Next50-Phase II in Review
Last year marked the conclusion of our previous three-year medium-term management plan, NEXT50-Phase II. In that plan, we focused on three key priorities: maximizing opportunities for business growth; continuing the profit-oriented approach; and creating value that differentiates Yamaha.
With regard to maximizing opportunities for business growth, we achieved substantial expansion in ASEAN countries such as Indonesia and Vietnam, and our results in Brazil and Russia were better than expected. In line with this expansion, we also made aggressive investments in growth areas, extending beyond the motorcycle business, to the outboard motor, intelligent machinery and life science businesses. However, markets like India remain areas of concern. Here we were unable to translate growth opportunities into business expansion during the previous medium term.
In terms of our performance in continuing the profit-oriented approach, we exceeded the plan targets for net sales and operating income. However, we failed to reach the target figure for operating income margin. While our motorcycle business remained highly profitable in ASEAN markets, we missed operating income margin targets for the motorcycle business in advanced countries, and for the recreational vehicle, outboard motor, and intelligent machinery businesses worldwide, due mainly to decreasing demand, intensified competition and rising raw material prices. In respect to product quality issues — which significantly and negatively impact our profitability — we are committed to strengthening our groupwide quality control system. Although it may take a bit longer to see the fruits of the efforts we are making in this regard, we are determined to stick with it. We can achieve the results we seek by continuing to work diligently and building on our steady progress.
In order to create value that differentiates Yamaha, we have successfully raised the profile of the Yamaha brand and have won a high market share in the ASEAN countries, thanks to our comprehensive marketing strategy for products, sales channels, advertising and services. Meanwhile, in the recreational vehicle business, Yamaha has become a pioneer in the new side-by-side vehicle category, making it a core product in this segment. However, in mature markets such as Japan, Europe and the United States, our high value-added strategy did not produce the results we had anticipated.
In respect to risk management and compliance issues, we have moved to strengthen our export control system. We have also made five promises to society, based upon the recommendations the Compliance Special Committee gave us. While we are taking action to deliver on these promises, the progress has been slow. We need to accelerate our activities in this regard, and continue with them until our commitment to society is ingrained throughout our company.