Department Manager North American Purchasing Planning

Honda North America, Inc.

November 20, 2014

Mark Willoughby

Introduction to Honda Operations in Ohio

Supply Base in Ohio

North American Purchasing Division Organization

New Model Launch Activities

Introduction to Honda Operations in Ohio

Global Supply Chain Challenges

Honda’s Strategy for Local Supply Chain

Our Supply Base in Ohio

Introduction to Honda Operations in Ohio

Supply Base in Ohio

North American Purchasing Division Organization

New Model Launch Activities

Introduction to Honda Operations in Ohio

Global Supply Chain Challenges

Honda’s Strategy for Local Supply Chain

Our Supply Base in Ohio

Total Global Sales CY 2013

27 Million Units Sold Worldwide

Powersports Automobile Power Equipment 16,790,000 4,279,000 6,008,000

China Honda Motor (China) Investment Co., Ltd.

Japan Honda Motor Co., Ltd.

Asia & Oceania Asian Honda Motor Co., Ltd.

South America Honda South America LTDA

North America American Honda Motor Co., Inc.

Europe/Africa/Middle East Honda Motor Europe Ltd.

November 20, 2014 Honda in North America

Honda has steadily expanded its capabilities to create products in N.A.,

from product concept and design to full development and production

Research & Development Manufacturing Sales

R&D Facilities

Manufacturing Facilities

November 20, 2014 Production & Research Facilities in North America

HRA Silicon Valley Lab (HSVL)

HRA Los Angeles Center

HRA Advanced Design Studio

(Downtown Los Angeles)

HRA Denver

HRA Cincinnati

HRA Ohio Center

HRA OSU (MIX)

HRA Detroit

HRA Marine Engine Research

Facility (Fla.)

HRA South Carolina

HRA Canada (Markham, Ontario)

HRA Burlington, N.C.

(Honda Aero, Inc.)

HRA North Carolina

HRA Halifax, Nova Scotia, Canada

Ohio Honda of America Mfg., Inc.

• Marysville Auto Plant • East Liberty Auto Plant • Anna Engine Plant

Honda Transmission Mfg. of America, Inc.

Indiana Honda Manufacturing of Indiana, LLC

Alabama Honda Manufacturing of Alabama, LLC

Georgia Honda Precision Parts of Georgia, LLC

North Carolina Honda Power Equipment Mfg., Inc. Honda Aircraft Company, LLC Honda Aero, Inc.

South Carolina Honda of South Carolina Mfg., Inc.

Canada Honda of Canada Mfg.

• Plant 1 • Plant 2 • Engine Plant

Mexico Honda de Mexico S.A. de C.V

• Guadalajara Motorcycle/Parts Plant • Guadalajara Auto Plant • Celaya Auto Plant

Manufacturing Facilities

R&D Facilities

0

250

500

750

1,000

1,250

1,500

1,750

Units in Thousands

Auto production facilities have combined to produce more than 26.8 million automobiles since 1982

Honda of

Indiana

241,589

Honda of

Alabama

333,556

Honda de

Mexico

63,172

Honda of

Canada

408,124

Honda of

America

734,772

2013 CY Total

1,781,213 units

November 20, 2014 North American Auto Production History

The North American region has become Honda’s volume leader globally,

and more than 40% of Honda’s North American production is in Ohio

Introduction to Honda Operations in Ohio

Supply Base in Ohio

North American Purchasing Division Organization

New Model Launch Activities

Introduction to Honda Operations in Ohio

Global Supply Chain Challenges

Honda’s Strategy for Local Supply Chain

Our Supply Base in Ohio

Last year, Honda spent more than One-Third of its total North American budget with our 158 Ohio Suppliers.

Over the past five years, Honda purchased more than $37 billion parts from our Ohio suppliers. In other words, the Buckeye State is plays an essential role in Honda’s supplier network.

November 20, 2014 North American Supply Partners

In 2013, Honda manufactured 1.78 Million vehicles in North America,

as parts purchases in the region exceeded $25.5 Billion – The Most Ever.

November 20, 2014

14,200 Employees

5 Manufacturing Facilities

Additional 7 Operational Locations

Over $9 Billion Invested

2014

November 20, 2014 U.S. Suppliers in Ohio

• Honda purchased* $9.7 billion in parts from 158 Ohio suppliers in calendar year 2013

*OEM parts purchased by all Honda plants in North America as of Dec. 31, 2013

-

2,500

5,000

7,500

10,000 M

illio

ns

More than $63.2 Billion in Ohio Supplier Spend Since 2005

Introduction to Honda Operations in Ohio

Supply Base in Ohio

North American Purchasing Division Organization

New Model Launch Activities

Introduction to Honda Operations in Ohio

Global Supply Chain Challenges

Honda’s Strategy for Local Supply Chain

Our Supply Base in Ohio

November 20, 2014

Anna

Marysville

Akron

Canton

Jeffersonville

Bucyrus

Marion

Steel Bar from Akron/Canton

Steel processed in Akron

Forging supplier in Jeffersonville

Machining in Bucyrus

Assembled into engine at Anna

Assembled into Auto at Marysville

Scrap recycled

Business opportunities exist in Ohio for the extended supply chain raw material, sub-tier, tier 1, transportation, warehousing, packaging & assembly

Raw Material Work-in-Process T1 Parts Completely Built Unit Sub-assembly

Supply Chain Management • Part Development • Production Planning • Parts Procurement • Parts Manufacturing • Parts Delivery • Final Manufacturing • Supplier Relationship Management

Supply Chain Management in Ohio

SUPPLIER

SUPPLIER

SUPPLIER

SUPPLIER

Consolidation Center

MILK RUNS

Third Party

Logistics

HONDA

Orders

Advance Ship Notice

November 20, 2014

Honda maximizes logistical utilization and minimizes environmental impact by optimizing transportation routing

HONDA

HONDA

Logistics Management

HAM

HMIN

Suppliers

Japan

China

Thailand

Many parts are shared between plants and suppliers requiring duplicate storage and handling

Mix freight to eliminate 20ft containers

Improve vanning efficiency Completely fill the containers Improve stack ability

Completely fill each case or skid

Europe

Goal: Eliminate waste in Container and Cases in order to reduce overall shipping cost through consolidation of product

November 20, 2014 Ohio’s Role in Global Logistics

Regional Logistics Center

*Located in Marysville, OH

Introduction to Honda Operations in Ohio

Supply Base in Ohio

North American Purchasing Division Organization

New Model Launch Activities

Introduction to Honda Operations in Ohio

Global Supply Chain Challenges

Honda’s Strategy for Local Supply Chain

Our Supply Base in Ohio

Brazil

Canada

US

Thailand

Turkey

Malaysia

Pakistan Taiwan Vietnam

Japan

Mexico

Indonesia

India

New Zealand

United Kingdom

China Egypt

November 20, 2014 North American Support of Global Production

• Many Honda suppliers in North America are successfully competing on a global basis • Honda has opportunity for competitive suppliers to support production overseas

4 door Accord Fog Light Japan & Thailand

CR-V Tail Lights Great Britain

November 20, 2014 Examples of parts being Exported from Ohio

Accord Engine Cover Japan

Bumper Turkey, Thailand & Vietnam

Honda suppliers are shipping parts to Honda manufacturing facilities throughout North America and 15 other countries around the world rely on parts from Ohio suppliers.

November 20, 2014

The ability to manage risk appropriately supports sustainable business strategies

Extended Supply Chain and Risk

Extended Global Supply Chain Assess Domestic Supply Chain

Exposure to…

Natural Disasters

Fire

and

Political Unrest

Pandemic

Financial

Data

Crisis!

Impact Assessment

Response Recovery

Reflection, Lessons learned

Purchasing’s Approach to Risk Management

Simplicity, Concentration, Speed, and Communication

Judgment of Risk Tolerance

Proactive

Identification & assessment

Intervention Action

Mitigation

Reactive

Stabilize

November 20, 2014

November 20, 2014 Summary

Ohio plays an essential role in Honda’s global operations

Honda has developed a robust supply chain in Ohio

Good relations with Ohio suppliers contribute to Honda’s success