improving our innovation management, driven by our belief that the development of research budget of 100 billion yen for fundamental research. While this constitutes a substantial investment even
core technologies lays the groundwork for sustainable business and competitiveness. This commitment aligns on a company-wide scale, it is through such determined resource allocation that we lay the foundation for creating
with our values of “Transcend” and “Augment,” guiding us towards their realization. new value. This dedicated allocation of resources is intended not only to support the development of carbon-neutral
From 2019 to 2020, Honda’s research subsidiary, Honda R&D Co., Ltd., transferred its product technologies related to the “five key factors,” including hydrogen utilization and sustainable materials, but also to
development functions in the motorcycle, automobile and power products businesses to Honda Motor Co., nurture various elemental technologies that will underpin “the joy and freedom of mobility.” Therefore, in addition
Ltd. This strategic move allowed for a more focused approach to fundamental technology research, aimed to advancing carbon-neutral technologies, we will steadily advance the accumulation of technologies to create
at long-term value creation. To further enhance the realm of mobility, Honda R&D is allocating additional novel value. We will persist in proactive resource investment to maintain a high level of competitiveness in advanced
resources to areas such as advanced technology research, power unit exploration and materials investigation. technologies and to establish a sustainable bedrock for our business.
The company has also identified several technology domains warranting deeper exploration, including
Initiatives in the Areas of Fundamental Technologies
new mobility, robotics, next-generation energy, including hydrogen utilization, batteries, intelligence 基礎技術領域の取り組み
technologies/AI and sustainable materials. Leading experts in these domains are spearheading Honda’s
technological development, with the goal of creating innovative value. Augmentation of the value of mobility Research into next-generation mobility
Furthermore, the Honda Research Institute, a subsidiary of Honda R&D, has established facilities in Japan, Carbon neutrality of power units
IoT/Connected Resource circulation
the U.S. and Europe to delve into computer science and other cutting-edge advanced technologies. The Key Factors
AD/ADAS Energy management
Institute collaborates in joint research initiatives with diverse institutions worldwide, aiming to synthesize
and leverage knowledge on a global scale. Application of
intelligence technologies Sustainable materials
Within this framework, Honda is applying novel technologies developed in each technology domain
Advancement of
Utilization of hydrogen
to create captivating next-generation mobility solutions capable of delivering unprecedented value batteries

across various fields including sea, in the air and in space. Specifically, ongoing projects encompass the
Honda eVTOL, the Honda Avatar Robot and ventures in space exploration. Drawing upon Honda’s core
Secured an annual budget at the 100 billion yen level
technologies—spanning combustion, electrification, control and robotics—we are poised to realize “the for fundamental research activities and Honda R&D
delight of expanding the horizons of human potential.”
Honda Report 2023 51
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Creation of Innovative Technologies | Challenges in New Fields

Enhancing Technological Development via Open IGNITION: A Novel Business Incubation Program Bringing
Innovation Shape to Associates’ Ideas and Aspiration
To uncover a diverse range of promising new technological concepts from across the globe and nurture “IGNITION” stands as a Honda endeavor aimed at birthing fresh businesses. It operates as an internal
them into solutions with broad societal impact, Honda vigorously champions open innovation with solicitation program that empowers Honda associates to harness their inventive concepts and undertake
startups in conjunction with its proprietary core technology research. the exciting pursuit of launching new ventures. The program took root at Honda R&D in 2017 and, as of
Globally, Honda has expanded its “Honda Xcelerator” program to engage with startups. The initiative 2021, has grown to encompass the entire organization. Presently, all associates have the opportunity to
operates in countries like Japan, the U.S., Israel and some countries in Europe. Building upon this initiative, embark on the journey of transforming their notions into tangible forms of new value.
Honda has introduced the “Honda Xcelerator Ventures” program to enhance its involvement with startups IGNITION operates in collaboration with venture capital firms. During the evaluation process,
by incorporating investment capabilities. This program aims to fortify our ability to actively foster business proposals undergo rigorous scrutiny, with the proponents receiving guidance from an investor’s
partnerships and investments with promising startups, supported by an annual budget of approximately standpoint. An internal task force also provides support to associates, aiding them in enhancing the
10 billion yen. We have already initiated investments in startups concentrating on cutting-edge feasibility of their proposals. The first two business ventures that emerged from IGNITION, namely
technologies such as AI, synthetic fuels, battery recycling and nuclear fusion power generation. Ashirase, Inc. and Striemo, Inc., were established in April and August of 2021, respectively, following a
Moreover, in 2023 April, Honda established, Honda Innovations Co., Ltd., in Japan to take on meticulous assessment procedure. Subsequently, SmaChari was introduced in March 2023 as an internal
responsibilities for its global corporate venture initiatives. Aligned with Honda’s overarching corporate business venture.
strategy, we have established a corporate structure that enables us to promptly invest in and collaborate The core aim of IGNITION is to nurture distinctive concepts from a diverse pool of human resources,
with startups possessing innovative technologies and ideas. allowing Honda to swiftly address societal challenges and forge novel value for the global community. By
Looking ahead, Honda will persist in actively promoting startup investments and collaborating with further propelling this initiative and connecting innumerable unique ideas with the exigencies of society,
business partners to expand the community of individuals who share Honda’s vision of “becoming the we aspire to deliver an even wider array of value to a broader spectrum of customers.
“power” that supports people around the world who are trying to do things based on their own initiative.”
Through these endeavors, we endeavor to harness the potential of the myriad ideas rooted in “dreams,”
ultimately striving to materialize groundbreaking and captivating value creation.

SmaChari

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Creation of Innovative Technologies | Challenges in New Fields

Value Creation through Intellectual Property: An Investment a company’s current competitiveness, (2) pinpointing essential foundational technologies to enhance competitiveness and

in the Future
(3) unveiling the requisite technological and IP strategies to sustain and fortify competitiveness for future.

IPL Categories Main Purpose Actions

Intellectual property stands as particularly crucial resources that play a pivotal role in augmenting corporate value
and pave the way for future advancements, spanning 5 to 10 years ahead. Honda’s strategic vision revolves around ·E arly Development Propositions for Essential
Development Proposal Initiation of New Technology
Technological Development
leveraging intellectual assets as a potent tool to underpin a sustainable future and propel business expansion. In its Proposals
· Synergistic Collaboration with Startups
current phase, characterized as the “second founding,” Honda aspires to evolve into an enterprise capable of forging Evaluating Technological Dominance · Competitive Analysis Across Value Chains
Competitive Analysis
new growth trajectories and fostering innovative value creation. To propel this transformative journey, we have and Identifying Core Technologies · Establishing Competitive Advantage through KPI Setting

chosen five key factors as our focus areas.

Honda has established KPIs to achieve competitiveness in these focused technologies, and is executing a value IPL-Driven Strategy Update Cycle
creation process that incorporates analysis using intellectual property information (Intellectual Property Landscape, IPL). We will update our corporate and technological strategies through these two types of IPL, enhancing the
Furthermore, aiming to accelerate the alignment between technological strategy and intellectual property precision of our strategies and strengthening our competitive advantage.
strategy in the formulation and execution of corporate strategy, the Intellectual Property division was placed under the
Corporate Strategy Operations starting from April 2023. We are strengthening the strategic role of the intellectual STEP 4
Competitive Analysis
property department, including its participation in the Technological Strategy Meeting, which formulates medium- to Corporate and
Technological
long-term technological strategies. Strategies Development Proposal
Update

Ratio of Patent Applications in Focus Areas and Existing Technology Areas

(%) KPIs Set to Establish Honda’s Competitive
STEP 1 STEP 2 STEP 3
100 Advantage
Focus Area IPL R&D IPL
80
60
Key Carbon Neutrality of Power Units IP Creation Variance
factors Analysis
40 Energy Management System Increasing
20 Existing Technology Area Corporate
0 Resource Circulation Value
2015 2016 2017 2018 2019 2020 2021 (Year)
AD/ADAS STEP 1 IPL
Through the IPL, we visualize both Honda’s current technological competitiveness and the desired state,
IoT/Connected enabling the establishment of necessary KPIs to attain the targeted level of competitiveness.
STEP 2 R&D (IP Creation)
As R&D progresses, intellectual property is generated as a result, bringing us closer to the envisioned
Strategic Utilization of the IPL outcomes.
STEP 3 IPL (Variance Analysis)
In this phase of the IPL, we scrutinize the progress in both our own and our competitors’ technological
For enhancing competitiveness in the focus areas, we have identified priority technology areas in addition to five advancements. This assessment guides the monitoring of KPI attainment, a pivotal step in augmenting
our technological supremacy. Insights gained from the assessment, along with required measures, are
key factors. Honda adopts an approach of advancing the targeted technology creation, through a comparative assimilated into our corporate and technological strategies. These measures may encompass development
proposals.
analysis of technological advantages using IPL.
STEP 4 Update of Corporate and Technological Strategies
Guided by IPL insights, our corporate and technological strategies are revised, fostering the technological
development that heightens strategy precision and elevates competitiveness. This iterative cycle begets
IPL Categories additional intellectual property, translating into future value creation.
There are two categories within the IPL framework. First, the development proposal category involves a meticulous
exploration of untapped technological realms. This encompasses the identification of burgeoning or nascent
technologies, an appraisal of their future potential and competitiveness, and the formulation of development and As described above, the strategy update cycle utilizing IPL has become a crucial process for Honda to
business proposals. Should these proposals demonstrate value, they are integrated into our corporate and technological continuously create corporate value and maintain competitive advantage. Starting with these five key factors,
strategies. Honda is applying them to strengthened technological areas, setting the creation of competitive intellectual
Second, we have the competitive analysis category of IPL. This variant serves three fundamental purposes: (1) discerning assets as a KPI and engaging in the pursuit of new value creation.
Honda Report 2023 53
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Creation of Innovative Technologies | Challenges in New Fields

Honda’s Hydrogen Ecosystem

Among the five key factors that Honda focuses on, regarding the carbon neutrality of power units, in addition to Takashi Mochizuki
the battery-related efforts mentioned in the “Electrification Business Strategy” (➡p.15), Honda is strengthening its Department 3
Energy Unit Research and
efforts towards commercialization by positioning “hydrogen,” which is anticipated as a clean energy source, as the Development Division
Innovative Research Excellence,
next-generation energy. Power Unit & Energy
Engaged in research and
Honda has engaged in hydrogen technology and fuel cell vehicles, predating its competitors by a significant development of hydrogen fuel
margin since the late 1990s. Commencing with the R&D of fuel cells, which convert hydrogen and oxygen into cells “FC Stack.”
Favorite motto
electricity, we have progressively enhanced performance while systematically addressing usability challenges. “Listen carefully to each person’s
opinion.”
This includes refining fuel cell dimensions, reducing costs and enhancing durability. The ensuing iteration of Honda-ism which he has empathy
fuel cell technology, developed in collaboration with GM since 2013, will be integrated into the forthcoming “Before technology, we are all
equal. The substance of ideas is
generation of FCVs. Our intent is to expand the reach of this core technology—our next-generation fuel the real challenge.”

cell system—not solely to our FCVs but also across an array of domains, encompassing commercial vehicles,
stationary power sources, construction machinery and diverse industrial equipment. We will aim to build a
hydrogen ecosystem.
Collaboration and cooperation with entities constituting the hydrogen value chain, spanning supply facets, Interview ––––––––––––
stand as imperative in the establishment of a comprehensive hydrogen ecosystem. Our engagement entails
fostering partnerships with companies pivotal to the hydrogen station network’s expansion. Notably, our To Become a Global Leader in the Field of Hydrogen Fuel Cell
involvement with the Japan Hydrogen Station Network underscores our dedication to this pursuit. Moreover, Technology
we collaborate with industry players such as Shell and FirstElement Fuel, actively engaged in the hydrogen Ever since my childhood, I’ve held a strong interest in environmental issues and even conducted independent
station domain in North America. Supplementary to these endeavors, we have embarked on exploratory studies on fluctuations in Japan’s average temperatures. My introduction to Honda occurred during my
research into the potential applications of hydrogen technology in the aerospace sector, marking yet another university years. I delved into research on fuel cells during my time at university, and serendipitously, my research
prospective avenue. Through these series of initiatives, we will contribute to the realization of a carbon-neutral lab was engaged in a collaborative project with Honda. I vividly recall one of Honda’s technical experts visiting
society by promoting the development of a comprehensive hydrogen ecosystem across the entire community. our lab, radiating genuine enthusiasm and delight for their work. This experience left a lasting impression on
me, leading me to reflect, “Honda is a company where work is conducted with such freedom and joy.”
Provide Clean Mobility and Reliable Power Solutions through the Intelligent Combination of Electricity and Transitioning to fuel cell vehicles that emit zero CO2 could yield a substantial environmental benefit. To truly
Hydrogen Energy
execute Honda’s electrification business strategy, we must direct our attention not solely to batteries but also
Realization of a Carbon-Neutral Society emphasize the significance of fuel cells. We have been committed to advancing R&D efforts, aiming to broaden
Renewable Energy the scope of hydrogen fuel cell applications across a variety of sectors, encompassing passenger cars, commercial
Natural Energy Acquisition Renewable Energy Supply vehicles, trucks and stationary power sources.
The Joy of Mobility
The advantages of hydrogen fuel cells encompass more than just environmental impact reduction; they
FCV
EV FC also encompass the utilization of hydrogen as an energy carrier. Unlike electricity, which is difficult to store in
Long-Distance Commercial Electrification
Hydrogen Transportation Vehicles Expansion substantial quantities for extended periods, hydrogen can be stored over long durations. For example, surplus
Production Production H2 Reliable Power Larger Scale and
H2 FC Supply Longer Distance electricity produced at night can be converted into hydrogen and stored for later use. This becomes notably
Power
Intercontinental
Supply valuable for island nations like Japan, which face limitations in abundant energy resources like oil. In the realms
Long-Term Mass
Storage Transport
H2 Energy Storage FC Construction
Machinery of energy management and supply, I am convinced that our research assumes a crucial role.
H2 H2 H2 H2
H2 Honda plays a significant role in mitigating environmental impact. To sustain its position as a global
FCV
Pipeline Transport H2
frontrunner in environmental initiatives, my aspiration is for Honda to strive for world-class standing in the fuel
Transportation Utilization
cell sector.
Honda Report 2023 54
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Brand Value Enhancement Enhancement of Consistent Brand Management

Towards Brand Value Enhancement
Honda brand has been shaped by the accumulation of every individual business activity, walking hand in hand
with customers from its founding to the present. We recognize that enhancing Honda brand, which has been
crafted over 75 years of history, and elevating its value for the future is a critically important objective for
Honda.
In this period of significant transformation, we have redefined our global brand slogan, “The Power of

The dreams of each and every one of us working together have Dreams,” with the aim of clearly demonstrating the value it creates for customers worldwide and uniting all
associates to collectively work towards a common purpose. We believe that taking this beyond mere “words”
always been the driving force of Honda.
and aligning it with all aspects of our corporate activities, including products and services, and connecting it
to consistent implementation leads to the creation of an evolved Honda brand.
We have different kinds of dreams, but by applying our original Based on this mindset, we position the redefined global brand slogan as the cornerstone of Honda’s brand

technologies, ideas and design we take on challenges management, projecting the underlying beliefs onto various brand assets to establish a core of consistent
branding. We aim to establish an appealing brand that resonates with stakeholders by developing branding
continuously to realize mobility that enables our customers to
based on a solid and unwavering common foundation, both within and outside the company. This will support
enjoy life with more freedom, more convenience and more fun. and drive creativity powered by the “dreams” of all associates working at Honda.
Furthermore, we will monitor the effectiveness of this brand management through the “Brand Value”

The future mobility Honda dreams of will create a joy and published by Interbrand, using it as a performance indicator to drive further advancements in our initiatives.

freedom of mobility that enables people to transcend the

constraints of time and place, and augment their every possibility. Honda’s Brand Management

Investor relations
Website
Such mobility will become the “power” for people who are trying 裏表紙 activity 表紙
Social media Exhibition
to advance toward their own dreams. Products Services

Honda Report
Dreams that will move even more people, until there is an Recruitment
activity
Advertising
Sales activity
endless expanse of new dreams. External Branding

A brand that inspires

empathy and resonance

The Power of Dreams

Honda Report 2023
Global Deployment and Expansion of “Brand Assets”
Redefining the Honda
Global Brand Slogan
Through the creation of mobility we dream of, Honda will A brand where each
individualʹs creative power
become “The Power of Dreams” of more and more people. is fueled by dreams

That is how we will move people and society forward. Internal Branding

In-house

2023
In-house training communication tool In-house event
* Measuring the effectiveness by using
brand value as an indicator and implementing Workplace
Personnel system environment
actions based on the results.

See p.4 Global Brand Slogan

Honda Report 2023 55
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance Corporate Governance

Basic Approach

Enhancing Corporate Governance to Become “A Company People and Society Want to Exist”
As a key task for management, Honda strives to enhance its corporate governance based on the Company’s broad delegation of the business execution authority from the Board of Directors to the Executive Officers.
basic principle to strengthen the trust of its shareholders/investors, customers and society; encourage Honda is making efforts to appropriately disclose corporate information including the release and
timely, decisive and risk-considered decision-making; seek sustainable growth and enhance corporate disclosure of quarterly financial results and management policies in a timely and accurate manner to
value over the medium- to long-term; and become “a company people and society want to exist.” bolster the trust and appreciation of shareholders/investors, customers and society. Going forward, Honda
To clearly segregate the supervisory and execution functions of management, strengthen the will continue to strive to ensure the transparency of its management.
supervisory function and enable prompt and flexible decisions, Honda has created a Nominating
Committee, Compensation Committee and Audit Committee, each of which is composed of over 50% “Honda Corporate Governance Basic Policies” “Corporate Governance Report”
WEB
Outside Directors. Honda has also adopted a “company with three committees” structure, which allows the https://global.honda/en/investors/policy/governance.html

Corporate Governance Structure (as of June 21, 2023)

Resolution for the election/dismissal of directors Election/Dismissal

General Meeting of Shareholders Accounting Auditors

Election/Dismissal
Supervisory Audit
function Office of the Assistance
Board of Directors 11 Directors (including 5 Outside Directors)
Board of Directors Supervision/
Audit Resolution for Report Evaluation
Election/Dismissal/Supervision of committee members the election/
dismissal of
accounting
Determining compensation auditors

Nominating Committee 4 Directors (including 3 Outside Directors) Compensation Committee 4 Directors (including 3 Outside Directors) Audit Committee 5 Directors (including 3 Outside Directors)

Election/Dismissal/Supervision/Delegation of authority of Executive Officers Determining compensation Supervision Audit

Execution Report
Executive Council (Representative Executive Officers and Executive Officers)

Report Report Report Report

Compliance Officer Risk Management Officer

Business Ethics Supervision/
Proposal/
Kaizen Report delegation Audit Division
Compliance Committee Risk Management Committee of authority
Report
Proposal Line
Compliance Risk Management

Proposal Report Report

Respective Operations and Supervisory Units (Regional/Business/Functional)/Subsidiaries

Internal audit

Honda Report 2023 56

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance | Corporate Governance

Decision-Making for Executing Business Matters Nominating Committee

Adopting a Company with Three Committees System The Nominating Committee determines the content of the Ratio of Outside
Directors
Attendance rate
(FY2023)
proposals for the appointment or removal of Directors to be
Honda has adopted a “company with three committees” system to delegate the decision-making authority submitted to the general shareholders’ meeting and performs other
of the Board of Directors to execute important business matters to the Executive Officers in accordance duties prescribed by laws and regulations and the Articles of
with the provisions of the Company’s Articles of Incorporation and resolutions approved by the Board. This Incorporation. The Nominating Committee is composed of four
system enables quick decision-making and prompt business execution while clearly separating the Directors, including three Outside Directors.
75% 100%
functions of management supervision and business execution so that the Board is focused on overseeing The Chairperson of the Nominating Committee is selected from (3 persons/ (held 12 times)
4 persons)
business execution. among the Independent Directors.
The Board of Directors has established criteria for deliberation and has delegated some of its authority
to the Executive Council, which, in turn, delegates some of its authority to the Business Operating Board.
The Executive Council conducts preliminary deliberations on matters to be resolved by the Board of Compensation Committee
Directors and deliberates on important management matters within the scope of the authority delegated The Compensation Committee makes determinations regarding the Ratio of Outside Attendance rate
Directors (FY2023)
by the Board of Directors. The Business Operating Board deliberates important management matters in details of compensation for each Director and Executive Officer and
each area within the scope of the authority delegated by the Executive Council. carries out other duties as prescribed by laws and regulations and
the Articles of Incorporation. The Compensation Committee is
composed of one Director and three Outside Directors. The
Board of Directors chairperson is selected from among the Independent Directors.
The Board of Directors is comprised of six Directors and five Outside Directors. 75% 100%
(3 persons/ (held 11 times)
To respond to the mandate of the shareholders to achieve sustainable growth and enhance the 4 persons)

corporate value of the Company over the medium- to long-term, the duties of the Board of Directors
include making decisions concerning key Company matters, such as its basic management policies, and the
monitoring of operations by Directors and Executive Officers. Additionally, the Board of Directors discusses Audit Committee
and makes decisions concerning matters specified in the regulations of the Board of Directors as well as To respond to the mandate of the shareholders, the Audit Ratio of Outside Attendance rate
Directors (FY2023)
matters set forth in the Articles of Incorporation and applicable laws. All other matters are delegated to Committee conducts audits of the execution of duties by the
the Representative Executive Officers or Executive Officers. Directors and Executive Officers and performs other duties as
To fulfill the above roles, the candidates for Director, regardless of gender, nationality, or other personal prescribed by laws and regulations and the Articles of
attributes, shall be persons of superior character and insight who are experts in company management, Incorporation to ensure the sound and sustainable growth of the
laws, politics, accounting, education, or the Company’s business. The Nominating Committee shall consider Honda Group. The Audit Committee is composed of two Inside
the balance of gender, nationality, knowledge and related experience among the candidates. Directors and three Outside Directors. The Chairperson of the 60% 100%
(3 persons/ (held 11 times)
Audit Committee is selected from among Independent Directors. 5 persons)

Term of office Attendance rate (FY2023) Percentage of Percentage of Percentage of To ensure the effectiveness of the audit, full-time member(s) of the
Outside Directors* Non-Executive Directors Female Directors
Audit Committee are elected by resolutions of the Board of
45.5% 72.7% 18.2%
(5 persons / (8 persons / (2 persons/ Directors.
11 persons) 11 persons) 11 persons)

Average term of office

100%
3.7years (held 10 times)

■ 0-4 years 8 persons

■ 5-9 years 3 persons * All five Outside Directors currently in office are Independent Directors
57
■1 0 years or longer 0
person
who satisfy the Company’s Criteria for Independence of Outside Directors. Honda Report 2023
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance | Corporate Governance

Board and Committee Members

Attendance in FY2023
Skills
(Attendance/Number of times held)
Term
Name of Position Responsibilities Legal &
Compensa- Corporate Industrial New Account- ESG &
office Board of Nominating Audit Interna- risk
tion manage- experi- business HR ing & sustain-
Directors Committee Committee tionality manage-
Committee ment ence strategies finance ability
ment

Seiji 8 years 10/10

· Chairman and Director ·C
 hairman of the Board of Directors - - - ● ● ● ● ● ●
Kuraishi (total) 100%

· Director
Toshihiro · President and ·M
 ember of the Nominating Committee 10/10 12/12
3 years - - ● ● ● ● ● ● ●
Mibe Representative ·C
 hief Executive Officer 100% 100%
Executive Officer

· Director ·M  ember of the Compensation Committee

Shinji 5 years · Executive Vice President ·C  hief Operating Officer 8/8
- - - ● ● ● ● ● ● ●
Aoyama (total) and Representative ·R  isk Management Officer 100%
Executive Officer · I n charge of government and industry relations

·C
 hief Officer for Regional Operations (North
Noriya · Director
4 years America)
· Senior Managing - - - - ● ● ● ●
Kaihara (total) ·P
 resident, Chief Executive Officer and Director of
Executive Officer
American Honda Motor Co., Inc.

Asako 10/10 11/11

2 years · Director ·M
 ember of the Audit Committee (full-time) - - ● ● ● ● ●
Suzuki 100% 100%

Masafumi 10/10 11/11

6 years · Director · Member of the Audit Committee (full-time) - - ● ● ●
Suzuki 100% 100%

Kunihiko · Member of the Nominating Committee 10/10 12/12 11/11

4 years · Director - ● ●
Sakai · Member of the Audit Committee 100% 100% 100%

Fumiya ·M
 ember of the Nominating Committee
10/10 12/12 11/11
3 years · Director (Chairperson) - ● ● ● ●
Kokubu 100% 100% 100%
·M
 ember of the Compensation Committee

Yoichiro ·M
 ember of the Audit Committee (Chairperson) 10/10 11/11 11/11
2 years · Director - ● ● ● ●
Ogawa ·M
 ember of the Compensation Committee 100% 100% 100%

Kazuhiro · Member of the Nominating Committee

10/10 12/12 11/11
2 years · Director · Member of the Compensation Committee - ● ● ● ● ●
Higashi 100% 100% 100%
(Chairperson)

Ryoko 10/10 11/11

2 years · Director · Member of the Audit Committee - - ● ● ●
Nagata 100% 100%

Honda Report 2023 58

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance | Corporate Governance

Reason for Appointment of Outside Directors Support Systems for Outside Directors

Five Outside Directors Having Abundant Experience and Board of Directors Office Providing Necessary Support as
Deep Insight Appropriate
Honda appoints Outside Directors who have abundant experience and deep insight and are capable of Honda’s Board of Directors Office plays a central role in providing the following support to Outside
overseeing the business management of the Company from an objective, highly sophisticated and broad Directors to ensure they can maximize their functions as Outside Directors.
viewpoint thanks to their independent position outside the Company. The Company has at least two
Outside Directors, and at least one third of the members of the Board of Directors are Independent 1. Orientation at the time the director assumes this role
Directors who fulfill the Company’s Criteria for the Independence of Outside Directors. All five Outside Honda provides training in industry trends as well as the Company’s history, business, finances,
Directors currently in office satisfy the Criteria for Independence of Outside Directors, and their interests organizations, internal control system and other matters to newly appointed Outside Directors.
are not in conflict with those of the Company or the shareholders. The five Outside Directors are specified
as Independent Directors as prescribed by a provision of the Tokyo Stock Exchange (TSE). The names of 2. Preliminary briefing sessions and information-sharing meetings
these Directors have been submitted to the TSE. Preliminary briefing sessions are held for Outside Directors in advance of each Board of Directors’ meeting
Please see the “Honda Corporate Governance Basic Policies” Annex 1 for Honda’s Criteria for the for the following purposes: to ensure that they fully understand the details and background of each
Independence of Outside Directors (Please use the link below.) If any Outside Director also serves as an agenda item to be submitted to the Board of Directors, its position in the medium- to long-term
officer at another listed company, such Director shall only serve at four companies other than the management plan, and other relevant information, and to ensure that the Board of Directors holds
Company so that they can secure sufficient time to perform their duties for the Company. substantial deliberations. Honda also provides opportunities for information-sharing and discussion
among Directors on important matters, such as the status of companywide risk management and the

WEB
“Honda Corporate Governance Basic Policies” progress of the medium-term management plan, as appropriate.
https://global.honda/en/investors/policy/governance.html

3. Opinion exchange meetings on matters of management concern

Mr. Kunihiko Sakai has high expertise and abundant experience as a legal affairs specialist having Honda holds opinion exchange meetings for Directors regarding matters of concern to management. These
served as Public Prosecutor and a lawyer, including posts of Superintending Prosecutor at High Public
Kunihiko Prosecutors’ Offices from July 2014 to March 2017. He has properly fulfilled his duties as Outside Director meetings aim to share with Outside Directors an awareness of the Honda Group’s long-term challenges and
Sakai who is an Audit and Supervisory Committee Member since June 2019, and as Outside Director and a
Member of the Nominating Committee and the Audit Committee since June 2021, by auditing and
directions to be pursued and to deepen their understanding of management initiatives. Such meetings are
overseeing the entire business management of the Company from an independent standpoint. also intended to utilize the knowledge of Outside Directors in discussing future management policies.
Mr. Fumiya Kokubu held positions of President and CEO, and Chairman of the Board of Marubeni Corporation
Fumiya from April 2013, and has abundant experience and deep insight regarding corporate management. He has
properly fulfilled his duties as Outside Director since June 2020, and as Outside Director, the Chairperson of
4. Dialogue with Executive Officers/dialogue among Outside Directors
Kokubu the Nominating Committee and a Member of the Compensation Committee since June 2021 by overseeing To facilitate forthright communication among Directors, Honda provides opportunities for dialogue
the entire business management of the Company from an independent standpoint.
between Outside Directors and Executive Officers or Directors, as well as dialogue among Outside
Mr. Yoichiro Ogawa has high expertise and abundant experience as an accounting specialist having served
as a Certified Public Accountant for many years, including posts of CEO of Deloitte Tohmatsu Group Directors as needed.
Yoichiro
from July 2015 to May 2018. He has properly fulfilled his duties as Outside Director, the Chairperson of
Ogawa the Audit Committee and a Member of the Compensation Committee since June 2021 by auditing and
overseeing the entire business management of the Company from an independent standpoint. 5. Inspection visits to business sites
Mr. Kazuhiro Higashi held positions of President and Chairman of Resona Holdings, Inc. from April 2013 Honda arranges inspection visits to its plants and other
Kazuhiro to June 2022, and has abundant experience and deep insight regarding corporate management. He has business sites as necessary to promote the Outside
properly fulfilled his duties as Outside Director, the Chairperson of the Compensation Committee and a
Higashi Member of the Nominating Committee since June 2021 by overseeing the entire business management Directors’ understanding of the Company’s business.
of the Company from an independent standpoint.

Ms. Ryoko Nagata held positions of Executive Officer and Audit & Supervisory Board Member of Japan
Ryoko Tobacco Inc. from June 2008 to March 2023, and has abundant experience and deep insight regarding
corporate management and audit. She has properly fulfilled her duties as Outside Director and a Member
Nagata of the Audit Committee since June 2021 by auditing and overseeing the entire business management of Inspection of the Saitama Factory’s assembly plant
the Company from an independent standpoint.
Honda Report 2023 59
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance | Corporate Governance

Evaluation of the Effectiveness of the Board of Directors

Conducting Questionnaire and Interviews in Each Fiscal Summary of Evaluation Results

Year to Increase Effectiveness
The results of the effectiveness evaluation confirmed that the effectiveness of the Board of Directors has
been adequately ensured through the following initiatives: setting appropriate items for deliberation and
Each fiscal year, the Company evaluates the overall effectiveness of the Board of Directors to confirm the frequency of meetings, providing information to Outside Directors and enhancing opportunities for
current status of the Board’s functions and with the aim of further improving its effectiveness and exchange of opinions, including business site visits, as well as the appropriate operation of the three
promoting understanding among shareholders and stakeholders. committees.
Going forward, the Company will further enhance the effectiveness of the monitoring-type Board of
Evaluation Process
Directors by stimulating discussion both within and outside the Board of Directors and by further
Under the Chairperson’s strengthening cooperation between the Board of Directors and the three committees.
External lawyers conduct supervision, the Board of Directors
Survey to all Directors
hearings and collect the discusses the evaluation results
(self-assessment)
results submitted by the Secretariat and
issues a resolution

Evaluation Results

Tasks for FY2022 Main initiatives for FY2023 Evaluation for FY2023 Tasks and initiatives for the future

Continued examination of the composition of

Discussing the need for formulating, disclosing and The current composition of the Board of Directors is Further deepening the discussion on the expertise
Composition the Board of Directors for further functional
revising the skill matrix in the Nominating Committee appropriate. and diversity of future Directors
enhancement

· The information provided is substantial.

· Additional information sharing matters for Outside
Further enhancement of timely information sharing · It was meaningful to have ample opportunities for
Shared Directors Provide information and inspection opportunities with
and opportunities for business site visits for Outside Outside Directors to visit business sites and events,
information · Enhancement of opportunities for Outside a greater focus
Directors which deepened their understanding of the business
Directors to visit business sites and events
and allowed them to experience the corporate culture.

· Setting up opportunities for information sharing

Agenda Further enhance opportunities to share information · Discussion items are narrowed down to important
and discussion regarding the direction of the next
items for and exchange opinions about the progress status matters. Enhancing Board discussions through effective setup
management plan.
deliberation, of the medium-term management plan and the · Information sharing/opinion exchange of information sharing/exchange opportunities
· Conduct a meeting to exchange views on
etc. direction of the next term plan opportunities are effective.
management-related concerns

Update proposals and explanations on the day of · Active debates are underway.
Deliberation Further revitalization of discussions in the Board of Further revitalization of discussions in the Board of
the event as appropriate, based on questions and · Each Director provides insightful opinions and
at meetings Directors Directors (Continued)
discussions raised at the pre-briefing questions.

Report the deliberation status of each committee

Maintaining and enhancing coordination between The deliberation status of each committee is being Maintaining and enhancing coordination between
Committee at the Board of Directors meeting immediately
committees and the Board of Directors properly reported to the Board of Directors. committees and the Board of Directors (Continued)
following the committee meeting

Honda Report 2023 60

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance | Corporate Governance

Remuneration Structure for Directors and Executive Officers Total Amount of Remuneration by Category
Remuneration Structure Linked to Medium- to Long-Term Total amount by type of remuneration
Business Performance Total amount
(millions of yen) Number of
eligible
Category of of Performance-linked
directors
The Company views remuneration for Directors and Executive Officers, the key to its corporate governance, Directors remuneration Basic remuneration
(Number of
(millions of yen) remuneration STI (Short Term LTI (Long Term persons)
as an important driving force in realizing our fundamental beliefs, management policies and aspirations.
Incentive) Incentive)
The Compensation Committee has established the following decision-making policy to encourage
Directors _
291 288 3 4
appropriate risk-taking and accurately reflect management responsibility to promote speedy reforms and (excluding Outside Directors)
thus achieve our vision amidst a rapidly changing environment. Outside Directors 90 90 _ _ 5
The Company’s remuneration structure for Directors and Executive Officers is designed to motivate Executive Officers 794 282 229 283 6
associates to contribute to the improvement of the Company’s business performance not only over the
Total 1,175 660 229 286 15
short-term but also over the medium- to long-term so that the Company can continuously enhance its
corporate value. The structure consists of monthly remuneration, a fixed amount paid each month as · “Directors” in the table above does not include the three directors who concurrently serve as Executive Officers.
· These amounts indicate the remuneration paid to directors during the fiscal year. The above includes the amount paid to
remuneration for the execution of duties; a short term incentive (STI) based on business performance for the one director who retired at the closing of the 98th Ordinary General Meeting of Shareholders held on June 22, 2022, and
the amount paid to one Executive Officer who retired on May 31, 2022.
relevant fiscal year; and a long term incentive (LTI) based on medium- to long-term business performance. · The amount of STI for Executive Officers was determined by the Compensation Committee held on June 15, 2023.
Monthly remuneration shall be paid as a fixed amount each month based on the remuneration standards · The total amount of LTI is the expenses recorded for stock delivery points granted during the fiscal year in relation to the
Directors’ remuneration Board Incentive Plan (BIP) trust and falls under non-monetary remuneration.
decided by the Compensation Committee.
STI shall be determined and paid by the resolution of the Compensation Committee, taking into
consideration the business’s performance in each fiscal year. Remuneration of Accounting Auditors
Based on the standards and procedures approved by the Compensation Committee, LTI is based on Determining Remuneration with Prior Approval to Uphold
Independence
the business’s medium- to long-term performance and paid in the form of Company shares and cash to
function as a sound incentive for sustainable growth.
The remuneration paid to Directors - who concurrently serve as Executive Officers - and Executive The Company undergoes accounting audits by KPMG AZSA LLC under the Companies Act of Japan, the
Officers shall consist of monthly remuneration, STI and LTI. The composition rate shall be determined Financial Instruments and Exchange Act of Japan, the Securities Exchange Act of 1934 (United States) and
based on the remuneration standards decided by the Compensation Committee. The composition ratio of the Exchange Act of 1933 (United States).
variable compensation shall increase according to the responsibilities assumed by the individual. The duration of continuous auditing by KPMG AZSA LLC is 18 years.
The remuneration paid to Outside Directors and other Directors who do not concurrently serve as This period refers to the period during which KPMG AZSA LLC, the current auditor, has continuously
Executive Officers shall consist only of monthly remuneration. audited the consolidated financial statements and financial statements included in the Company’s
To advance the Company’s sustainable growth and enhance its corporate value over the medium- to Securities Report. In addition, KPMG, to which KPMG AZSA LLC belongs as a member firm, has been
long- term from shareholders’ perspectives, even Directors and Executive Officers who are ineligible for LTI conducting audits of the Company for U.S. SEC registration purposes since 1962.
shall acquire the Company’s stock by contributing a certain portion of their remuneration to the Officers A total of 80 staff members at KPMG AZSA LLC have been engaged in the auditing services, including
Shareholding Association. 3 certified public accountants (Masahiko Chino, Isao Kamizuka and Takeshi Kamada), who are responsible
Throughout their term of office and for one year after their retirement, Directors and Executive for the execution of the accounting audits, and 77 assistant members (24 certified public accountants and
Officers shall continuously hold Company stock acquired as an LTI or through the Officers Shareholding 53 other members).
Association. In deciding the remuneration for auditing services by the certified public accountants, etc., the
Please see Article 13 of “Honda Corporate Governance Basic Policies” for information on the policy for Company consults with the Accounting Auditors and takes into consideration various factors, including
determining remuneration for Directors. (Please use the link below.) the size and characteristics of the Company and the audit schedule. To maintain the independence of the
Accounting Auditor, prior approval by the Audit Committee is obtained for the audit remuneration.
“Honda Corporate Governance Basic Policies”
WEB
https://global.honda/en/investors/policy/governance.html
Honda Report 2023 61
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance Compliance
Honda Code of Conduct Compliance Committee

Formulation and Dissemination of Integrity Guidelines to Establishment and Operation of Committees to Improve
be Observed by Honda Associates around the World the Group’s Compliance
To earn the trust of customers and society and achieve sustainable growth, we must not only comply with To improve compliance in the Honda Group, Honda has established a Compliance Committee, headed by a
laws and regulations but also practice sincere and ethical conduct. Compliance Officer designated by the Board of Directors. This Committee is composed of the Compliance
Recognizing this, Honda has formulated the Honda Code of Conduct, which summarizes the integrity Officer as well as Executive Officers and other Executives who are appointed by the Executive Council. The
of conduct to be practiced by all Honda associates around the world, and shares it throughout the Group, Committee determines important measures for the internal control system, including the formulation and
including subsidiaries in Japan and overseas. revision of compliance policies, checks the status of the development and operation of the internal control
The Company works to instill the Honda Code of Conduct in each and every associate through system, supervises the proper operation of the Business Ethics Kaizen Proposal Line and decides measures
awareness-raising activities such as distribution of leaflets and posters, publication of in-house newsletters, to prevent recurrences of serious compliance-related matters when they arise. When a particularly
distributing educational videos and introducing case studies and other information on the intranet, as well important compliance-related matter arises, it will be deliberated or reported at a meeting of the
as conducting training sessions. The status of these activities is regularly reported to the Compliance Executive Council or the Board of Directors, depending on the nature of the matter.
Committee after confirmation by each division and subsidiary of the Company. For more information, The Compliance Committee met five times (four regular meetings and one extraordinary meeting) in
please see the “Honda Code of Conduct.” FY2023 to report on the status of development and operation of internal control systems as well as the
operation status of the Business Ethics Kaizen Proposal Line, among other things. There were no major
Honda Code of Conduct violations of laws or regulations in FY2023.
WEB
https://global.honda/en/about/codeofconduct.html

社長メッセージ

創業以来、Hondaは、基本理念である「人間尊重」と「三つの喜び」を基軸に世界の人々と喜びを
分かち合い、「存在を期待される企業」となることを目指してきました。今では、二輪・四輪・ライフ
クリエーションそれぞれの領域で、世界中の多くのお客様にさまざまな製品を通じた価値を提供する

ことができるようになっています。このように成長できたのも、わたしたちが常にお客様や社会に
対し誠実に接してきた結果と考えています。Hondaは、2016年に世界中のHondaで働く全ての人々
が実践するべき誠実な行動をまとめたものとして「Honda行動規範」を制定しました。皆さんが

「Honda行動規範」を理解し、日々の業務や行動で実践されていると感じています。

Hondaの事業を取り巻く環境は大きな変革期を迎え、環境や安全へのさらなる取り組みが喫緊の課

題となっています。Hondaも社会からの期待に早いスピードで応えていかなければなりません。また、
将来に向けては、Hondaの強みである「独創性」を最大限に生かして、空、海洋、宇宙、ロボットと
いった領域へも挑戦し、新たな価値を提供し続けていきます。

これらの実現においても、まずお客様や社会に対し誠実で倫理的であることが重要です。たとえ、

Honda 行動規範
どんなに優れた製品やサービスを提供できたとしても、わたしたちの行動が誠実で倫理的でなければ、

お客様や社会からの信頼や共感を得ることはできず、Hondaのさらなる成長は見込めません。

どのような環境の中であっても、常にお客様や社会に誠実であることがHondaを支える原点であり、

不変の考え方です。引き続き、一人ひとりの行動がHondaを代表しているとの自覚を強く持ち、
「Honda
行動規範」に従った誠実で倫理的な行動を実践していただくようお願いします。

取締役 代表執行役社長

010_0771569932110.indd 1 2021/08/02 18:51:35

Honda Code of Conduct Honda 1 行動規範

In-house newsletters
010_0771569932110.indd 1 2021/08/02 18:51:35

Honda Report 2023 62

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance | Compliance

Business Ethics Kaizen Proposal Line Initiatives to Prevent Bribery and Corruption

Establishment and Operation of a Consultation Desk that Developing and Disseminating Anti-Bribery Policies to
Provides Consultation from a Fair and Neutral Standpoint Ensure the Soundness of Corporate Activities
Honda established the Business Ethics Kaizen Proposal Line as a structure for improving corporate ethics issues. Honda prohibits bribery and corruption.
This hotline accepts proposals and provides consultation from a fair and neutral standpoint, for any violations The Honda Code of Conduct requires that the Company complies with laws and regulations, and states
of laws/regulations or internal rules in the workplace, and issues that are difficult for associates to remedy or that “as an independent corporate entity, Honda maintains appropriate relationships with political entities
resolve in the workplace for some reason, such as difficulties in consulting with their superiors. (political organizations and politicians) and administrative entities (governmental agencies and government
Furthermore, in addition to cases of a clear violation of laws/regulations or internal rules, this hotline officials)” and “will interact with political and administrative entities in an appropriate manner in compliance
provides consultation and responds to inquiries about the details of internal rules when questionable cases with laws, regulations and company policies and will not offer politicians or government officials entertainment
have occurred and engages in fact checking related to such cases. Proposals are accepted by email, letter, or gifts (both monetary and non-monetary) that are prohibited by laws, regulations and company policies.”
telephone or fax from all subsidiaries and suppliers in Japan and overseas, as well as from the parent company. Moreover, the Code stipulates that the associates “will not receive from or provide to business partners benefits
This hotline ensures protection of the Kaizen proposers and accepts also anonymous proposals. in the form of goods (both monetary and non-monetary) or entertainment beyond what is generally
Moreover, the Company established a point of contact within an external law office to facilitate associates considered appropriate by society.”
to submit proposals. As for overseas, local points of contact have been established in all Regional Operations, In addition to the above, the Company also established the Honda Policy on the Prevention of Bribery and
while some subsidiaries set up their own points of contact. Corruption, which stipulates basic policy about bribery and corruption, and the Honda Guideline for the
In FY2023, 333 proposals and consultations were handled by the Business Ethics Kaizen Proposal Line Prevention of Bribery and Corruption, which stipulates specific compliance items and prohibited items. These
(including points of contact outside the Company). Among these, 164 concerned the parent company, 160 are posted on the intranet for Honda associates along with related educational content.
concerned subsidiaries and 9 concerned other matters. Honda strives to further reduce the risk of bribery and corruption by educating all associates on the bribery
Following investigations of the proposals and consultations submitted, disciplinary action was taken in four and corruption prevention through awareness-raising activities in accordance with the Honda Code of
cases in the parent company and six cases in subsidiaries in FY2023. There was no case involving the Company that Conduct, and by providing training to personnel stationed overseas and newly appointed managers based on
resulted in punitive dismissal. None of the cases involved violations of the Honda Policy on the Prevention of Bribery. their positions and roles. Regarding its subsidiaries, Honda has launched training programs, matched to
In order to raise internal awareness of the points of contact, Honda provides notice on its intranet, conditions in each company, aimed at raising awareness.
distributes information cards to all associates, including fixed-term associates and temporary workers, and
displays information posters in each workplace. These tools clearly state that the Kaizen proposers are
protected. In addition, Honda observes how well these points of contact are recognized through an annual
associate vitality survey for all associates. For departments found in these surveys to have low recognition of the
points of contact, the Company makes additional efforts to increase their awareness.

Proposals and Consultations with the Business Ethics Number of Disciplinary Actions Taken as a Result
Kaizen Proposal Line (including External Contacts) of Investigating Cases Proposed to the Office
■ Concerning Honda ■ Concerning subsidiaries ■ Other ■ Concerning Honda ■ Concerning subsidiaries
(Cases) (Cases)
500 445 20
429 17
400 350 358
333 15 13
300 11
10
10
200
5
100 5

0 0
2019 2020 2021 2022 2023 (FY) 2019 2020 2021 2022 2023 (FY)

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 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance Risk Management

Risk Management Committee Company-Wide Priority Risks

Responding Flexibly to the Complexity and Uncertainty of Identifying Company-Wide Priority Risks and Addressing
Risks them in the Lead Department
The business environment has undergone drastic changes in recent years in all business categories. In FY2023, Honda also identified company-wide priority risks, which have been addressed mainly by the
Accordingly, the complexity and uncertainty of risks are rising, which requires effective risk management responsible departments. In the meantime, the status of progress has been confirmed and discussed by the Risk
activities. Honda set up the Risk Management Committee chaired by a company-wide Risk Management Management Committee.
Officer (RMO), to identify, discuss and monitor important risks from a holistic perspective. The Risk
Management Committee not only identifies internal risks but also gathers and monitors information on Company-wide priority
Risk perspectives
external risk trends associated with changes in the external environment. The Committee uses internal and risk items

external information to ascertain specific risk scenarios and conduct impact analyses in relation to Honda’s Stoppages or delays of corporate activities due to the strengthening of economic security
Geopolitical risk policies and human rights laws and regulations, or the conflicts between nations or regional
business strategies. Based on this objective risk analysis, management members engage in discussions to conflicts
determine the response policies and structures for the company-wide risks that Honda should address that
Purchasing and Stoppages or delays of production activities due to difficulties in receiving parts supplies from
are consistent with its management strategies. Of these, risks that are particularly important in terms of procurement risk suppliers or increases in the prices of raw materials and parts, etc.
business strategy are designated as company-wide priority risks, and the status of response to these risks is
Information security Suspension of important operations/services due to cyberattacks and other incidents, leakage
regularly checked and discussed. The discussions and monitoring activities of the Risk Management risk of confidential or personal information
Committee are reported to the Executive Council in a timely and appropriate manner.
Business alliances and Disagreements among partners regarding business, leakage of profit or technology, delays in
joint ventures risk decision-making
Risk Management Committee Executive Council

Costs incurred in response to climate change regulations and fuel consumption and emissions
Environmental risk
regulations in various countries
Risk Management Committee
Intellectual property Infringement of Honda’s intellectual property rights or payment of expensive compensation or
(7) Instructions for policies risk licensing fees
(6) Determination of response
policies and structures
Stoppages or delays of corporate activities due to natural disasters (earthquakes, floods, etc.)
Natural disaster risk
or spread of infectious diseases

(5) (3) Financial and economic

Spec- Risk Operations and Business impact from economic trends, economic fluctuations, or currency fluctuations
risk
ifying scenario Supervisory Units
response refine-
measures ment (9)
Proposal / Risk related to brand
Business impact associated with damage to brand image
reporting image
(4) (8)
Impact Implementing
analysis response
measures
(1) (1)
Information Information
gathering / gathering /
External risk monitoring (2) Specifying risk scenarios / Setting monitoring Internal risk
information priority scenarios information

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 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance | Risk Management

Risk Assessment Activities Crisis Response

Foreseeing the Potential Risks to Honda’s Business and Monitoring, Reporting and Quickly Responding to Signs of Crisis
Responding Pre-Emptively Honda carries out risk-sensing activities to monitor and report on signs of a crisis. While collecting a wide range of
Honda globally carries out risk assessment activities. crisis information that may have an impact on Honda, the Company is also establishing an information
The purpose of these activities is to foresee the potential risks to Honda’s business and respond pre- coordination system in case a crisis becomes apparent.
emptively to minimize these risks. When a crisis occurs, the Company establishes a Global Emergency Headquarters proportionate to the
Each department performs an annual risk evaluation using the Group’s common risk items and anticipated magnitude of the crisis’s impact to manage the crisis response. In this way, Honda creates a structure
evaluation criteria to identify the divisional priority risks. to prevent the crisis from spreading and to quickly bring the situation under control.
Each of the Operations and Supervisory Units carries out repeated discussions based on the results of the Through its initiatives and experience, Honda’s Global Emergency Headquarters is working to strengthen its
risk assessments of each department. They then identify and respond to priority risks of the Operations and functions to better cope with future events.
Supervisory Units based on the judgment of Risk Management Officer of the Operations and Supervisory Units. Honda regularly holds Emergency Headquarters drills to verify its crisis response capabilities while also
Additionally, the status of priority risks of the Operations and Supervisory Units based on the risk promoting information coordination with each response team in our daily operations. Honda has held drills to
awareness of the Operations and Supervisory Units is reported to the Risk Management Committee. Internal simulate responses to an earthquake directly under the Tokyo metropolitan area and the Nankai Trough
and external risk trends are then considered in order to identify and respond to company-wide priority risks. earthquake. The Company has also reaffirmed (confirming cooperation between groups) how to respond to a
Through these efforts, Honda aims to firmly establish risk management activities within each Operations crisis occurring at multiple bases, as well as basic actions in its crisis response.
and Supervisory Unit, reduce the risk faced by the entire Group and raise the risk awareness of every Also, concerning disaster drills, besides ensuring the safety of human life and procedures to account for its
associate. associates, Honda continuously holds training on procedures from a Business Continuity Planning (BCP) viewpoint
to share information and identify the impact of a crisis on business at an earlier stage.
Risk Assessment Activity Structure Executive Council As a recent example of its crisis response, to counter COVID-19, Honda launched a Global Emergency
Headquarters. The Company promotes companywide, cross-sectional responses and strengthens functions by
Risk Management Committee reflecting on these responses.
In terms of COVID-19 status, the resumption of socio-economic activities is accelerating and the normalization
Risk awareness by top management Company-wide priority risks
(Risks associated with changes in the external environment) of production, development, purchasing, sales and other corporate activities is also underway at Honda.
Discussion and decision by the Risk Management Committee
Going forward, Honda will continue to strengthen our business foundation in areas such as production,
Operations and Operations and
development, procurement and sales. In the event of a resurgence of infections, we will prioritize the safety of
Operations and Supervisory Units
Supervisory Units Supervisory Units
stakeholders, including our customers, business partners and associates and take measures to minimize the
Priority risks Priority risks Priority risks negative impact on our business and performance from a business continuity perspective.
The decision of the Risk Management Officer Additionally, Honda is actively promoting company-wide, cross-sectional measures in collaboration with our
suppliers to minimize the impact of the semiconductor supply issue.
Each Division Each Division

Priority risks … Priority risks Global Emergency Headquarters Structure

Identify and assess risks Identify and assess risks 〈Risk items〉 〈Common evaluation criteria〉
Global Emergency Headquarters Manager

Identify priority risks Identify priority risks ● Status of Company-wide Risk Management Officer
● Business risk
countermeasures Head of Secretariat
● Environmental risk + ● Frequency of occurrence
Risk response Risk response
● Legal risk, etc. ● Magnitude of impact
Risk Manager

Operations Associate Response Financial Response Disaster Area Public Relations

Relevant Divisions
Response Group Group Group Response Group Response Group

Honda Report 2023 65

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance | Risk Management

Information Management

Protection of Information Assets, Including Confidential

and Personal Information, throughout the Group
To protect information assets, including confidential information and personal information, Honda has
formulated the Global Confidentiality Policy and the Global IT Security Policy, the scope of which extends to
Group subsidiaries. These policies stipulate the adoption of a systematic response structure, the use of global
compliance items when handling confidential information and personal information and the implementation
of security standards for information systems and networks. They also specify the line of reporting in the event
of an information leak.
As part of its efforts to effectively implement these policies, Honda has set up the Global Confidentiality
Committee, chaired by the Head of the Human Capital Unit, to ensure timely responses to changes in
information flows and other issues.
The Global Confidentiality Committee determines globally common medium-term policies and an annual
activity plan. Based on this plan, each Regional Confidentiality Committee takes the lead in promoting activities
to safely handle information obtained through Honda’s corporate activities, including personal information
and confidential information.
Besides continuously strengthening its activities to ensure information security against cyberattacks, which
are becoming increasingly sophisticated and complex, the Company performs daily monitoring while
establishing systems capable of immediately responding to events that must be addressed.

Global Emergency Headquarters Structure

Global Confidentiality Committee

(Chairperson: Head of the Human Capital Unit)

Regional Europe, Africa

North Asia and South
Confidentiality Japan China and the Middle
America Oceania America
Committee East

Confidentiality
Committee at each Local
Business sites Subsidiaries
business site/local subsidiaries
subsidiary

Honda Report 2023 66

 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance Directors and Executive Officers

Directors (as of June 21, 2023)

Chairman and Apr. 1982 Joined Honda Motor Co., Ltd. Apr. 2017 Chief Operating Officer Director Apr. 1987 Joined Honda Motor Co., Ltd. Jun. 2017 Director (Full-time Audit and Supervisory
Director Jun. 2010 Director Apr. 2017 In Charge of Strategy, Business Operations and
Masafumi Apr. 2012 General Manager of Regional Operation Committee Member)
Seiji Kuraishi Apr. 2011 Operating Officer and Director
Jun. 2011 Operating Officer (resigned from position as
Regional Operations
Jun.2017 Executive Vice President and Representative Suzuki
Planning Office for Regional Operations Jun. 2021 Director (present)
(Europe, CIS, the Middle & Near East and Jun. 2021 Full-time Audit Committee Member (present)
Chairman of
●
Director) Director Full-time Audit
● Africa)
the Board of Nov.2013 President of Honda Motor (China) Technology Apr. 2019 Director in Charge of Strategy, Business Committee Apr. 2013 General Manager of Accounting Division for
Directors Co., Ltd. Operations and Regional Operations Member Business Management Operations
Apr. 2014 Managing Officer of the Company Apr. 2019 Chief Officer for Automobile Operations
Apr. 2016 Senior Managing Officer Jun. 2021 Director, Executive Vice President and Director Apr. 1979 Public Prosecutor of Tokyo District Public Jun. 2018 Audit and Supervisory Board Member (Outside)
Jun. 2016 Executive Vice President, Executive Officer and Representative Executive Officer Prosecutors’ Office of Furukawa Electric Co., Ltd. (present)
Representative Director Jun. 2021 Compensation Committee Member Kunihiko Jul. 2014 Superintending Prosecutor of Takamatsu High Jun. 2019 Director (Audit and Supervisory Committee
Jun. 2016 Risk Management Officer Apr. 2022 Chairman and Director (present) Sakai Public Prosecutors’ Office Member) of the Company
Jun. 2016 Corporate Brand Officer Apr. 2022 Chairman of the Board of Directors (present) ●Nominating Sep.2016 Superintending Prosecutor of Hiroshima High Jun. 2021 Director (present)
Committee Public Prosecutors’ Office (resigned in March Jun. 2021 Nominating Committee Member (present)
Director Apr. 1987 Joined Honda Motor Co., Ltd. Apr. 2019 In Charge of Intellectual Property and
Member 2017) Jun. 2021 Audit Committee Member (present)
President and Apr. 2014 Operating Officer Standardization of the Company ● Audit
 Committee Apr. 2017 Registered with the Dai-Ichi Tokyo Bar Association
Representative Apr. 2014 Executive in Charge of Powertrain Business for Apr. 2020 Senior Managing Officer
Member Apr. 2017 Advisor Attorney to TMI Associates (present)
Executive Officer Automobile Operations Apr. 2020 In Charge of Mono-zukuri (Research &
Apr. 2014 Head of Powertrain Production Supervisory Unit of Development, Production, Purchasing,
Toshihiro Automobile Production for Automobile Operations Quality, Parts, Service, Intellectual Property, Director
Apr. 1975 Joined Marubeni Corporation May 2022 Chairman of Japan Machinery Center for Trade
Mibe Apr. 2015 Executive in Charge of Powertrain Business and Standardization and IT) Fumiya
Apr. 2013 President and CEO, Member of the Board of
Marubeni Corporation
and Investment (present)
May 2022 Chairman of Japan Foreign Trade Council, Inc.
Drivetrain Business for Automobile Operations Apr. 2020 Risk Management Officer
● Nominating
Committee Apr. 2015 Head of Drivetrain Business Unit in Automobile Jun. 2020 Senior Managing Director Kokubu Apr. 2019 Chairman of the Board of Marubeni (present)
Corporation (present)
Member Production for Automobile Operations Jun. 2020 Director in Charge of Mono-zukuri (Research ●Nominating Jun. 2019 Outside Director of Taisei Corporation (present)
● Chief Executive Apr. 2016 Senior Managing Officer and Director of & Development, Production, Purchasing, Committee Jun. 2020 Director of the Company (present)
Officer Honda R&D Co., Ltd. Quality, Parts, Service, Intellectual Property, Member
(Chairperson) Jun. 2021 Nominating Committee Member (Chairperson)
Apr. 2018 Managing Officer of the Company Standardization and IT) (present)
● Compensation

Apr. 2018 Executive Vice President and Director of Honda Apr. 2021 President and Representative Director Jun. 2021 Compensation Committee Member (present)
R&D Co., Ltd. Apr. 2021 Chief Executive Officer (present) Committee
Apr. 2019 President and Representative Director of Jun. 2021 Director, President and Representative Member
Honda R&D Co., Ltd. Executive Officer (present) Oct. 1980 Joined Tohmatsu & Aoki Audit Corporation Jun. 2018 Senior Advisor of Deloitte Tohmatsu Group
Jun. 2021 Nominating Committee Member (present) Director
(currently Deloitte Touche Tohmatsu LLC) (resigned in October 2018)
Yoichiro Mar. 1984 Registered as Japanese Certified Public Accountant Nov. 2018 Founder of Yoichiro Ogawa CPA Office (present)
Director Apr. 1986 Joined Honda Motor Co., Ltd. Apr. 2019 Chief Officer for Regional Operations (North
Ogawa Oct. 2013 Deputy CEO of Deloitte Touche Tohmatsu LLC Jun. 2020 Outside Audit & Supervisory Board Member of
Executive Vice Apr. 2012 Operating Officer America) of the Company Oct. 2013 Deputy CEO of Tohmatsu Group (currently Recruit Holdings Co., Ltd. (present)
President and Apr. 2013 Chief Officer for Motorcycle Operations Apr. 2019 President, Chief Executive Officer and Director
●Audit Committee
Member Deloitte Tohmatsu Group) Jun. 2021 Director of the Company (present)
Representative Jun. 2013 Operating Officer and Director of Honda North America, Inc.
(Chairperson) Jun. 2015 Global Managing Director for Asia Pacific of Jun. 2021 Audit Committee Member (Chairperson)
Executive Officer Apr. 2017 Chief Officer for Regional Operations (Asia & Oceania) Apr. 2019 President, Chief Executive Officer and Director ● Compensation
 Deloitte Touche Tohmatsu Limited (United (present)
Shinji Apr. 2017 President and Director of Asian Honda Motor
Co., Ltd.
of American Honda Motor Co., Inc.
Jul. 2021 Managing Officer in Charge of Electrification of
Committee Kingdom) (resigned in May 2018) Jun. 2021 Compensation Committee Member (present)
Aoyama Jun. 2017 Operating Officer of the Company (resigned the Company
Member Jul. 2015 CEO of Deloitte Tohmatsu Group
● Compensation from position as Director) Oct. 2021 Managing Executive Officer
Director Apr. 1982 Joined Resona Group Apr. 2020 Chairman and Director of Resona Holdings, Inc.
Committee Apr. 2018 Managing Officer Apr. 2022 Senior Managing Executive Officer
Member Apr. 2018 Vice Chief Officer for Regional Operations Apr. 2022 Chief Officer for Business Development Operations Kazuhiro Apr. 2013 Director, President and Representative (resigned in June 2022)
Executive Officer of Resona Holdings, Inc., Apr. 2020 Chairman and Director of Resona Bank, Limited
● Chief Operating (North America) Apr. 2022 Corporate Brand Officer Higashi Apr. 2013 Representative Director, President and (resigned in June 2022)
Officer Apr. 2018 Senior Executive Vice President, Chief Operating Jun. 2022 Chief Officer for Automobile Operations ●Nominating Executive Officer of Resona Bank, Limited Jun. 2020 Outside Director of Sompo Holdings, Inc.
● Risk Management Officer and Director of Honda North America, Inc. Jun. 2022 Director, Senior Managing Executive Officer
Committee Jun. 2013 Chairman of Osaka Bankers Association (present)
Officer Apr. 2018 Senior Executive Vice President, Chief Apr. 2023 Director, Executive Vice President and Member (resigned in June 2014) Jun. 2021 Director of the Company (present)
● In Charge of Operating Officer and Director of American Representative Executive Officer (present) ● Compensation
 Apr. 2017 Chairman of the Board, President, and Jun. 2021 Nominating Committee Member (present)
Government and Honda Motor Co., Inc. Apr. 2023 Chief Operating Officer (present) Committee Representative Director of Resona Bank, Limited Jun. 2021 Compensation Committee Member
Industry Relations Nov. 2018 President, Chief Operating Officer and Director Apr. 2023 Compensation Committee Member (present) Member Jun. 2017 Chairman of Osaka Bankers Association (Chairperson) (present)
of Honda North America, Inc. Apr. 2023 Risk Management Officer (present) (Chairperson) (resigned in June 2018) Jun. 2022 Senior Advisor of Resona Holdings, Inc. (present)
Nov. 2018 President, Chief Operating Officer and Director Apr. 2023 In Charge of Government and Industry Apr. 2018 Chairman of the Board, President, Jun. 2022 Senior Advisor of Resona Bank, Limited
of American Honda Motor Co., Inc. Relations (present) Representative Director and Executive Officer (present)
of Resona Bank, Limited
Director Apr. 1984 Joined Honda Motor Co., Ltd. Apr. 2020 Head of the Business Supervisory Unit for
Senior Managing Apr. 2012 General Manager and Automobile Quality Automobile Operations
Director Apr. 1987 Joined Japan Tobacco Inc. Mar. 2023 External Corporate Auditor of Medley, Inc.
Executive Officer Assurance Division Apr. 2021 Chief Officer for Customer First Operations
Ryoko Jun. 2008 Executive Officer of Japan Tobacco Inc. (present)
Noriya Apr. 2013 Operating Officer Apr. 2021 Risk Management Officer
Apr. 2013 Chief Quality Officer Jun. 2021 Managing Executive Officer Nagata Mar. 2018 Standing Audit & Supervisory Board Member of
Kaihara Jun. 2013 Operating Officer and Director Oct. 2021 Managing Officer Japan Tobacco Inc. (resigned in March 2023)
Audit Committee
●
Jun. 2021 Director of the Company (present)
● Chief Officer for Apr. 2014 Chief Officer for Customer Service Operations Oct. 2021 Chief Officer for Regional Operations (North
Member
Regional Operations Apr. 2014 Head of Service Supervisory Unit for America) (present) Jun. 2021 Audit Committee Member (present)
(North America) Automobile Operations Oct. 2021 President, Chief Executive Officer and Director
● President, Chief Apr. 2016 Chief Officer for Customer First Operations of American Honda Motor Co., Inc. (present)
Executive Officer Jun. 2017 Operating Officer (resigned from position as Apr. 2023 Senior Managing Executive Officer of the
and Director of Director) Company Executive Officers (as of April 1, 2023)
American Honda Apr. 2018 Managing Officer Jun.2023 Director, Senior Managing Executive Officer
Motor Co., Inc. Apr. 2018 Chief Officer for Purchasing Operations (present) For the detail information on Executive Officers, please click here (https://global.honda/en/about/management.html).
Director Apr. 1987 Joined Honda Motor Co., Ltd. Apr. 2020 Operating Executive
Apr. 2014 President of Dongfeng Honda Automobile Co., Ltd. Jun. 2021 Director (present)
Asako Suzuki Apr. 2016 Operating Officer of the Company Jun. 2021 Full-time Audit Committee Member (present)
Full-time Audit
● Apr. 2018 Vice Chief Officer for Regional Operations (Japan)
Committee Apr. 2019 Chief Officer for Human Resources and
Member Corporate Governance Operations

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 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Governance Messages from Outside Directors

We asked the chairpersons of the Committees for their impressions of the redefined Global Brand
Slogan, as well as the strategies and initiatives taken by each Committee.

The Great Possibilities that Lie Beyond

the Boundaries of a Mobility Company

Honda already has a widely recognized global brand slogan, “The Power of Dreams.” To clearly illustrate
Honda’s vision in line with the changing times and to demonstrate how the company will progress,
complementary phase and keywords have been incorporated into this slogan. To firmly establish these
new elements as “Honda’s Vision” the first step is to repeatedly and thoroughly explain to those within
Honda to deepen their understanding and permeation. Subsequently, it is crucial to consistently
communicate this message to the external world, ensuring a continuous flow of information.

Qualities Required for the Leaders in the Future

In Nominating Committee discussions, we have spent time to discuss in-depth the qualities required for
Honda’s leaders. As the results, we concluded that sincerity and honesty, in other words, “integrity” are
indispensable attributes for someone in a top leadership position. Building on that foundation, the ability to
“craft a compelling vision,” “make proactive decisions” and “lead a group and take the initiative” are the three
particularly essential elements we identified.
Especially during this period of significant transformation, not only “craft a compelling vision” but also
“make proactive decisions” becomes extremely important. This time, the fact that CEO Toshihiro Mibe decided
to shift toward electrification business strategy without being bound by past successes and clearly presented
Honda’s Vision is perceived as a manifestation of such qualities. Going forward, I would like to continue
discerning the qualities of the ideal leader from an independent standpoint.

Multiplying Assets to Deliver Added Value to Society Beyond Expectations

The excitement surrounding the question “What will Honda come up with next?” encapsulates, I
believe, the image the wider society has of Honda. It is also the facet of Honda I most eagerly look
forward to. To respond to this sense of excitement, it is essential for the company to have
comprehensive strengths that are not limited to any one segment. Honda has continuously expanded
its business beyond just motorcycles and automobiles, venturing into new segments such as power
■ Nominating Committee ■ Compensation Committee ■ Audit Committee products and aviation. I feel that by combining Honda’s abundant assets, we will be able to bring
Chairperson Chairperson Chairperson
Outside Director Outside Director Outside Director
Honda’s unique value to completely new areas.
We are in an era where tomorrow is not merely an extension of yesterday. What is required now is
Fumiya Kokubu Kazuhiro Higashi Yoichiro Ogawa
the power of ideas and the intellectual power of the organization. I hope that the organization will
absorb the power generated by the combination of each individual’s abilities and meet the
expectation hidden in the question “What will Honda come up with next?”

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Governance | Messages from Outside Directors

Toward a Company that Leads Change with

A New Evolutionary Challenge
Unique and Intriguing Ideas and Rapid
that Goes beyond Honda’s Past
Management Decisions

Honda’s company name does not contain the word “automobile.” This reflects the world’s expectation that I believe that no other phrase embodies Honda’s values more than “The Power of Dreams,” which combines the
the company will create an interesting future that is not confined to the automobile. When I attend “power” of the engine, Honda’s founding business, and the “dreams” that have been realized so far, from mopeds to
General Shareholder Meetings, I see many investors who like Honda as a company and expect it to do Super Cubs, automobiles, emission control vehicles in the United States and jet aircraft. I thought reconstructing these
something interesting. It is important to remain a company people and society want to exist, cherishing two words that signify Honda’s driving force and adopting them as shared values globally was an excellent approach.
such a shared understanding in society. With a global business scale and long-term vision required, I Of the keywords “Create,” “Transcend” and “Augment,” “Transcend” not only means freeing people from the
believe that Honda aims to lead by creating change, not just catching up with it, based on a bold concept constraints of time and space but can also be seen as transcending Honda itself.
from a global perspective. Speed is also an important factor in leading change. We believe that the Amidst these significant changes, rather than resting on past successes or maintaining the status quo, I believe
adaptation of the company with nominating and other committees will not only ensure transparency and Honda’s aspiration is to continue being a company people and society want to exist beyond its past achievements.
objectivity in management but will also accelerate the speed of management decision-making and
encourage change through the appropriate delegation of authority to Executive Officers. Accelerating the Pace of Transformation with the Ability to Read
Changes and Make Appropriate Investment Decisions
Challenge of Staying at the Forefront in the Era of Rapid Evolution While maintaining the unwavering trust that society places in Honda’s exceptional quality, it is imperative that Honda
The slogan “The Power of Dreams” has become so intertwined with Honda that the mere mention of the enhances its ability to recognize the rapid transformations occurring in the global manufacturing and digital industries,
word “dream” evokes the company. Redefining this slogan was thus undoubtedly a momentous decision. In as well as the geopolitical risks that surround them, in the medium to long term. This involves making appropriate
an era of once-in-a-century transformation, I believe recognizing where Honda should be headed has been investment decisions regarding the industry sector, partners, scale and timing in collaborations. Over the past year,
perceived as an essential process for Honda at present. Honda has actively engaged in building partnerships and collaborations with other companies, emphasizing its unique
Today, the competition in EVs and automated driving is intensifying, but it is possible that in 5 or 10 strengths and a sense of urgency. This represents a significant change for Honda, which has traditionally adhered to a
years these technologies will be taken for granted. Honda must move ahead of this extremely rapid doctrine of self-reliance in technology. We are confident that this change will lead to our next quantum leap in growth.
progress. Should we do so while being overwhelmed by reality, or should we take the lead in challenging to
create an exciting future? Honda is the latter, and I believe that is also Honda’s social responsibility. The Evolution of Governance Leveraging the On-Site and In-Person Insights
redefined global brand slogan should serve as a guidepost for challenges that envision such a future. The Audit Committee plays a part in the supervisory function fulfilled by the Board of Directors and contributes to the
establishment of a high-quality corporate governance system by supervising and auditing the duties executed by directors
Establishing a Compensation System that Maximizes Honda’s Uniqueness and Executive Officers. In conducting audit activities from an independent standpoint, the Committee confirms how the
The Compensation Committee is working on implementing a compensation system that incentivizes executives and management carry out day-to-day operations, sometimes taking the opportunity to visit company sites.
future-oriented, enthusiastic human resources and management based on a long-term perspective. In FY2023, we were given many opportunities for site visits, and I strongly sensed that the executive team was acutely
This is the third year since we adopted the company with nominating and other committees. In the conscious of the importance of ensuring that Outside Directors possess a thorough understanding of both cutting-edge
first year, we started to build the base of the system, and in the second year, we thoroughly discussed research and the challenges we face. I believe that the time spent on site visits and the communication we engaged in were
long-term incentives. Now, the design of the system is finally taking shape. We will establish a extremely valuable to the Audit Committee as we were able to understand certain things only by actually going to a site,
compensation system that will enhance Honda’s corporate value while incorporating sustainability seeing the products, deepening our technical understanding and communicating with associates rather than discussing
elements such as carbon neutrality and diversity. This will become the mechanism that brings out issues without them at the headquarters. Moving forward, while striving to grasp the on-site situation, we will ensure the
Honda’s uniqueness to its fullest. implementation of external environment analysis and risk management, thereby contributing to the establishment of a
high-quality corporate governance structure.
Honda Report 2023 69
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Major Indicators

Non-Financial Information Financial Information

Total GHG Emissions Social Sales Revenue
(million t-CO2e) (¥ billion)
FY2019 FY2020 FY2021 FY2022 FY2023 20,000
315.29
303.12 16,907.7
300 280.02 288.23 Consolidated number
Scope 3*1 219,722 218,674 211,374 204,035 197,039 15,888.6
of associates 16,000 14,931.0 14,552.6
254.48 other
categories Percentage of female in 13,170.5
13.9% 13.8% 14.0% 15.1% 15.9%
the Honda workplace
200 12,000

Scope 3*2 8,000

category 11
100
Governance 4,000
Scope 2
Scope 1 FY2019 FY2020 FY2021 FY2022 FY2023
0 0
2019 2020 2021 2022 2023 （FY） 2019 2020 2021 2022 2023 (FY)
Number of Directors 13 13 11 11 11
*1 The sum of emissions from categories 1, 2, 3, 4, 5, 6, 7, 9, 10, 12 and 15. As per
the GHG Protocol, Honda excludes categories 8, 13 and 14 from its calculations, Percentage of Outside Operating Profit/Operating Margin
38.5% 38.5% 45.5% 45.5% 45.5%
as these categories are either not part of Honda corporate activities or Directors
■■ Operating profit (left) ■■ Operating margin (right)
emissions from these categories are accounted for in other categories.
*2 The cumulative amount of GHGs that will have been emitted by products (¥ billion) （%）
sold by Honda in the applicable fiscal year (automobiles, motorcycles, 1,000 12
power products and aircraft) as a result of their use by customers from the 871.2
time they received those products until they dispose of them in the future. 780.7
Calculations cover the emission of all motorcycles, automobiles, power 800 726.3 9
products and aircraft sold worldwide under the Honda brand name. 660.2
633.6
These emissions are calculated using the following formula for each model 600
and adding the results: CO2 emissions intensity x Annual distance traveled 6
or Annual usage in hours x Product lifetime in years x Annual unit sales.
· CO2 emissions intensity: Average annual mileage of each model set at 400 6.0
4.6
same value per region or Annual consumption of each model and Average 4.6 5.0
4.2 3
annual used time distinguish general business from business use 200
· Annual mileage / Lifetime years of use: Referring to IEA estimation model,
“MoMo,” etc. 0
0
· CO2 emission factor: Referring to the GHG calculation guidelines that 2019 2020 2021 2022 2023 (FY)
public authorities in each region issued. If there are no appropriate
guidelines, reference from the ones of Japanese.
R&D Expenditures

Amount of Water Intake/Waste Generated

(¥ billion)
1,000
FY2019 FY2020 FY2021 FY2022 FY2023 820.0 821.4 852.0
780.0 804.0
800
Amount of water intake
36,200 34,100 29,300 32,500 33,200
(1,000 m3 )
Waste generated 600
1,690 1,550 1,360 1,410 1,420
(1,000 t)
400
Calculation method:
Amount of water intake = Σ (Purchased from the water facilities +
Groundwater intake + Rainwater utilization amount + Surface such as rivers 200
water intake)
Waste generated = Σ (Industrial waste + general administrative waste +
0
valuable resources emission) 2019 2020 2021 2022 2023 (FY)
· However, regions outside of Japan are beyond the scope of data for industrial
waste (excluding harmful waste defined in accordance with regulations in
respective countries) and general administrative waste.
· Expressed in three significant digits Honda Report 2023 70
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

10-Year Summary Years ended March 31

U.S. GAAP: Yen (millions) IFRS: Yen (millions)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Sales, profits and dividends Sales, profits and dividends
Net sales and other operating revenue ¥9,877,947 Sales revenue ¥12,506,091 ¥13,328,099 ¥14,601,151 ¥13,999,200 ¥15,361,146 ¥15,888,617 ¥14,931,009 ¥13,170,519 ¥14,552,696 ¥16,907,725
Operating income 544,810 Operating profit 823,864 670,603 503,376 840,711 833,558 726,370 633,637 660,208 871,232 780,769
Operating margin 5.5% Operating margin 6.6% 5.0% 3.4% 6.0% 5.4% 4.6% 4.2% 5.0% 6.0% 4.6%
Income before income taxes and equity in income of affiliates 488,891 Share of profit of investments accounted for using the equity method 130,916 96,097 126,001 164,793 247,643 228,827 164,203 272,734 202,512 117,445
Income taxes 178,976 Profit before income taxes 933,903 806,237 635,450 1,006,986 1,114,973 979,375 789,918 914,053 1,070,190 879,565
Equity in income of affiliates 82,723 Income tax expense 267,992 245,139 229,092 327,592 (13,666) 303,089 279,986 218,609 309,489 162,256
Net income attributable to non-controlling interests (25,489) Profit for the year 665,911 561,098 406,358 679,394 1,128,639 676,286 509,932 695,444 760,701 717,309
Net income attributable to Honda Motor Co., Ltd. 367,149 Profit for the year attributable to owners of the parent 624,703 509,435 344,531 616,569 1,059,337 610,316 455,746 657,425 707,067 651,416
Cash dividends paid during the period 129,765 Cash dividends paid during the period 142,381 158,601 158,601 162,205 174,221 194,271 196,795 145,090 188,402 213,475
Research and development expenses 560,270 Research and development expenses 625,698 670,331 719,810 659,918 730,734 820,037 821,478 780,065 804,025 852,067
Interest expense 12,157 Interest expense 12,803 18,194 18,146 12,471 12,970 13,217 24,689 13,877 16,867 36,112
Assets, long-term debt and shareholders’ equity Assets, liabilities and equity
Total assets ¥13,635,357 Total assets ¥16,048,438 ¥18,425,837 ¥18,229,294 ¥18,958,123 ¥19,349,164 ¥20,419,122 ¥20,461,465 ¥21,921,030 ¥23,973,153 ¥24,670,067
Long-term debt 2,710,845 Financing liabilities (Non-current liabilities) 3,224,512 3,926,276 3,736,628 4,022,190 3,881,749 4,142,338 4,221,229 4,715,361 4,984,252 4,373,973
Total Honda Motor Co., Ltd. shareholders’ equity 5,043,500 Equity attributable to owners of the parent 6,335,534 7,108,627 6,761,433 7,295,296 7,933,538 8,267,720 8,012,259 9,082,306 10,472,824 11,184,250
Capital expenditures (excluding purchase of operating lease assets) 630,408 Additions to property, plant and equipment 803,231 703,920 687,306 588,360 484,778 466,657 455,169 390,081 366,829 578,063
Depreciation (excluding property on operating leases) 335,536 Depreciation 419,022 451,052 486,410 484,133 513,455 499,036 470,320 428,063 438,269 512,501
Net cash provided by operating activities 800,744 Net cash provided by operating activities 449,108 1,020,404 1,390,995 885,073 987,671 775,988 979,415 1,072,379 1,679,622 2,129,022
Net cash used in investing activities (1,069,756) Net cash used in investing activities (921,023) (840,496) (875,077) (650,618) (615,113) (577,555) (619,481) (796,881) (376,056) (678,060)
Net cash used in financing activities 119,567 Net cash used in financing activities 355,458 12,488 (95,299) 115,423 (174,334) 22,924 (87,411) (283,980) (615,718) (1,468,359)
U.S. GAAP: Yen IFRS: Yen
Per common share Per common share
Total Honda Motor Co., Ltd. shareholders’ equity Profit for the year attributable to owners of the parent
Basic ¥203.71 Basic ¥346.62 ¥282.66 ¥191.16 ¥342.10 ¥590.79 ¥345.99 ¥260.13 ¥380.75 ¥411.09 ¥384.02
Diluted 203.71 Diluted 346.62 282.66 191.16 342.10 590.79 345.99 260.13 380.75 411.09 384.02
Dividends 76 Dividends 82 88 88 92 100 111 112 110 120 120
Shareholders’ equity attributable to shareholders of the Company 2,798.37 Shareholders’ equity attributable to owners of the parent 3,515.27 3,944.23 3,751.59 4,047.81 4,461.36 4,698.74 4,640.46 5,260.06 6,122.31 6,719.93

Yen (millions) Yen (millions)

Sales Sales
Sales amounts * Sales revenue*
¥1,652,995 ¥1,920,114 ¥1,800,439 ¥1,754,167 ¥1,799,772 ¥1,919,130 ¥2,042,891 ¥1,985,945 ¥1,849,268 ¥1,943,649 ¥2,013,095
Japan Japan
17% 15% 14% 12% 13% 12% 13% 13% 14% 13% 12%
8,224,952 10,585,977 11,527,660 12,846,984 12,199,428 13,442,016 13,845,726 12,945,064 11,321,251 12,609,047 14,894,630
Overseas Overseas
83% 85% 86% 88% 87% 88% 87% 87% 86% 87% 88%
¥9,877,947 ¥12,506,091 ¥13,328,099 ¥14,601,151 ¥13,999,200 ¥15,361,146 ¥15,888,617 ¥14,931,009 ¥13,170,519 ¥14,552,696 ¥16,907,725
Total Total
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Thousands Thousands
Unit sales Unit sales
Motorcycle Business 15,494 Motorcycle Business 17,008 17,592 17,055 17,661 19,554 20,238 19,340 15,132 17,027 18,757
Automobile Business 4,014 Automobile Business 4,340 4,367 4,743 5,028 5,199 5,323 4,790 4,546 4,074 3,687
Power Products Business 6,071 Power Products Business 6,018 5,983 5,965 6,121 6,262 6,301 5,701 5,623 6,200 5,645
Number of associates (Unit: persons) 190,338 Number of associates (Unit: persons) 199,368 204,730 208,399 211,915 215,638 219,722 218,674 211,374 204,035 197,039
Exchange rate (yen amounts per U.S. dollar) Exchange rate (yen amounts per U.S. dollar)
Rates for the period-end ¥94 Rates for the period-end ¥103 ¥120 ¥113 ¥112 ¥106 ¥111 ¥109 ¥111 ¥122 ¥134
Average rates for the period 83 Average rates for the period 100 110 120 108 111 111 109 106 112 136

* The geographic breakdown of sales amounts is based on the location of customers. Honda Report 2023 71
 Value Creation Story Business Strategy 5 Key Themes Governance Related Data

Company Overview

Company Overview (As of March 31, 2023) Production Structure

Company name Honda Motor Co., Ltd. Number of Associates The Corporate Strategy Division plays the lead role in planning and formulating the overall composition of
Head office 2-1-1 Minami-Aoyama, Consolidated 197,039 /Non-consolidated 33,065 the Integrated Report. With the cooperation of each division, we published the Integrated Report after
Minato-ku, Tokyo Consolidated Subsidiaries 313 companies holding repeated discussions regarding the value creation diagrams, concepts, composition, content and
Established September 1948 Affiliates Accounted for under the Equity Method designs and obtaining the approval of management.
Capital 86 billion yen 69 companies This report has been structured to communicate to all stakeholders in and outside Honda its initiatives
for further improving its corporate value and how it will continue bringing joy to society.

Stock Information Breakdown of Shareholders by Type ■ Editorial Committee

Stock Exchange Listings
(As of March 31, 2023) Chairperson Manabu Ozawa, Managing Executive Officer and Chief Officer, Corporate Strategy Operations
Domestic: Tokyo Stock Exchange Number of Shares Authorized 7,086,000,000
Overseas: New York Stock Exchange Total Number of Shares Issued 1,811,428,430 Head of Secretariat:
Securities Code Number 7267 Sumihiro Takahashi, General Manager, Corporate Strategy Division
■ Individuals/others  8.6%
Number of Shares per Trading Unit 100
■ Financial institutions  34.7%
Transfer Agent for Common Stock ■ Securities companies  3.2% Production Secretariat:
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo ■ Other domestic corporations 6.6% Atsushi Tsukigata, Manager, Corporate Strategy Division
■ Foreign investors 38.8%
Mitsubishi UFJ Trust and Banking Corporation Junpei Katsuta
■ Treasury stock  8.1%
Riku Wada
Rumie Oishi
Major Shareholders (As of March 31, 2023) Ayaka Omomo
Shinichi Kishimoto
Number of Shares Held Percentage against Total
Individual or Organization
(thousands) Shares Issued (%)

The Master Trust Bank of Japan, Ltd. (Trust Account) 260,025 15.6 Environment Planning Division, Corporate Planning Unit
Moxley & Co. LLC 116,835 7.0 Shunsuke Morioka

Custody Bank of Japan, Ltd. (Trust Account) 103,468 6.2

Meiji Yasuda Life Insurance Company 49,492 3.0

SSBTC CLIENT OMNIBUS ACCOUNT 43,631 2.6

Tokio Marine & Nichido Fire Insurance Co., Ltd. 31,915 1.9

STATE STREET BANK WEST CLIENT – TREATY 505234 29,327 1.8

Nippon Life Insurance Company 28,666 1.7 Corporate site Five key factors
Northern Trust CO. (AVFC) Re Silchester International Investors https://global.honda/en/ https://global.honda/en/stories/068/
26,328 1.6
International Value Equity Trust
JPMorgan Chase Bank 385781 22,752 1.4

Notes: Sustainability site Honda Stories

1 The number of shares described above rounds off figures of less than 1,000 shares. https://global.honda/en/sustainability/ https://global.honda/en/stories/
2 Ownership percentages are calculated using the total number of shares issued minus treasury stock (146,163 thousand shares)
3 Moxley & Co. LLC is an official holder of stock of JPMorgan Chase Bank, which is a depositary institution for American
Depositary Receipts (ADRs).

Honda Report 2023 72

The power of dreams, how we move you.