Honda Advertising StandardsIssued October 2010TABLE OF CONTENTSHONDA ADVERTISING STANDARDSSECTION A: GENERAL RULES OF CONDUCT. 4Auto Mall . 4Primary Area of Responsibility . 5Advertising Content. 5Web Advertising - Search Engine Word for Adword. . . .7Prohibited Practices. 7Prohibited URL Use .8SECTION B: ADVERTISING STANDARDS .10General Applications .10Ambiguous or Misleading Statements.10Bait and Switch Advertising .10"Free" Options or “Sales” .11General Disclosure Application .12Pricing .13Price Advertising.14Disclosure of Financial Information – Financing (Cost of burrowing) .14Disclosure of Financial Information – Lease Advertising .15SECTION C: ADVERTISING RESOURCES .16SECTION D: COURSE OF ACTION FOR NON-COMPLIANCE .19SECTION E: OTHER.20INDIVIDUAL DEALER ADVERTISING GUIDELINESSECTION F: FUNDING GUIDELINES.21Reimbursement .22SECTION G: ELIGIBILITY GUIDELINES.23New Models only.23Logos .23Product Illustration.23Feature and Benefit description.23Dealership Promotions and Event Sponsorships.23APPEXDIX ‘A’ (Unacceptable / Acceptable Dealer Advertising words) .24AUTOMOTIVE DEALER ASSOCIATION ADVERTISING GUIDELINESSECTION H: FUNDING GUIDELINES.25SECTION I: MANAGEMENT OF AUTOMOTIVE ASSOCITATIONS.26SECTION J: ADMINISTERING ASSOCIATION ADVERTISING .28APPENDIX 'B' (Dealer Association Monthly Statement & PDCA) . . .30ASSOCIATION & DEALER CLAIM PROCESSSECTION K: CLAIM SUBMISSION PROCESS.33SECTION L : QUALIFYING MEDIA & REQUIRED BACK UP . .34SECTION M: NON-ELIGIBLE MEDIA ACTIVITIES . 39HONDA CERTIFIED USED ADVERTISING - ASSOCIATIONS & INDIVIDUAL DEALERSSECTION N: USED AUTO VEHICLE ADVERTISING .40SECTION O: QUALIFYING MEDIA & REQUIRED BACK UP . .41Honda Canada Inc.Page 2

Honda Advertising StandardsHONDA ADVERTISING STANDARDSPurposeThe primary purpose of these Advertising Standards is to clarify andexpand on what is outlined in the Honda Dealer Agreement with regardto advertising.The Standards are intended to:Establish guidelines for all Honda dealer advertising and promoteconsistency in its execution and Promote the sales of Honda new and certified used products,service and parts in concert with all applicable federal or provinciallaws, municipal ordinances or administrative regulations, generallyaccepted rules of ethics including but not limited to full disclosure ofsales offers to consumersPromote and preserve Honda’s brand image in the market placeand by extension, Honda’s philosophy of “Lifetime OwnershipLoyalty”.It is Honda’s intention to work closely with its dealers and DealerAdvertising Associations to ensure that the standards are well understoodand adhered to. Accordingly, if there is any doubt about the eligibility ofyour advertising and promotional materials and/or activities, or if youhave any questions regarding the interpretation of the standards herein,please contact your Zone representative before proceeding.Honda Canada Inc.Page 3

Honda Advertising StandardsSECTION A: GENERAL RULES OF CONDUCT“Advertising” must not be untruthful or misleading and must adhere to anyapplicable federal or provincial laws, municipal ordinances oradministrative regulations, generally accepted rules of ethics includingbut not limited to full disclosure of sales offers.The term “Advertising” includes all types of advertising, promotional andmerchandising materials or activities deemed to be in the public domain.This includes, but is not limited to, print, radio, television, direct mail, POP,outdoor signage (including billboard advertising and exterior on-sitesignage), internet and on-vehicle advertising.All ads must comply with Honda’s image standards as well as promote theHonda brand and/or its products, and/or product features and benefitsand/or competitive advantages against other manufacturers.Competitive franchise or competitive product advertising must not formpart of, or appear in any way to be associated with your Hondaadvertisements. Dealers and Associations must take the necessary steps toclearly distinguish their Honda advertisements from competitive franchiseor product. If a dealer is a member of a regional association they cannotcombine advertising with another dealership. If the dealer has more thanone Honda franchise they cannot combine advertising.Auto MallDealerships that are part of an “Auto Mall” may participate in a joint automall event and/or promotions if the nature and elements of theevent/promotion are in accordance with all elements of the HondaAdvertising Standards. Accordingly, all auto mall event and/or promotionmust be pre-approved by the District Sales Manager. If they do notadhere to the standards, the dealership must remove its name from alladvertising materials associated with the event/promotion. Honda feelsstrongly that a dealership that is part of an auto mall should abide by thesame standards as a dealership that is not.An “Auto Mall” is defined by the industry as a group of dealers operatingout of the same geographical location and cooperatively participating inmarketing activities under a shared group name. It must be a registeredcorporation with a board of directors and by-laws governing its activitiesand must have prior approval of its status as an auto mall from HondaCanada.Honda Canada Inc.Page 4

Honda Advertising StandardsRelationship to Honda Canada Inc.All advertising materials must clearly indicate that the message is from thedealer and must in no way imply that the material and/or activity involve“Honda Canada Inc.”, the Corporation. Accordingly, advertising thatindicates or implies that a dealer has a special relationship with Honda(e.g. Honda Super Centre, Honda Super Store, Honda Factory Outlet,Honda Direct, Factory Approved, Factory Authorized etc.) shall bedeemed unacceptable. The term “Honda Powerhouse” however, isacceptable, since it is a Honda approved dealer designation.Primary Area of ResponsibilityDealers may only advertise in media that cover the majority of theirPrimary Market Area of responsibility (PMA). As a general rule, a dealer willbe allowed to advertise in a medium that covers 20%, or more, of theirPMA. This includes, but is not limited to, Yellow Page Directories.For Honda Powerhouse Dealers who advertise multiple Honda productswithin an ad, advertising coverage will be based on their smallest PMA,meaning their Auto PMA. If the advertisement does not include autoproducts, then the advertised products PMA (ie: MC/ATV/PE/Marine) willapply. If there is any ambiguity in determining the eligibility of anyadvertising medium, the District Sales Manager must be consulted and willarbitrate a solution.Advertising ContentDealers shall cooperate fully with any Zone and/or National promotionalprograms as stated in the Dealer Agreement.Multi Honda Products AdvertisingDealers may advertise multiple Honda products/ services within an ad.Therefore, a Honda Powerhouse ad may include new Honda vehicles,motorcycle, power equipments, marine products, ATV, and parts andservices. In addition, if the Honda Powerhouse signed up for the HCUVprogram, it will be able to include HCUV vehicles within the ad. OnlyHonda products and services will be eligible for coop reimbursement.Honda Canada Inc. will not pro-rate ad portion to Hondaproducts/services, the entire ad will be rejected if non-Honda products orservices are includedMessageAdvertisements must carry messages consistent with those sponsored byHonda Canada and/or by the respective Dealer Association. The purposeof this standard is to ensure that there is consistency in the messagesHonda Canada Inc.Page 5

Honda Advertising Standardscommunicated to the consumer and prevents individual dealers fromundermining the National and/or Association initiatives.The ZoneManager and National Office have the authority to make all finaldecisions pertaining to the application of this standard. This standard isnot intended to set the terms of trade (i.e. price, lease rates/payments,finance rates/payments and promotional giveaways) relative to thedealer’s selling price and/or in-house promotions.Unacceptable practice Advertising that states or implies that one dealer is superior toanother; except Honda auto Dealers “Q” Dealers who may put the“Q” logo for the year that follows their award only. The “Q” logo,the year and the words “Quality Dealer” are the only indicators thatmay be used. Also, ISO Certified dealers may state that they are“ISO XXXX Certified”. Advertising that implies a distressed sales environment. All dealer advertising and promotional materials must make thecorrect use of the Honda logo. This also extends to all internaldealership stationery incorporating the Honda logo. Authorizedlogos for automobile dealer use can be found on the internet For logos associated with Motorcycle,ATVs, Marine and Power Equipment can be found on the internet . No promotional events are to be held outside of the dealer’sprimary place of business without prior written approval from theDistrict Sales Manager. Dealers taking part in internet activities must adhere to thestandards herein and, if the nature of the activity(ies) is notspecifically covered by the standards, the spirit of this documentapplies. By way of example, dealers must comply with all relevantprivacy legislation applicable to their internet web site and otherrelated activities.Honda Canada Inc.Page 6

Honda Advertising StandardsWeb AdvertisingSearch engine words for “Adword”Search engines play a vital role in the Internet experience, particularly forpeople looking for new or used cars.All dealers must follow this policy when purchasing or using Adwords intheir Internet marketing strategy. In addition, dealers must conform to therestrictions presented in this policy, even if they do not use co-opadvertising funds in their Internet campaigns. Through this policy, HondaCanada will regulate the use of specific geographic terms as well as otherkeywords, while controlling the use of words designating brands on theWeb. Geographic designations and names of other Honda dealers areexamples of this.PROHIBITED PRACTICESThis section specifically describes what dealers may or may not do withregard to use or purchase of Adwords. The following practices areprohibited for all Honda dealers:1. Dealers may not purchase a name/geographic word thatreferences a Primary Market Area (PMA) other than the Dealer’s PMA. Exception is made for open point cases where HCIregional pre-approval is required for access to co-opadvertising. If you do not have the appropriate regionalapproval, the use of Internet with open point wordsviolates this guideline. Any such approval expires whenthe open point is assigned.2. Dealers may not purchase as Adwords “greater region” words (suchas greater Toronto, greater Montréal, etc.) unless their Hondadealership is located in this greater region.3. Dealers may not purchase the names of provinces or the word“Canada” as Adwords. For example, dealers may not purchase the word“Quebec”. However, in the case where the name of the province ispart of the dealership name is an exception, e.g. YukonHonda.Honda Canada Inc.Page 7

Honda Advertising Standards4. Dealers may not purchase corporate Honda “words” or identities asAdwords. These may include, but are not limited to:i. Honda Canada Inc.ii. Honda Japaniii. Honda Corporation5. Dealers may not purchase the name of another Honda dealer asan Adword, in whole or in part, unless this name contains aregional/city term where there are two or more dealers.6. Dealers may not purchase domains, sub-domains or URLs from otherHonda dealerships as Adwords. Should a dealer hold the URL or domain name of one ormore other Honda dealerships, he/she must return itimmediately.7. Dealers need prior authorization from the Honda interactivemarketing department before purchasing the following make ormodel names, logos and slogans as Adwords: Civic Nation/The Power of Dreams All current or previous vehicle brands, such as: Civic,Accord, etc.Note: Honda dealers or agency representatives may submit arequest to use these words. All brand names must match exactlywhen purchased, particularly the term “Honda”.CO-OP ADVERTISING ELIGIBILITYYour Adword campaign is eligible for co-op advertising reimbursement,provided it meets the requirements outlined in these guidelines.The Adword campaigns must meet all mandatory criteria outlined in theseguidelines. In addition, dealers must have a dealer Web site approved byHonda Canada (local office).PROHIBITED URL USEThis section specifically defines what dealers may or may not do with URLs.Dealers using Internet to bring the Honda brand or other Honda dealersinto disrepute will be subject to disciplinary action. The following practicesare prohibited for all Honda dealers:Honda Canada Inc.Page 8

Honda Advertising Standards1. Dealers may not purchase or own domains, sub-domains or URLsfrom other Honda dealerships.2. Dealers may not purchase or own domains, sub-domains or URLswith words representing the brand, logo, slogans or vehicle modelsof Honda Canada. The URL must be specific to the dealerpromoting it.; or any type ofURL registration related to Honda Canada products or brands. Should a dealer own another dealership URL or domain name orbrand or product of Honda Canada, these registrations must beimmediately returned to HCI.3. The dealer’s Web site URL must be specific to the name or locationof the dealership. A dealer may have several URLs linked to his/her Honda Website, provided these URLs are within his/her PMA or are related tothe name of the dealership.Honda Canada Inc.Page 9

Honda Advertising StandardsSECTION B: ADVERTISING STANDARDSGeneral Applications All advertisements must comply with applicable federal, provincialand other laws. Advertisements must not present insulting portrayals of individuals orgroups, and must not exploit violence, sex, children, customs orcharacteristics of religious or ethnic groups, persons with disabilitiesor any person or group in a way that offends current legal andethical standards. Advertisements must not include derogatory language about themotor vehicle dealer industry or a specific dealer. Examplesinclude:o No salespeople to hassle you;o Not like other dealerships;o Don't trust other dealerships.Ambiguous or Misleading Statements Advertisements must not contain statements that, in Honda’sopinion, are ambiguous, misleading or deceptive due to unclear,unverifiable or inaccurate information. Advertisers must not use advertising to knowingly misrepresent,through statements or omissions, a vehicle's mechanical orstructural condition. Advertisements cannot refer to an award unless its source and dateis disclosed and approved. Advertisements cannot refer to anaward when it was purchased by the dealer, and is not based onany verifiable test or research.Bait and Switch Advertising A product or class of products must not be advertised at a specificprice or other incentive unless the dealer is able to supply a quantityof those products that, in the opinion of Honda Canada Inc., isreasonable, considering factors that include the size of thedealership, and the target area of the advertisement.Honda Canada Inc.Page 10

Honda Advertising Standards Advertisements must not misrepresent the opportunity to purchasea product. If the available supply of products is unusually limited,the nature of the limit, such as the number available or the timethey are available, must be disclosed. Phrases such as "supply limited'' and "limited time only" areprohibited if they are misleading considering factors including thenumber of products available to the dealer, and the Dealer's PMA. Every effort must be made for pictures, or other visualrepresentation of a product featured in any advertisement to beexact. However there may be situations where an exactrepresentation of the product advertised is not possible. In suchcases, a visual representation of the model and trim level thatcomes closest to the one advertised should be used along with adisclaimer clearly identifying the model and trim level shown. Thatdisclaimer should be placed directly below the image in a font sizethat is easily legible to the consumer. Displaying such disclaimers inthe legal copy of the advertisement is not acceptable."Free" Options or “Sales” Advertisements must not use the word "free" in connection withanything that can only be obtained with the purchase of aproduct. An acceptable phrase is "included at no extra charge", if itis accurate. Use of the word “Sale” must respect the legal implication of theusage of the word. Please refer to the following:A. “sale” is the reduction in regular price for a limited time. In orderto meet the legal requirements: a sale should not last longer than 90 days; and the item must be offered in good faith at the regular pricefor at least 50% of the time in the last 6 months;OR more than 50% of the sales volume of that item must bemade at the regular price.B. “sale” includes the following types of offers: advertising that refers to a lower price with wording suchas “sale” or “price reduction”. The event does not have tobe available to everyone to be considered a sale. AnyHonda Canada Inc.Page 11

Honda Advertising Standards price reduction to any group will qualify (i.e. currentHonda owners, first time buyers, etc.)added value offers including bonus items, buy one getone free, volume discounts etc. examples of these types ofoffers would be special price when you buy a set of tires(vs. just one), a reduction in the price of an additionalaccessory if you buy more than (i.e. for oil changes or other service items – thecoupons can be for any value, including free)free pick-up or delivery when you have your vehicleserviced (unless this is always available).General Disclosure ApplicationHonda Canada Inc. does not review Dealer advertising for legalcompliance. Dealers are entirely responsible to ensure that theiradvertising is not unfair, untruthful, misleading or in violation of any federalor provincial law, municipal ordinance or administrative agencyregulations. However, we strongly recommend that Dealers follow theguidelines below. Any information required by these standards to be disclosed mustbe sufficiently clear and prominent so that it can be easily noticedand understood by a consumer. Disclosure must be in a formappropriate to the advertising medium. The following factors are tobe considered: Size of print Clarity, legibility of font; Location of the disclosed information in the advertisement; Prominence of the disclosed information compared withother information in the advertisement; In a broadcast advertisement, the length of time that themessage appears or is presented. In addition, all disclosure in advertisements appearing innewspapers, periodicals and other publications must be printed in aminimum size and font that is at least the size and font normallyused in classified advertising by the publication where theadvertisement appears. When advertising auto vehicles, Dealer Associations and IndividualDealers having consumer giveaways must state the value rebatesand should be stated in the following format: “ABC includesHonda Canada Inc.Page 12

Honda Advertising StandardsGST/PST/QST/HST, where applicable.Some conditions apply.”Should a dealer wish to hold an event or promotion, special offers orgiveaways cannot exceed a perceived retail value of 200 perauto vehicle. Dealer may give away higher value prizing, up to amaximum of 200 times the number of auto wholesaled for themonth. All giveaways must receive prior approval from your ZoneManager. Consumer rebates are applicable on best negotiated price andshould be stated in the following format: “ XXX rebate is applicableon the best negotiated price, taxes must be paid on the fullpurchase or lease amount of the vehicle.” . All advertising promotions must include “limited time offer” All disclosure in advertisements appearing in newspapers,periodicals and other publications must be printed in a minimumsize and font that is at least the same as the size and font normallyused in classified advertising by the publication where theadvertisement appears.All advertisement that includes or mentions product specificationsmust include the following disclosure, “Information about theproduct is believed to be accurate at the time of publication. Wereserve the right to make changes at any time, without notice orobligation. Errors and omissions excepted.PricingCurrent year model advertisements containing price-related terms mustidentify the current manufacturer’s suggested retail price (M.S.R.P) or theregional advertising association’s specific advertised price. Where theRegional Ad Association has agreed on a specific advertised price,dealers may not advertise for less, but may sell for less.Any changes in M.S.R.P. on non-current models must receive Zone’s priorapproval before proceeding.Note: For this purpose, the current model year shall extend until HondaCanada Inc. issues a dealer bulletin listing pricing for the next model year.Honda Canada Inc.Page 13

Honda Advertising StandardsWhen advertising the price of a Honda product, the dealer must abide byall applicable federal and provincial laws and regulations governingadvertising disclosure.Price AdvertisingVehicle price advertising must disclose that the advertised price does notinclude the following, where permitted by law: Industry specific taxes; License and registration fee chargesThe following are examples of acceptable wording: "Not including taxes, license, and registration"; "Taxes, license registration charges are extra".Disclosure of Financial Information – Financing (Cost of borrowing) Advertisements are required to conform to the cost of creditdisclosure legislation in force in the dealer’s province. Advertisements that offer fixed credit and discloses the interest ratepayable or the amount of any payment to be made must disclosethe following:o APRo The term of the credit agreement: andIf the advertisement applies to a specifically identified good;o the cash price; ando the cost of borrowing If the ad applies to a range of products, the ad must disclose thecash price and cost of borrowing of a representative transactionthat fairly depicts the credit agreements to which the ad applies. Advertisements that indicate or imply that all credit applications willbe approved must disclose whether a down payment may berequired. The APR must be disclosed in equal prominence to any otherinformation which necessitates the disclosure of the APR. ie: If amonthly payment is disclosed in the body of the ad, the APR mustHonda Canada Inc.Page 14

Honda Advertising Standardsbe disclosed in equal prominence to the monthly payment Typical disclaimer example, Ontario shown:†Offer applies to select new 2010 Civic, CR-V and Accord models.Representative examples: Limited time financing offers based onnew 2010 Civic 4D DX 5MT(FA1E2AEX)/Accord 4D LX5MT(CP2E3AE)/CR-V LX 2WD (RE3H3AEY) available through HondaFinancial Services, on approved credit. Selling Price is [x]/ [x]/ [x](includes EHF tires ( 29), EHF filters ( 1), air conditioning tax ( 100),OMVIC fee ( 5) and [x]/ [x]/ [x] freight and PDI) financed at [x]%APR equals [x]/ [x]/ [x] per month for [x]/[x]/[x] months. [x]/ [x]/ [x] down payment or equivalent trade-in may berequired. Cost of borrowing is [x]/ [x]/ [x], for a total obligation of [x]/ [x]/ [x]. Other taxes (including HST and [x]/ [x]/ [x] tax forfuel conservation, if applicable), [ ] PPSA, license, insurance andregistration are extra. Offers only valid for Ontario residents atOntario Honda retailers. Retailer may sell for less. Retailerorder/trade may be necessary. Vehicles are for illustration purposesonly. Offers subject to change without notice. See your Hondaretailer for full details. Offers valid until [x], 2010. The “selling price” in an individual dealer ad must include ALL fees,dealer charges, taxes (except HST and TFFC) and costsDisclosure of Financial Information – Lease Advertising The Standards apply to lease advertising. All advertising of leaseoffers must also disclose: that the transaction is a lease;the lease APRthe length of the lease termthe frequency of payments;if a payment is required before the beginning of the leaseterm, the amount of that payment, e.g. a security deposit;the fact that the payments are monthly and the amount ofthe monthly payment.The nature and amount of any other payments required inthe ordinary course of eventsif additional costs are charged for vehicle options, this factmust be disclosed.Honda Canada Inc.Page 15

Honda Advertising Standards Where the information required by the above is not the same for allleases referred to in the advertisement, the information may be fora representative transaction, if this fact is disclosed. An advertisement of a closed end lease must also disclose if theconsumer will be required to pay an extra usage charge at the endof the lease term (e.g. limitations on kilometers traveled) and theway it will be calculated. An advertisement of an open-end lease must also disclose what theconsumer's financial obligation will be at the end of the lease term. Typical Lease Disclaimer:†Offerapplies to select new 2010 Civic models. Representativeexample: Limited time lease offers based on new 2010 Civic 4D DX5MT(FA1E2AEX) available through Honda Financial Services, onapproved credit. [x]% Lease APR for [x] months. Monthly payment is [x] with [x] down payment or equivalent trade, [x] freight andPDI, [x] PPSA, first monthly payment and 0 security deposit due atlease inception. Total lease obligation is [x]. Taxes, license,insurance, registration and any applicable fees are extra. [x]kilometre allowance; charge of 0.[x]/km for excess kilometres.Retailer may lease for less. Retailer order/trade may be necessary.Vehicles are for illustration purposes only. Offers subject to changewithout notice. See your Honda retailer for full details. Offers validuntil [x], 2010. Offer applies to new 2010 Honda Civic modelspurchased by [x], 2010.Disclosure of Financial Information – Effective Interest Rates With rebates or non-stackable customer incentives, customers maybe given an opportunity to choose a rebate off the advertisedprice or a low lease or finance rate. Opting for the low finance orlease means foregoing the cash rebate The harmonized rules now mandate that financing APR’s becalculated based on the cash price at which the goods are sold tocash customers in the ordinary course of business, less any rebate(or non-stackable incentive ). When the foregoing rebate isfactored into the calculation the “effective interest rate” isnecessarily higher.Honda Canada Inc.Page 16

Honda Advertising Standards The effective interest rate must be disclosed together with any otherinterest rate or payment amount, with equal prominence, whetheror not the rebate is advertised Typical lease example, Ontario shown;Limited time lease offer on a new 2010 Civic (model XXXX) availablethrough Honda Financial Services, on approved credit.Representative example: 1.4% nominal lease rate for 36 months /8.9% effective rate for 36 months Monthly payment is 288 with XXXX down payment and with XXXX freight & PDI, EHF tires

Therefore, a Honda Powerhouse ad may include new Honda vehicles, motorcycle, power equipments, marine products, ATV, and parts and services. In addition, if the Honda Powerhouse signed up for the HCUV program, it will be able to include HCUV vehicles within the ad. Only Honda products and services will be eligible for coop reimbursement.