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Honda Motor Co. said Wednesday it will merge three subsidiaries to form a new motorcycle sales unit in August to strengthen its domestic bike business.

Honda Motorcycle Japan Co., capitalized at 496.8 million yen, will be formed by integrating Honda’s three existing wholesale subsidiaries in Tokyo, Aichi and Osaka Prefectures.

The new firm will also absorb Honda’s domestic motorcycle sales division, regional sales operations and customer support division, Honda said.

The new firm will be based in Tokyo and will handle all of the functions of Honda’s motorcycle sales operations, including new and used motorcycle sales, parts and accessories sales and product planning and marketing. It will also handle advertising and host motor sports activities. The streamlining effort will enable Honda to increase the efficiency of its motorcycle business and meet customer needs, it said.

Honda, which sold some 400,000 motorcycles in fiscal 2000, plans to increase sales to 500,000 units in fiscal 2003. The new firm will have 600 employees, who will be transferred from the three subsidiaries and the related divisions. Some 250 remaining employees of the three subsidiaries and divisions will be relocated to Honda’s other divisions, including its car sales operations, it said.

Tatsuhiro Oyama, in charge of Honda’s domestic motorcycle sales division and scheduled to become a board member in June, is expected to become president of the new firm, Honda said.

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