This case reviews Honda’s ASEAN market expansion of two-wheeled vehicles. As a result of competition with China’s two-wheeled vehicle manufacturers, Japan was faced with a large decline in its market share in the year 2000 in China as well as in Vietnam. Faced with such a predicament, Honda introduced broad changes to its product strategy, such as expanding local development functions from the original Japanese model of CKD production, introducing low-cost models targeted the ASEAN market, and developing a wide range of localized strategies. The introduction of low-cost models significantly contributed to the increased market share and the company was able to develop a competitive edge over lower-quality Chinese vehicles, resulting in the long-term expansion of the two-wheeled ASEAN market.