Summary of Financial Results for the First Half-Year Ended September 30, 2001

Consolidated basis:

The Company has registered record sales for the third consecutive year; however, profits have fallen for the second consecutive year
Yamaha Motor's consolidated net sales for the first half-year ended September 30, 2001, increased 5.2 percent from the same period of the previous year, to 498.3 yen billion, setting a record high for the third consecutive year, amid the yen's depreciation during the term - by 12 yen against the U.S. dollar, and by 5 yen against the euro - compared with the same period of the previous year.

This sales increase was mainly attributable to the sales gains in the motorcycles, marine products and power products businesses, which more than offset sales decreases in other businesses, including the IM (industrial robots) business.
Broken down by business segment, motorcycle sales rose 9.1 percent from the same period of the previous year, to 265.3 yen billion, reflecting sales growth in North America, Asia excluding Japan, and Central and South America. In addition, marine product sales climbed 9.0 percent, to 100.1 yen billion, driven by favorable outboard motor sales in Europe and the United States, while power product sales rose 7.3 percent, to 88.6 yen billion, due to expanded ATV (all-terrain vehicle) sales. However in the IM business, sales of surface mounters - its mainstay products - which mount electronic components on printed circuit boards, significantly declined. Surface mounter sales fell 42.1 percent from the same period of the previous year, affected by depressed capital investment resulting from slow IT markets.
A view of sales by geographic segment reveals that overseas sales throughout major markets, including North America, Europe, Asia, and Central and South America, increased 9.8 percent, while in Japan, sales dropped 12.3 percent. Results were particularly favorable in North America, where sales rose 8.4 percent, and in Asia excluding Japan, which enjoyed a 19.5 percent gain, due to increased sales in Indonesia and the new consolidation of the Indian subsidiary. Overall, overseas consolidated sales represented 82.6 percent of consolidated net sales.

In terms of profit, there were several positive factors, such as a gain from currency translation into yen totaling 12.2 yen billion, due to the yen's depreciation during the term, and a decline in cost of sales amounting to 3.9 yen billion. However, profit increases realized from these developments were counteracted by declines in both operating income and ordinary income, which dropped 20.6 percent to 21.6 yen billion and 18.6 percent to 19.1 yen billion, respectively, reflecting negative factors including a 14.3 yen billion increase in selling, general and administrative expenses, and sales decreases in IM and other businesses. Net income for the term decreased 34.5 percent, to 7.5 yen billion, due to the appropriation of extraordinary losses of 4.1 yen billion - which was a quarter of the amount of the shortage in the provision for employees' retirement benefits scheduled to be written off in fiscal 2001 and 2002 - and 1.4yen billion for structural reform of boat businesses in Japan.
The number of consolidated subsidiaries at September 30, 2001 stood at 89, an increase of five from the previous fiscal year-end. The number of affiliates accounted for by the equity method was 36, a decrease of eight from the previous fiscal year-end.

Non-consolidated basis:

Sales decreased for the first time in seven years; profit declined after an interval of three years
Non-consolidated net sales declined 5.7 percent from the same period of the previous year, to 272.7yen billion. The decline was largely attributable to the fact that motorcycle sales decreased 10.9 percent, while sales in the IM business dropped 46.3 percent -although sales of marine products, power products and automobile engines increased.
In terms of profit, operating income decreased 8.9 percent, to 2.9 yen billion, and ordinary income decreased 14.9 percent, to 6.3 yen billion, resulting from a 8.3 yen billion decline in profit, due to the change in product lines and other factors, and a 2.5 yen billion increase in selling, general and administrative expenses. These declines came about despite a 7.8 yen billion gain from currency translation into yen, reflecting the weaker yen, and a 2.7 yen billion decrease in cost of sales. Net income for the period decreased 51.4 percent, to 1.9 yen billion, due mainly to an increase in extraordinary losses.

It is expected that the Company will face an increasingly demanding management environment in future, reflecting such negative factors as the terrorist attacks in the U.S. and the slump in the world economy triggered by sluggish IT businesses. Based on the Company's three-year medium-term management plan, initiated in April 1999, the Company has been promoting various structural reforms, aiming at consolidated sales of one trillion yen and a five percent ratio of ordinary income to net sales, even at an exchange rate of 100 yen to the U.S. dollar (and euro). As a result, consolidated net sales have registered record highs for several consecutive years, bringing the target of one trillion yen into sight. However, Yamaha Motor recognizes that the Company is still only halfway to its structural reform goals, since profitability remains below targets established in the plan.
Against this backdrop, the Company is determined to transform its management policy into a model based on corporate value. It is a style of management which places greater emphasis on "a new, result-oriented value system." Based on the new management policy, the Company will implement profit- and efficiency-oriented corporate reform; cost-conscious operational reform; a drive to boost market competitiveness in the motorcycle business in Asia; structural reform for domestic sales operations; and research and development of new technologies and businesses for the Company's future growth. Thus, the Company aims to attain the numerical management targets provided in the new three-year medium-term management plan, scheduled to start April 1, 2002.

Promoting profit-oriented reform in motorcycle and boat businesses
Since October 2001, in the move to improve profitability, the Company has established a system supplier structure for its motorcycle parts production in Japan. Under this new system supplier structure, parts are developed, manufactured and purchased by system (unit). At the same time, the Company has been shifting production of scooters for the domestic market to its subsidiaries in Taiwan. These moves are part of a drive for manufacturing innovation, through which the Company aims to realize a 30 percent production cost reduction. Furthermore, the Company will promote SCM innovation in conjunction with the manufacturing innovation, to create group-wide cash flow by reducing inventories and trade notes and accounts receivable. Meanwhile in the boat business, the Company has been striving to break out of its loss-generating operational structure by integrating three domestic factories into two and streamlining development, sales and management operations.

Implementing structural reform for sales operations in Japan
The Company will implement structural reform aimed at giving its domestic sales subsidiary, Yamaha Motor Marketing Japan Co., Ltd. (YMMJ), complete autonomy for all functions related to domestic marketing, including development and sales of new items other than those of the Yamaha Motor brand, in addition to Yamaha Motor products. Moreover, the Company will transfer its other domestic sales subsidiaries to YMMJ, in order to establish a Japan Headquarters with YMMJ as its core, during 2002. By optimizing management resources in this way, the Company aims to stimulate and maintain growth in domestic sales operations that have been in the doldrums.

The Company forecasts its consolidated business results for fiscal 2002, ending March 31, 2002 as follows: net sales of 920 yen billion; operating income of 31 yen billion; ordinary income of 29 yen billion, and net income of 9 yen billion. The non-consolidated business results forecast for fiscal 2002 are: net sales of 540 yen billion; operating income of 7 yen billion; ordinary income of 12 yen billion; and net income of 4 yen billion. These business performance forecasts are based on the assumption that one U.S. dollar will trade at 119 yen over the period (a 12 yen depreciation from the previous fiscal year), and that one euro will equal 107 yen (a 10 yen depreciation).

Financial Results for the First Half-Year Ended September 30, 2001