Integrated Report 2021(For the year ended December 31, 2020)

Without fearing change, we will aim to create new value expanding human possibilities by continuing to boldly take on uniquely Yamaha challenges.Overview of Fiscal 2020 On behalf of the Yamaha Motor Group, I would like to begin by offering our sincere condolences to anyone who has lost loved ones due to the COVID-19 pandemic and extending our heartfelt thoughts to everyone otherwise affected by this crisis. I would also like to express our deepest gratitude and respect for all the frontline medical practitioners and workers providing the essential services that support society.In fiscal 2020, ended December 31, 2020—the second year of our current Medium-Term Management Plan—I had initially planned to set a course for achieving the plan’s targets by orienting our focus on boosting the profitability of our existing businesses. This is one of the two main pillars of our basic policy of improving cash flows by raising the profitability of existing businesses, while promoting growth strategies and reinforcing our business platforms. However, seeing the dramatic changes in the business environment brought about by COVID-19 led us to quickly switch into survival mode. This decision reflected the lessons we learned from our experiences during the global financial crisis of 2008 triggered by the Lehman Brothers bankruptcy. At the same time, in fiscal 2020 we worked together as a group and strove to secure business continuity while keeping the well-being and safety of all our stakeholders—including employees, suppliers, and customers—as our top priority, suspending operations temporarily, implementing remote working systems, and other efforts in compliance with the directives and requests of authorities in countries around the world.In such an environment, the Company saw a decline in net sales due to a decrease in sales of motorcycles in the Land Mobility business and a fall in sales in the Marine Products business in the first half of fiscal 2020. Further, the suspen-sion of factory operations enacted in the first half of the fiscal year under review drove down capacity utilization rates, among other effects, and together with the impact of for-eign exchange fluctuations, both operating income and net income attributable to owners of parent recorded decreases.On the other hand, we saw an earlier-than-anticipated rise in demand. Demand has been on a recovery path since the second half of fiscal 2020 and our production floors are currently operating at full capacity as we work to restore inventory back to proper levels. Despite the decline in net sales and operating income in fiscal 2020, I believe we achieved a certain amount of success while working to promote cost reductions, risk control, the normalization of our supply chain, and other initiatives in the face of a challenging business environment.Fiscal 2021 marks the final year of the current Medium-Term Management Plan, but as announced on August 6, 2020, we have withdrawn our financial targets for the plan given the global spread of COVID-19. Nonetheless, our work to create new businesses for future growth and our basic policy of focusing on structural reforms for our businesses toward improving profitability remain unchanged, and I am of the opinion that we still made steady progress in these areas in fiscal 2020.Changes in the Business Environment Triggered by COVID-19 COVID-19 has given rise to significant changes in people’s lifestyles and value systems. Based on my experience with the aforementioned financial crisis, I thought that the recre-ation and leisure fields would be the last of all to recover, even after the lifting of lockdowns and other restrictions. However, despite limitations on the movement of people and on logistics, I believe there were only a few cases in which customers who had been considering purchasing our products actually refrained from doing so, owing to factors such as an increase in disposable income thanks to govern-ment support measures and subsidy programs—mainly in developed markets—and the absence of any lasting damage to retail financing for consumers.Outdoor recreation demand spiked following the lifting of 13Yamaha Motor Co., Ltd. Integrated Report 2021

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