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President's Message 2014

Management group message

January 6, 2014

"Pursuing the unique style of Yamaha", "Breaking out of Our Current Norms" - Changes to Monozukuri* & Changes to the Way We Work

* engineering, manufacturing and marketing

For developed markets, 2013 marked a year of continued recovery in the US, while in Japan, owing in part to the policies of a new government in Japan, saw trends toward Japanese yen depreciation and high share prices. Europe, on the other hand, remained in the same economic slump of recent years. Emerging markets also experienced stagnating economies impacted by financial tightening and restrictions, and the economic slowdown that had begun the previous year.

Last year was the backdrop for the first year of our new medium-term plan, a year which saw initiatives for Yamaha’s own Monozukuri, marketing and global cost reductions. Notably, we launched products exhibiting concepts, technologies and designs that are uniquely Yamaha in both developed markets and some emerging markets. In addition, our efforts went into producing the best results possible with each launch: production commencement dates were brought forward, innovative sales initiatives were devised, and cost reductions exceeded targets.

2014 will represent the second year of the medium-term plan. In an environment characterized by lingering financial uncertainty in the European and emerging markets, Yamaha will firstly be driving initiatives to anticipate economic and demand trends. We will then strengthen and review our business strategies in each market to achieve profitability in all our businesses. We will also continue "pursuing the unique style of Yamaha" and "breaking out of our current norms" with a particular focus on the aspects of "changes to Monozukuri" and "changes to the way we work".

Changes to Monozukuri

The essence of Yamaha, which we refer to as “the unique style of Yamaha” lies in pursuit of three elements: generating innovative concepts, realization of superior technology, and achieving design that epitomizes refined dynamism. “The unique style of Yamaha” is manifested through the inclusion of these three elements in the process at development and manufacturing sites, and in direct communication with customers in market sales activities.

This kind of Monozukuri will proceed a step further in 2014. We will launch a range of products onto the markets that work to combine our two aims: high-quality manufacturing that is uniquely Yamaha, and innovative manufacturing that breaks out of current work norms in the aspects of planning, development concepts, design specs, environmental technology, and cost.

For motorcycles, we will produce high performance, low weight, low fuel consumption and low cost new-generation engines, platforms/models, and full-scale global models. In marine engines, we will bring out high performance, low weight, compact, and low-cost products while realizing our platform development concept. Recreational off-highway vehicles will offer products that will further expand our customer base, as will smart power vehicles, with product offerings that chase weight reductions, compactness, and low cost, increasing the value provided. Additionally, this year will see the long-awaited launch of the leaning multi wheeler which suggests a new kind of mobility and pursues "technological expansion" and "customer expansion".

This is a phase that takes high quality Monozukuri that is truly Yamaha, and unites it with innovative manufacturing, driving further evolution. The new organization for this purpose began operation on January 1.

Changes to the Way We Work

This year, we would like to base our “Changes to the Way We Work” on six points.
The first point we will work on is cutting the time it takes between product development and production start. Last year we brought forward production start dates for factories worldwide, achieving something that breaks out of our current norms. The next step is to make this the new norm. Amongst the intense competition of global business, the foundation of a company's competitiveness lies in the precision and speed of one of the most powerful muscles in manufacturing: the processes from product development to production start. To make every aspect of this work instantaneous, fast, short, and at low cost, we plan to implement process and system reforms that will sculpt this muscle for strong explosive force. We have a vision that in two years’ time, the new norm will be that development to production will take 18 months at the most.

The second change is to development grounded in the region and locale. At the ASEAN Integrated Development Center, the focus has been on flexible and responsive product development through technology, procurement, and manufacturing. The India Integrated Development Center proceeded with designs that meet local quality standards. We plan a rapid build of a development structure that features advanced technology research and basic platform development by Yamaha headquarters in Japan, and rapid product development overseas to tailor products to local markets. In two years’ time we have a vision that 30% or more of our products will be developed overseas.

The third shift sees the region and locale participating even more broadly in procurement and manufacturing. This year will see advances in new overseas business and overseas factory establishment. These include the boat business and new factory construction in China, the new motorcycle business and new factory construction in Pakistan, and construction of new factories in India and Argentina. As well as the increased technological capacity at each region, we imagine a future in two years’ time that is characterized by an optimum manufacturing structure for the overall Yamaha group.

The fourth change involves opening up the region and sites to tailored sales operations. There are still many opportunities to cultivate local markets in the motorcycle, marine products, power products, intelligent machinery (IM), smart power vehicles (SPV), and unmanned system (UMS) businesses. Our first job in each of the national markets worldwide is concerned with broadening the contact with customers in the regions, the regions in the national markets, and national markets around the globe, and moreover increasing our customer base. The next aspect of our work involves encouraging the customer to feel an affinity with us, "I'm glad I chose Yamaha, I'd choose Yamaha again". This is achieved through ongoing work to create strong customer relationships and points of contact in a way that is tailored to the culture of the site and market. Two years on, we want our workplaces around the globe to be staffed with people who can say with pride "I went to these lengths for the customer".

The fifth change will be to the speed of service. We come in contact with the customer before purchase, during the purchasing process, and after purchase. Of these, the longest period of time is after purchase. One of the ways to raise the customer's satisfaction levels during this period and encourage a sense of affinity described by comments such as "I'm glad I chose Yamaha; I'd choose Yamaha again" is by establishing a new organization in order to strengthen the driving force behind the 3S's (Sales, Service, Spare Parts). We have a vision that in two years’ time, Yamaha's 3S will be rated highly worldwide.

The sixth and final change is to human resource development, the backbone of a company's business. We have offered a well-rounded range of programs with everything from stratified education, function-based education, motivation of engineers etc., including overseas business experience, and global management personnel training. Moreover, we are working toward creating marketing training for the entire company, global human resources systems and global evaluation standards. We believe in human resource development that encourages people to meet challenges, make extra effort, and produce results, while at the same time valuing all cultural backgrounds, fields of strength, and specialist abilities. We have a vision of a future two years on where staff who personify the Yamaha brand are active in a range of fields all over the world, contributing to sustained growth and making optimum decisions overall.

We believe that the "changes to Monozukuri" and "changes to the way we work" in 2014 will link into the "changes to the company" from 2015 onward.

President, Chief Executive Officer and
Representative Director
Yamaha Motor Co., Ltd.
Hiroyuki Yanagi

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