HMC Honda Motor Co Ltd

No.1-7628

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

FOR THE MONTH OF MAY 2022

COMMISSION FILE NUMBER: 1-07628

HONDA GIKEN KOGYO KABUSHIKI KAISHA

(Name of registrant)

HONDA MOTOR CO., LTD.

(Translation of registrant’s name into English)

1-1, Minami-Aoyama 2-chome, Minato-ku, Tokyo 107-8556, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒    Form 40-F  ☐            

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Contents

Exhibit 1:

Notice of Convocation of the 98th Ordinary General Meeting of Shareholders of the Company has been uploaded to the Company’s website shown below.

https://global.honda/investors/stock_bond/meeting.html

Exhibit 2:

The English translation of Report of Independent Directors of the Company.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 31, 2022

Securities Code Number: 7267

NOTICE OF CONVOCATION OF

THE 98TH ORDINARY GENERAL MEETING OF SHAREHOLDERS

TO BE HELD AT GRAND NIKKO TOKYO DAIBA, TOKYO, JAPAN

ON JUNE 22, 2022 AT 10:00 A.M.

(This is an abridged translation of the original notice

in the Japanese language mailed on June 3, 2022

to shareholders in Japan, and is for reference purposes only.

In the event of any discrepancy between the translated document and the Japanese original,

the original shall prevail.

The Company assumes no responsibility for this translation

or for direct, indirect or any other forms of damage arising from the translations.)

HONDA MOTOR CO., LTD.

(HONDA GIKEN KOGYO KABUSHIKI KAISHA)

TOKYO, JAPAN

[Abridged Translation]

June 3, 2022

To Shareholders:

Notice of Convocation of the 98th

Ordinary General Meeting of Shareholders

Dear Shareholders:

You are hereby notified that the 98th Ordinary General Meeting of Shareholders will be held as stated below.

We have decided to hold this meeting after taking appropriate measures to prevent the spread of COVID-19.

For your health and safety, you are requested to exercise your voting rights via the Internet or by mail in advance if possible and to refrain from coming to the venue.

If you exercise your voting rights via the Internet or by mail, please review the reference materials for the general meeting of shareholders mentioned below, and exercise your voting rights no later than 6:00 p.m. on Tuesday, June 21, 2022.

This general meeting of shareholders will be streamed live via the Internet, from the opening to the closing of the meeting.

Particulars

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Notes:

https://evote.tr.mufg.jp/

Request: We request that when arriving at the meeting you present the voting right exercise form enclosed herewith to the meeting hall receptionist.

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REFERENCE MATERIALS FOR THE GENERAL MEETING OF SHAREHOLDERS

The term of office of each of the eleven (11) current Directors is due to expire at the close of this general meeting of shareholders.

It is proposed that the following eleven (11) Directors, including five (5) Outside Directors, be elected at this meeting.

The names and particulars of the candidates for the position of Directors are provided below.

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Name

Skills

Committee to be appointed

Corporate management

Internationality

Industrial experience

New business strategies

HR

Accounting & finance

Legal & risk management

ESG & sustainability

Nominating

Audit

Compensation

Seiji Kuraishi

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Toshihiro Mibe

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Kohei Takeuchi

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Shinji Aoyama

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Asako Suzuki

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Masafumi Suzuki

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Kunihiko Sakai

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Fumiya Kokubu

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Yoichiro Ogawa

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Kazuhiro Higashi

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Ryoko Nagata

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: Chairperson of the      Committee

Please refer to the next page for the reasoning behind the selection of the skills.

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The Company has identified the following skills required for the Board of Directors to fulfill its role of making decisions with respect to the basic management policies of the Company Group and other equivalent matters and overseeing the performance by the Directors and Executive Officers of their duties, with the aim of achieving the “2030 Vision.”

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  Reasons for nomination as a candidate for position of Director

Mr. Seiji Kuraishi has broad experience primarily in the areas of supply chain management and sales and marketing, as well as abundant international experience, and is familiar with the Company Group’s business including overseas operations.

In the fiscal year ended March 31, 2022, he has properly fulfilled his duties as Director, Executive Vice President and Representative Executive Officer, and Chief Operating Officer by demonstrating strong leadership and being responsible for business execution of the entire Company Group, as well as overseeing business execution.

He has been nominated as a candidate for Director again, given that he is particularly an exceptional person with both superior character and insight and is well qualified for assuming a role in overseeing the entire business management of the Company from an objective, highly sophisticated and broader viewpoint.

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  Reasons for nomination as a candidate for position of Director

Mr. Toshihiro Mibe has broad experience primarily in the areas of R&D and production, and is familiar with the Company Group’s business including overseas operations.

In the fiscal year ended March 31, 2022, he has properly fulfilled his duties as Director, President and Representative Executive Officer, and Chief Executive Officer of the Company by demonstrating strong leadership and being responsible for the management of the entire Company Group, as well as overseeing business execution.

He has been nominated as a candidate for Director again, given that he is particularly an exceptional person with both superior character and insight and is well qualified for assuming a role in overseeing the entire business management of the Company in order to achieve the realization of 2030 Vision, 2050 carbon neutrality, and zero traffic collision fatalities.

After his appointment, he will serve as a Member of the Nominating Committee.

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  Reasons for nomination as a candidate for position of Director

Mr. Kohei Takeuchi has broad experience primarily in the area of accounting and finance, as well as abundant international experience, and is familiar with the Company Group’s business including overseas operations.

In the fiscal year ended March 31, 2022, he has properly fulfilled his duties as Chief Financial Officer by demonstrating high degree of expertise and strong leadership, and being responsible for business execution of the entire Company Group, as well as overseeing business execution.

He has been nominated as a candidate for Director again, given that he is particularly an exceptional person with both superior character and insight and is well qualified for assuming a role in overseeing the entire business management of the Company in order to achieve the realization of 2030 Vision, 2050 carbon neutrality, and zero traffic collision fatalities.

After his appointment, he will serve as a Member of the Compensation Committee.

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		Current position		Director		Responsibilities		Member of the Audit Committee (Full-time)
		●  Number of shares of the Company held 20,600 shares				●  Attendance record of the Board of Directors, etc. (number of meetings attended/number of meetings held)
		●  Special interest between the candidate and the Company      None				Board of Directors                                    8/8 (100%)               Audit Committee                                      6/6 (100%)
		●  Term of office as Director (as of the close of this Meeting) 1 year

  Reasons for nomination as a candidate for position of Director

Ms. Asako Suzuki has broad experience primarily in the area of sales and marketing, accounting and finance, human resources and corporate governance, as well as abundant international experience, and is familiar with the Company Group’s business including overseas operations.

In the fiscal year ended March 31, 2022, she has properly fulfilled her duties as Director and a Member of the Audit Committee by auditing and overseeing the execution of duties by Directors and Executive Officers.

She has been nominated as a candidate for Director again, given that she is an exceptional person with both superior character and insight and is well qualified for assuming a role in overseeing the entire business management of the Company from an objective, highly sophisticated and broader viewpoint.

After her appointment, she will serve as a Member of the Audit Committee.

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7		Kunihiko Sakai		Date of birth March 4, 1954		Reappointment Outside Independent Director

 

		Current position		Director		Responsibilities		Member of the Nominating Committee Member of the Audit Committee
		●  Number of shares of the Company held    1,200 shares				●  Attendance record of the Board of Directors, etc. (number of meetings attended/number of meetings held)
		●  Special interest between the candidate and the Company    None				Board of Directors                                 10/10 (100%)             Nominating Committee                             7/7 (100%)             Audit Committee                                       6/6 (100%)
		●  Term of office as Outside Director (as of the close of this Meeting)    3 years				Note:  Mr. Kunihiko Sakai attended all of the four (4) meetings of the Audit and Supervisory Committee held during April to June 2021.

Mr. Kunihiko Sakai has high expertise and abundant experience as a legal affairs specialist having served as Public Prosecutor and a lawyer, including posts of Superintending Prosecutor at High Public Prosecutors’ Offices from July 2014 to March 2017.

He has properly fulfilled his duties as Outside Director 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 overseeing the entire business management of the Company from an independent standpoint.

He has no experience in corporate management except serving as Outside Director or Outside Corporate Auditor. However, he has been nominated as a candidate for Outside Director again, given that he is an exceptional person with both superior character and insight, in order for him to continue to assume a role in overseeing the entire business management of the Company from an objective, highly sophisticated and broader viewpoint.

After his appointment, he is expected to contribute to strengthening the supervisory function of the Company’s management. He is also expected to fulfill a role in strengthening the transparency and objectivity of the process of selecting candidates for Directors, as well as strengthening the audit function, as a Member of the Nominating Committee and the Audit Committee.

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  1. Reasons for nomination as a candidate for position of Outside Director

Mr. Fumiya Kokubu held positions of President and CEO, and Chairman of the Board of Marubeni Corporation from 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 the Nominating Committee and a Member of the Compensation Committee since June 2021 by overseeing the entire business management of the Company from an independent standpoint.

He has been nominated as a candidate for Outside Director again, given that he is an exceptional person with both superior character and insight, in order for him to continue to assume a role in overseeing the entire business management of the Company from an objective, highly sophisticated and broader viewpoint.

  2. Roles expected to fulfill after appointment

After his appointment, he is expected to contribute to strengthening the supervisory function of the Company’s management. He is also expected to fulfill a role in strengthening the transparency and objectivity of the process of selecting candidates for Directors and the process of determining the compensation of Directors and Executive Officers, as the Chairperson of the Nominating Committee and a Member of the Compensation Committee.

  3. Other matters related to the Outside Director candidate

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10		Kazuhiro Higashi		Date of birth April 25, 1957		Reappointment Outside Independent Director

 

		Current position		Director		Responsibilities		Member of the Nominating Committee Member of the Compensation Committee (Chairperson)
		●  Number of shares of the Company held    200 shares				●  Attendance record of the Board of Directors, etc. (number of meetings attended/number of meetings held)
		●  Special interest between the candidate and the Company    None				Board of Directors                                     8/8 (100%)             Nominating Committee                             7/7 (100%)             Compensation Committee                         5/5 (100%)
		●  Term of office as Outside Director (as of the close of this Meeting)    1 year

Mr. Kazuhiro Higashi held positions of President and Chairman of Resona Holdings, Inc. from April 2013, and has abundant experience and deep insight regarding corporate management.

He has properly fulfilled his duties as Outside Director, the Chairperson of the Compensation Committee and a Member of the Nominating Committee since June 2021 by overseeing the entire business management of the Company from an independent standpoint.

He has been nominated as a candidate for Outside Director again, given that he is an exceptional person with both superior character and insight, in order for him to continue to assume a role in overseeing the entire business management of the Company from an objective, highly sophisticated and broader viewpoint.

After his appointment, he is expected to contribute to strengthening the supervisory function of the Company’s management. He is also expected to fulfill a role in strengthening the transparency and objectivity of the process of determining the compensation of Directors and Executive Officers and the process of selecting candidates for Directors, as the Chairperson of the Compensation Committee and a Member of the Nominating Committee.

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		Current position		Director		Responsibilities		Member of the Audit Committee
		●  Number of shares of the Company held    200 shares				●  Attendance record of the Board of Directors, etc. (number of meetings attended/number of meetings held)
		●  Special interest between the candidate and the Company    None				Board of Directors                                         8/8 (100%)               Audit Committee                                           6/6 (100%)
		●  Term of office as Outside Director (as of the close of this Meeting)    1 year

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The Company’s board of directors will determine that an outside director is sufficiently independent from the Company if it determines that the said outside director satisfies the independence criteria stipulated by the Tokyo Stock Exchange and the requirements set forth below:

[End]

Established on May 15, 2015

Partly amended on June 15, 2017

Partly amended on February 9, 2021

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Corporate Governance Initiatives (reference)

The Company strives to enhance corporate governance as one of the most important tasks for its management, based on the Company’s basic principle, in order to further strengthen the trust of our shareholders/investors and other stakeholders; encourage timely, decisive and risk-considered decision-making; seek sustainable growth and the enhancement of corporate value over the medium- to long-term; and become “a company that society wants to exist.”

In order to clearly segregate the supervisory function and execution function of management and to strengthen the supervisory function and to enable prompt and flexible decisions, the Company has “Nominating Committee,” “Audit Committee,” and “Compensation Committee,” each of which is composed of more than one half of Outside Directors, and has adopted a company with three committees structure which allows broad delegation of the business execution authority from Board of Directors to the Executive Officers.

We are making efforts to appropriately disclose corporate information including the release and disclosure of quarterly financial results and management policies in a timely and accurate manner to bolster trust and appreciation from shareholders/investors and other stakeholders. Going forward, we will continue to strive to ensure the transparency of our management.

For the Company’s basic approach to corporate governance, please refer to “Honda Corporate Governance Basic Policies” (the URL below).

“Honda Corporate Governance Basic Policies”

https://global.honda/investors/policy/governance.html

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Orientation for nominees

  The Company provides Outside Director nominees with training on industrial trends, the company’s history, businesses, finances, organizations, internal control system, etc.

Preliminary briefings and information sessions

  The Company holds a preliminary briefing before each Board meeting in order to provide Outside Directors with sufficient insights into the details and background of the agenda items to be escalated to the Board, their positions in medium-to-long-term management plan, and other basic prerequisites to ensure substantial discussions at Board meetings. In addition, we set up opportunities to share important information about our medium-term management plan and hold discussions among Directors.

Discussion on management-related interests

  The Company held discussions on Directors’ interests to achieve alignment among the Outside Directors with respect to the Company Group’s long-term challenges and future direction and to help them better understand our management-related initiatives. We also aimed at incorporating their insights into discussions of our future management policies.

Dialogue with Executive Officers/among Outside Directors

  The Company provides opportunities for dialogue between Outside Directors and Executive Officers/Internal Directors as well as among Outside Directors as needed in order to enhance communication among Directors.

Site visits

  The Company held visits to our factories and other business locations to help Directors better understand our businesses.

				Visit to Yorii Plant

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  Each fiscal year, the Company conducts an evaluation of the overall effectiveness of the Board of Directors in order to confirm the current status of the Board’s functions, with the aim of further improving its effectiveness and promoting understanding among shareholders and stakeholders.

Evaluation process

Evaluation results

Summary of evaluation results

  The evaluation confirmed that the effectiveness of the Board of Directors has been adequately ensured. This has been achieved by a number of changes made after the management approach was updated in response to the transition to a company with three committees. The evaluation confirmed improvements to the discussion of management policies from a medium- to long-term perspective and the provision of information relevant to these, and an improvement in the quality of deliberations and appropriate operation of the three committees.

  The evaluation cited a need to provide more timely information to Outside Directors, to enhance opportunities for business site visits, and to enable more active discussions at Board of Directors meetings. We will address these issues to further enhance effectiveness as monitoring-type Board of Directors.

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Business Report for the 98th Fiscal Year

For the Period From: April 1, 2021 To: March 31, 2022

  Despite shifting to a recovery trend, the economic environment surrounding Honda, its consolidated subsidiaries and its affiliates accounted for under the equity method (hereinafter, the “Honda Group”) in the fiscal year ended March 31, 2022, continued to be difficult due to the spread of COVID-19, the impact of semiconductor supply shortages, and sharp increases in raw material prices, among other factors. In the United States, the economy picked up due to factors such as economic stimulus measures and improved consumer spending. In Europe and Asia, while there were signs of economic recovery, conditions were difficult, with some countries curtailing economic activities. In Japan, although the economy continued to pick up, there were signs of weakness in some areas, such as employment. During the fourth quarter of the fiscal year ended March 31, 2022, the global economy slowed down due to the worsening situation in Ukraine. A further downturn in the economy is expected in the near term.

  In the Honda Group’s principal markets, the motorcycle market recovered substantially in Indonesia and Brazil, and moderately in Thailand compared to the previous fiscal year, but shrank in India and Vietnam. Compared to the previous fiscal year, the automobile market recovered substantially in Indonesia, and moderately in India, but shrank in Japan, China, Europe, Thailand, Brazil, and the United States.

  In these circumstances, the Honda Group worked to strengthen its business structure in order to respond swiftly and accurately to the changing and varied needs of customers and society. We also continued to pursue our goals of achieving carbon neutrality and zero fatalities in traffic accidents. On the research and development front, we made proactive efforts to develop safety and environmental technologies and advanced technologies to enhance the attractiveness of our products and transform mobility, utilizing open innovation with external partners. With regard to production, we strengthened our production structure and further pressed ahead with optimizing the production allocation and production capability to deal with changes in demand on a global basis. As for sales, we worked to enhance our product lineup through measures such as aggressively launching products that offer new value and delivering products globally.

  Honda’s consolidated sales revenue for the fiscal year ended March 31, 2022 increased by 10.5% from the fiscal year ended March 31, 2021 to JPY 14,552.6 billion, due mainly to increased sales revenue in the motorcycle business and financial services business operations as well as positive foreign currency translation effects.

  Operating profit increased by 32.0%, to JPY 871.2 billion from the previous fiscal year, due mainly to an increase in profit attributable to sales impacts as well as positive foreign currency effects, which was partially offset by a decrease in profit attributable to sales price and cost impacts. Profit before income taxes increased by 17.1%, to JPY 1,070.1 billion from the previous fiscal year. Profit for the year attributable to owners of the parent increased by 7.6%, to JPY 707.0 billion from the previous fiscal year.

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  With respect to Honda’s sales for the fiscal year by business segment, in motorcycle business operations, sales revenue from external customers increased by 22.3%, to JPY 2,185.2 billion from the previous fiscal year, due mainly to increased consolidated unit sales. Operating profit totaled JPY 311.4 billion, an increase of 38.7% from the previous fiscal year, due primarily to an increase in profit attributable to sales impacts as well as positive foreign currency effects, which was partially offset by higher overhead costs.

In the automobile business operations, sales revenue from external customers increased by 6.8%, to JPY 9,147.4 billion from the previous fiscal year due mainly to positive foreign currency translation effects, which were partially offset by a decrease in consolidated unit sales. Operating profit totaled JPY 236.2 billion, an increase of 161.7% from the previous fiscal year, due primarily to lower overhead expenses and positive foreign currency effects, which were partially offset by a decrease in profit attributable to sales price and cost impacts.

Financial Services Business

Sales revenue from external customers in the financial services business operations increased by 13.1%, to JPY 2,820.6 billion from the previous fiscal year due mainly to an increase in revenues on disposition of lease vehicles. Operating profit decreased by 6.7% to JPY 333.0 billion from the previous fiscal year, mainly due to the difference of the allowance for credit loss.

Sales revenue from external customers in life creation and other businesses increased by 24.1%, to JPY 399.2 billion from the previous fiscal year, due mainly to an increase in consolidated unit sales in life creation and other businesses. Honda reported an operating loss of JPY 9.4 billion, an improvement of JPY 2.1 billion from the previous fiscal year, due mainly to an increase in profit from the impact of sales, despite increased overhead costs. Operating loss of aircraft and aircraft engines included in the life creation and other businesses segment was JPY 33.7 billion, a deterioration of JPY 1.4 billion from the previous fiscal year.

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Capital expenditures during the fiscal year ended March 31, 2022 totaled JPY 278,405 million. The breakdown of capital expenditures by business segment was as follows:

In addition to investments for new model introductions, Honda’s capital expenditure was predominantly utilized for expanding, rationalizing, and renovating manufacturing facilities as well as for expanding sales and R&D facilities.

Note: Intangible assets are not included in the table above.

Honda meets its working capital requirements primarily through cash generated by operations, bank loans and corporate bonds. The outstanding balance of liabilities for Honda’s manufacturing and sales businesses at the end of the fiscal year ended March 31, 2022 was JPY 836.8 billion.

In addition, the Company’s finance subsidiaries fund financial programs for customers and dealers primarily from medium-term notes, bank loans, securitization of finance receivables and equipment on operating leases, commercial paper and corporate bonds. The outstanding balance of liabilities for Honda’s financial services subsidiaries at the end of the fiscal year was JPY 7,269.9 billion.

The Honda Group has two Fundamental Beliefs: “Respect for the Individual,” and “The Three Joys” (the Joy of Buying, the Joy of Selling, and the Joy of Creating). “Respect for the Individual” calls on Honda to nurture and promote these characteristics in our company by respecting individual differences and trusting each other as equal partners. “The Three Joys” are based on “Respect for the Individual,” and is the philosophy of creating joy together with everyone involved in Honda’s activities, with the joy of its customers as the driving force.

Based on these Fundamental Beliefs, the Honda Group strives to improve its corporate value by sharing joy with all people, and with our shareholders in particular, by practicing its Mission Statement: “Maintaining a global viewpoint, we are dedicated to supplying products of the highest quality, yet at a reasonable price for worldwide customer satisfaction.”

The Honda Group has also defined its vision toward 2030 as “Serve people worldwide with the ‘joy of expanding their life’s potential,’” and will take initiatives in the following three directions.

1. Toward a clean and safe / secure society

2. Creating value for “mobility” and “daily lives”

3. Accommodate the different characteristics of people and society

The Honda Group is thoroughly committed to “eliminating the burden on the global environment” and “achieving safety that protects precious lives.” Specifically, in terms of the environment, the Honda Group aims to achieve carbon neutrality in 2050 across all of our products and business activities.

In terms of safety, the Honda Group will work toward the goal of zero traffic collision fatalities involving the Group’s motorcycles and automobiles globally by 2050.

Going forward, the Honda Group will actively promote the introduction of electric vehicles based on electric-powered motor technology which it has been developing as a leader in environmentalism. The Honda Group aims to create a recycling-oriented society with “zero environmental impact” so that people can live sustainably on the earth toward the realization of carbon neutrality. Therefore, the Honda Group will work on the three pillars of carbon neutrality, clean energy and resource circulation. The Honda Group has set targets in line with the “1.5 Celsius scenario” of the Paris Agreement, aiming for zero environmental impact throughout the life cycle of our products, including not only the products produced and sold by the Honda Group, but also its corporate activities, and is working toward its achievement.

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As part of its responsibility as a mobility company, the Honda Group is researching, developing, and working toward the adoption of safety technology based on its philosophy of “Safety for Everyone,” with the aim of realizing a “collision-free mobile society” where everyone who uses roads can live safely.

In addition to such safety technology, the Honda Group has long been promoting awareness of traffic safety in order to realize a society where all people who use roads, such as drivers and pedestrians, can move safely with safety awareness. Going forward, the Honda Group will carry out this initiative globally.

The Honda Group will focus on three areas, namely mobility, robotics and energy, in order to provide people with the joy and freedom of mobility and the joy of making their lives better.

Using the Honda Group’s unique strengths resulting from its wide range of mobility products including motorcycles and automobiles, the Honda Group will use partnerships with other companies in various regions to begin new mobility services that provide mobility without restraint in every aspect of life.

The Honda Group will work on creating a system that allows people to share and enjoy safe and secure clean energy in their daily lives through mobility.

The Honda Group will provide optimal products and services for diverse society, and to all people with a wide variety of cultures and values, whether they live in developed or emerging nations.

2) Management Challenges

The business environment surrounding the Honda Group has come to a major turning point. Values are diversifying, the population is aging, urbanization is accelerating, climate change is worsening, and the industrial structure is changing due to progress in technologies such as the use of electric-powered motors, autonomous driving and IoT, all on a global basis. In addition, values of the society and individuals as well as awareness of global environmental issues have changed dramatically due to the spread of COVID-19. It is vital to ensure “strong products, strong Mono-zukuri (the art of making things) and strong businesses” which are essential for future growth.

Looking at the market environment of motorcycle business operations, competition with not only existing manufacturers but also emerging manufacturers is intensifying. The operating environment continues to change more rapidly than ever as seen by the need to make efforts to deal with tighter environmental regulations in each country and expansion of new markets. The Honda Group has set a CO₂ reduction target rate that far exceeds the governmental targets for all emerging countries, and is aiming to become an environmental leader in motorcycles, not only through the use of electric-powered motors, but also through improved fuel efficiency and the use of biofuels.

With regard to electrification in automobile business operations, the Honda Group will work to achieve carbon neutrality in accordance with the characteristics of each region, including customer acceptance, infrastructure environment and the spread of renewable energy.

The power products and other businesses will provide new value for mobility and daily lives through the existing “provision of power products” and work toward the realization of carbon neutrality.

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3) Challenges to be Addressed Preferentially

Considering the business environment, the Honda Group will work on the following new challenges directed at the next generation to provide value unique to the Honda Group with a view to contributing to solving various social issues including climate change, while continuing to achieve sustainable growth.

a. Next-generation technologies

In the automobile industry in the future, the ability to respond to electrification, driver-assistive technologies, connected technologies and other technological innovations will likely determine the competitiveness of a company. The Honda Group will work to develop products and services equipped with such next-generation technologies in the motorcycle, automobile, and power products businesses, and ensure business feasibility including value chain as early as possible.

In the automobile business, going forward to the late 2020s, the Honda Group aims to introduce products tailored to the market characteristics of each region, such as the major markets of North America, China, and Japan. In North America, the Honda Group will start by introducing electric vehicles (EVs) that we are jointly developing with our partners. In China, the Honda Group will target the characteristics of the advanced EV market, where EV penetration is ahead of other regions, through local original development to respond quickly. In Japan, the Honda Group will introduce commercial light EVs as we work to promote EVs with an initial focus on vehicles for professional use.

The Honda Group will also keep a global perspective in developing the optimal electric business, since it is estimated that EVs will be in widespread use from the late 2020s onward.

For batteries, the Honda Group is developing its proprietary solid-state batteries. The Honda Group have decided to construct a demonstration line to ensure performance at the mass-production level as well as superiority in terms of cost and safety.

Regarding driver-assistive technologies, the Honda Group will work to promote and evolve “Honda SENSING,” a safety and driver-assistive system, for the purpose of preventing accidents.

In addition, the Honda Group will work to develop intelligent driver-assistive technologies, which aim to reduce driving errors and risks and eliminate human errors while driving by adapting to the abilities and conditions of each individual. The Honda Group will also work to develop safety and security network technology for anticipating and avoiding risks before an accident occurs by connecting all traffic participants (people and mobility) via telecommunications. Alongside these efforts, the Honda Group will promote the spread and expansion of motorcycle safety technology and the development of safety education technology.

b. New businesses

The Honda Group is committed to increasing the convenience and efficiency of society as a whole through a variety of electric products and services, as well as batteries, energy, mobile power packs, hydrogen, and the development of a connected platform that integrates these products and services.

Through these efforts, the Honda Group will provide multifaceted and multidimensional solutions to meet customers’ applications in diverse countries and regions, and achieve the joy of free mobility with zero global environmental impact.

Going forward, while promoting electrification, the Honda Group will work to transform its business portfolio by developing businesses that deliver various services and value to customers through products that integrate hardware and software.

Regarding research and development expenses and capital investment, the Honda Group will further shift resources to electrification and software areas and will also utilize alliances and other means for efficient and effective resource management.

In addition, in order to create free time for people and expand the time and space in which they can play an active role, the Honda Group will work on three areas: “eVTOL,” “Avatar Robot,” and “Challenging the Space Domain.”

The Honda Group will enhance the business strategy formulation function by steadily proceeding with the next initiatives, and build a highly competitive Mono-zukuri foundation to realize strong businesses.

a. Structure to realize strategies

In order to build strong businesses that can immediately respond to changes in the environment and can provide products that satisfy customer needs in a timely manner, the Honda Group has established a unified operational structure which integrates S-E-D-B (Sales, Engineering, Development and Buying) areas.

This enables the formulation of business strategies based on a big-picture view of product planning, development, buying/purchasing, engineering/production and sales, and the swift implementation of such strategies. At the same time, the Honda Group will realize Mono-zukuri reform and stable production with high-precision development of new models through frontloading and operation which integrates the entire process from development through mass-production.

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b. Mono-zukuri reform

In the automobile business, the Honda Group has strengthened its global models and regional models according to the needs of each region, with the aim of manufacturing challenging products unique to Honda. Efficient Mono-zukuri, in addition to product appeal, is indispensable for further enhancing the competitiveness of such models. To this end, the Honda Group is working to strengthen the structure in each area. Introducing the Honda Architecture, which is a company-wide initiative that increases the efficiency of development and expands parts-sharing for mass-production models, the Honda Group has sequentially applied it, starting with the global models of Civic. By further expanding its application, Honda will enhance the efficiency of existing businesses and repurpose those man-hours to conduct research and development in advanced areas, thereby accelerating development for the future.

In addition, the Honda Group will work to strengthen existing businesses by steadily optimizing production capacity in all regions.

c. Further improve quality

To achieve a new level of outstanding quality of products, the Honda Group has continued activities to further improve quality at every stage: design, development, production, sales and service including suppliers. Going forward, the Honda Group will team up with other companies, including those from other industries, to challenge new forms of mobility that incorporate electrification, driver-assistive technologies and IoT in creating new value through open innovation. To that end, the Honda Group will evolve its activities to realize a new level of outstanding quality, by pursuing the utmost quality not only in products and services provided to customers but also in every area of business at all points of customer contact, alongside evolution in “mobility” and “daily lives.”

d. Continue to enhance Honda’s social reputation and communication with the community

In addition to continuing to provide products incorporating Honda’s advanced safety and environmental technologies, the Honda Group will continue striving to enhance its social reputation by, among other things, strengthening its corporate governance, compliance, and risk management, as well as participating in community activities and making philanthropic contributions.

Through these company-wide activities, Honda aims to be a company that society, which includes our shareholders, our investors and our customers, wants to exist.

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(5)  Changes in Financial Position and Results of Operations of the Group and the Parent Company

(a)  Changes in Results of Operations and Financial Position of the Group

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(b)  Changes in Results of Operations and Financial Position of the Parent Company