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President's Message 2005

Management group message

January 18, 2005

Making a Giant Leap with the New Medium-Term Management Plan

The Yamaha Motor Group has been building a profitable foundation through the implementation of the previous medium-term management plan, NEXT 50. 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. If we rest on our laurels now and ease up on our corporate reforms, our past efforts will have been in vain. My personal mission is to accelerate the momentum of reform and establish a solid business foundation for further growth and higher profitability. Ultimately, the strengthened foundation will be a springboard for the Yamaha Motor Group to take its next giant leap into the future.
This year marks the milestone 50th anniversary of the Yamaha Motor Co., Ltd. To kick off this memorable year, we have just launched our new three-year medium-term management plan, and revamped our accounting system, adopting the calendar year as the financial year, rather than the previous April 1 to March 31 accounting period. At the dawning of this crucial year, I would like to discuss key priorities for 2005 -- the items that will demand our focus as we work toward higher management targets.

1. New Corporate Vision and Message for the 50th Anniversary Year

The 50th anniversary milestone is a good opportunity for us to review our growth and development as a manufacturer over the last half-century, and to examine our present corporate status.
To honor the predecessors who forged our history at Yamaha Motor, and in appreciation of our group companies, our suppliers, our employees and their families, as well as customers and fans of Yamaha Motor products around the world, we intend to convey a renewed vision and message, based on the key words "passion, excitement, future." By developing and sharing this vision and message, we aim to raise our level as a company, and enhance our ability to touch peoples' hearts.

2. Steady Implementation of the New Medium-Term Management Plan

In the new 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, and making Yamaha the market's exclusive brand. 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.
By meeting the challenges before us, we will be able to fully serve all our stakeholders, including shareholders, customers, suppliers, employees and society at large. Thus, we can deliver still greater value and really touch people's hearts.

3. Promoting SMART* Reform

Last September, we launched an organizational reform project -- SMART -- aimed at upgrading the functions and improving the productivity of the Company's administrative divisions. This year, we expect to see the results, and plan to introduce SMART reform to our business divisions at the earliest opportunity.
Yamaha Motor, like many other companies in Japan, has not been geared to respond quickly to changes in the economic and business environment. However, just because other Japanese companies lag behind international standards in this regard doesn't mean that we have to. Those companies capable of quickly reading change and taking measures to accommodate it will emerge as winners, and I believe that we will be among them. Each and every Yamaha employee is determined to take responsibility in this regard -- to assess both the personal and corporate environment, results and goals, and move aggressively to build the ideal corporation.

*SMART stands for Strategic, Measurable, Accountable, Return max, and Timely.

Vitalizing the Organization and Maximizing Employees' Capabilities

To this point, I have been discussing key priorities for the year from a business perspective. However, in pursuing business operations, we must never forget CSR (Corporate Social Responsibility). The world demands companies be more than productivity-enhancing, profit-making entities; they must be beneficial to society. Our company not only stresses compliance, but also actively provides technologies products, and services that meet society's expectations for environmental preservation and other public interests. In addition, we make a variety of social contributions. By fulfilling our social responsibilities, I believe that we can build a foundation to grow as a company favored by both customers and society in general. I have reminded all management personnel and employees of our commitment to corporate social responsibility, and to remember that CSR is always our first prerequisite for doing business.

Finally, I recognize that the task of vitalizing the organization and maximizing employee capabilities is becoming increasingly important for us to survive in the global mega-competition. A company is the aggregate of its personnel's capabilities. In the coming years, we will focus on vitalizing the corporation by raising the capabilities of our employees. Needless to say, management personnel must take leadership and coordinate the efforts of the entire Yamaha Motor Group to achieve the goal. I believe we can and will make YAMAHA the most trusted emblem in the world, with the greatest emotional connection, in our unique Yamaha style. Now is the time for us to take the first step in our journey toward greater prosperity for the next 50 years.

Yamaha Motor Co., Ltd.
President and Representative Director
Takashi Kajikawa
(January 18, 2005)

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