Establishment of a Parts Development and Supply Center in China, and the China Headquarters Plan -China Strategy in Line with New Medium-term Management Plan "NEXT 50"-

Yamaha Motor Co., Ltd. is currently moving forward with a plan to establish a new company in the Suzhou Industrial Park in Jiangsu Province, China, which will be responsible for parts development in China, and will serve as the parts supply center for Yamaha Motor plants the world over. The new company - Yamaha Motor (Suzhou) Co., Ltd. - is scheduled to start operations in July 2002.

Yamaha Motor Suzhou will be a wholly owned subsidiary of Yamaha Motor, which will provide the entire 30 million yuan (about 480 million yen) to capitalize the venture. In business terms, the new subsidiary will function:

In establishing the subsidiary, Yamaha Motor aims to further enhance product competitiveness by expediting cost reduction in plants in Japan and overseas, while supporting rapid development of new models that respond to changing market trends in China.

During the course of the new three-year Medium-term Management Plan, Yamaha Motor will reduce costs by actively employing Chinese-made parts, while restructuring the foundation of its operations in China to expand motorcycle sales in the local market. The new company is being established as part of these efforts.

In restructuring the operational foundation in China, Yamaha Motor will review both production and sales systems. The company seeks to optimize its production system in China by reviewing and strengthening existing joint ventures (Chongqing Jianshe-Yamaha Motor, Zhuzhou Nanfang Yamaha Motor, and Jiangsu Linhai Yamaha Motor), as well as by examining the possibility of establishing joint ventures with private local companies.
Yamaha Motor's review of the existing sales system comes in the wake of China's entry into the World Trade Organization (WTO), which is expected to further expedite that nation's market opening, facilitating complete built-up motorcycle import, among other opportunities. Therefore, the company plans to modify the sales system to cover all of China more efficiently.
For fields other than motorcycles, such as marine products and power products, Yamaha Motor will look into the possibility of establishing a China Headquarters to enable autonomous management in the region, expand sales for each business and exploit new business areas.