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CYCLE – Yamaha ’05 target: 15% Growth in Cycle Sales

March 16, 2005
Filed under Features

Yamaha Motor Co. Ltd. says it plans to spend 210 billion yen ($2.05 billion) on capital investment over the next three years — 60% more than the previous three-year period — and said it expects total sales to rise 27% to Y1.45 trillion in 2007, from an estimated Y1.14 trillion in 2004.
This year marks the 50th Anniversary of Japan’s Yamaha Motor Co., Ltd. As a part of the 50th Anniversary celebration, Yamaha launched a commemorative Web site featuring data and numerous historical photos that detail the company’s history since its inception. The site will be updated continuously throughout the year as events worldwide mark the celebration.
Yamaha Motor Corporation, U.S.A., Cypress, Calif., says it also plans to pay tribute to the anniversary with events throughout the year. The direct link to the 50th Anniversary Web site can be found at http://www.yamaha-motor.co.jp/global/50th/index.html.

NEXT 50 – PHASE II
Yamaha says it forecasts global shipments of motorcycles to grow nearly 15% in 2005 to 3.62 million units. The company shipped 3.16 million units in 2004.
Sales in North America are expected to rise 5.6% in 2005 to 208,000 motorcycles, and sales in Europe are expected to rise 2.9% to 420,000 units. The company also says plans call for immediate expansion in Southeast Asia, China, India and Russia.
Yamaha formulated a new medium-term management plan, “NEXT 50 -Phase II,” running from January 2005 through December 2007, to succeed the previous medium-term management plan, “NEXT 50,” which ended in December 2004. The new plan specifies management issues, business strategies, and numerical targets for the period.
In a 2004 year-end statement, Yamaha Motor Co., Ltd. President and Representative Director Takashi Kajikawa said NEXT 50 – Phase II “is designed to solidify the company’s profitable business foundation, expedite ongoing reforms, and ultimately bring further growth and profitability.”
“The Yamaha Motor Group has been building a profitable foundation through the implementation of the previous medium-term management plan, NEXT 50,” said Kajikawa. “However, further efforts remain before us, since the business environment is expected to become harsher, due to such negative factors as the stronger yen against the U.S. dollar and the rise in raw material costs.
“In the new three-year medium-term management plan ‘NEXT 50-Phase II,’ we will strive to build on the profitable foundation we have established through NEXT 50 by promoting a business strategy aimed at balancing value, profitability and growth. Specifically, we will take on the challenges of creating value to differentiate Yamaha; continuing our profit-oriented approach; maximizing opportunities for the existing business, focusing on the Asian region; entering new business domains; and vitalizing the personnel and organizations that will help realize the value, profitability and growth we envision.”
Kajikawa says a part of the new plan is to expand profits for Yamaha’s motorcycle, outboard motor and ATV businesses in Europe and the U.S., as well as expanding the company’s motorcycle business in the ASEAN region and restructuring its business foundation in Brazil, China, India and Russia.

MOTORCYCLE & ATV STRATEGY
Yamaha says it plans to increase the number of new motorcycle model launches by about 25% during the new medium-term, as well as invest in strengthening its product development system and environmental technologies, specifically in Europe and the United States.
Another main ingredient for Yamaha’s international motorcycle strategy during the new medium-term is to focus on Asian operations, aggressively investing to expand production capacity from 1.6 million units to three million units, while introducing new models, and establishing a local parts company to raise the in-house production ratio in the region.
In the ATV business, Yamaha aims to boost profitability in a maturing U.S. sport and utility market while seeking further growth in developing small displacement markets such as Europe.

DISTRIBUTION
A third part of Kajikawa’s new medium-term management plan is to combine four distribution centers in Japan into one to cut costs and speed up the supply of spare parts to its global dealerships, including retailers in the United States.
To be built at a total investment of Y4.4 billion, the new parts distribution center will be located in Fukuroi City, Shizuoka Prefecture, Japan. Construction of the new parts distribution facility began this month; it is scheduled to be operational by May 2006.
Dealing with approximately 300,000 different parts, the current main Japanese parts center handles a total of about 15,000 order lines per day and supplies to other distribution centers in Asia, Europe and the United States.
The new “Global Distribution Center” will be the company’s largest parts distribution facility, capable of handling about 40,000 order lines per day.
In related news, Yamaha revamped its accounting system for the New Year, adopting the calendar year as the financial year, rather than the previous April 1 to March 31 accounting period.

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