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About Yamaha's Investment in the European Suspension Maker Paioli Meccanica S.p.A.

December 17, 1999

In a recent agreement, Yamaha Motor Co., Ltd. (YMC) has agreed to invest in an increase in capitalization of the suspension maker Paioli Meccanica S.p.A. (Location: Minerbio-Italy, Representative: Maria Giovanna Gnudi) based on an allocation of new shares to a third party. A signing of the agreement was held on Sep. 15 and, following official approval of the investment by the Italian government on Nov.13, operations under the new organization will begin on Jan.1, 2000.

The amount of 1.4 million Euro will be invested by Yamaha Motor Europe N.V. (YMENV, Location: Holland,Representative: Hiroshi Tanaka), YMC's European headquarters handling manufacturing, sales and R&D operations for Yamaha products in Europe, to increase Paioli Meccanica's capitalization, and this amount will represent a 14.9% capital investment ratio. Also participating in this increase in Paioli Meccanica's capitalization will be Kayaba Industry Co., Ltd. (Location: Tokyo, Representative: Kiyoshi Hosomi),which will make an investment equivalent of 10% of the company's capital with the intention of entering into a full-fledged 
technical assistance relationship. With this increase in capitalization, Paioli Meccanica's new capital investment ratio will be 75.1% for Paioli's holding company FIN. SAN. S.p.A., 14.9% for YMENV and 10.0% for Kayaba Industry.

Paioli Meccanica annually manufactures and sells over 300,000 sets of motorcycle suspensions primarily in the European market, making it the second largest suspension maker in Europe with a market share of about 20%.
YMC, on the other hand, has long been involved in building its manufacturing bases  in Europe and presently has three bases in France's M.B.K. Industrie S.A., Spain's 
Yamaha Motor Espana S.A. and Italy's Societa Belgarda S.p.A. that together boast
a total motorcycle production in the range of 350,000 units, which constitutes the largest unit production in Europe of all the Japanese motorcycle manufacturers. 
Presently, the European motorcycle market is a strong one that has been growing yearly due to a number of factors like the reunification of Germany, the opening of the East European markets and recent changes in the licensing laws for 125cc motorcycles. For 1999, market demand is expected to reach about 2.40 million units. At the same time, 50cc scooter sales are also strong, primarily in countries like Italy, France and Germany, with estimations for '99 sales set at about 1.2 million units, or roughly half of the entire motorcycle market. 

This investment agreement has resulted from a convergence of the aim of YMC to make full use of Paioli suspensions at the three main European Yamaha production bases with the goal of improving supply efficiency and reducing cost for the future and Paioli Meccanica's plans to expand its sales in the European market. And, under the new organization, efforts will be made with full-scale technical assistance from Kayaba to achieve major improvements in the quality, cost performance and supply timing of Paioli products. 

As a result of these efforts, orders from Yamaha's three production bases combined with Paioli's own sales efforts are expected to bring the company's annual production and sales of suspensions to a range in excess of 500,000 sets within a few years, making it a top supplier in Europe. At the same time, YMC expects to reap the benefits of increased-scale mass production.

At Yamaha Motor Co., Ltd. we have committed ourselves to a long-term management vision of "We Create 'Kando'-- Touching People's Hearts" and being "A Leading Company that Continues to Evolve in the Global Market." To achieve this goal we are engaged in a range of activities aimed at transforming ourselves into a company that is organized to be highly proficient at handling change. This investment in Italy's Paioli Meccanica S.p.A. is a move that is aimed not only at realizing global parts supply, increased efficiency and lower cost, but also building a corporate structure that is less susceptible to negative effects from changes in exchange rates by strengthening our local production bases in Europe. 

Outline of Paioli Meccanica S.p.A.

Name of Company : 

Paioli Meccanica S.p.A.

Address :

30/D,Via Ronchi Inferiore, 40061 Minerbio(BO),Italy

Representative : 

Maria Giovanna Gnudi

Foundation :

November 1973

New Capital : 

3.1 million Euro

New share holders :



Yamaha Motor Europe N.V. 


Kayaba Industry 


Employees :

pprox. 70 (in 1999)
approx. 100 (plan for 2002)

Main product :

Suspension system for Two-Wheelers

Production :

over 300,000 sets (in 1999)
over 500,000 sets (plan for 2002)

Turnover :

approx.22.5 million Euro (in 1999)
Approx.34.0 million Euro (plan for 2002)

Outline of Yamaha Motor Europe N.V.

Name of Company :

Yamaha Motor Europe N.V.

Address : 

Koolhovenlaan 101,1119 NC Schiphol-Rijk, The Netherlands

Representative : 

Hiroshi Tanaka

Foundation :

December 1968

Capital :

75.1 million Euro

Share holder :

Yamaha Motor Co, Ltd. 100.0%

Employees :

approx. 90 (as of end 1998)

Consolidated Turnover:

approx. 1,500 million Euro
with 14 subsidiaries in 10 countries

Main business :

European headquarters to operate Manufacturing, Sales, 
Service and R&D for Yamaha products in Europe

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