Yamaha Motor to Establish 2nd Motorcycle Manufacturing Company in Indonesia

Yamaha Motor Co., Ltd. has announced that it will establish a new motorcycle manufacturing company in Karawang, West Java, Indonesia, to respond to the dramatic increase in demand for motorcycles in that country. This will be Yamaha Motor’s second motorcycle manufacturing base in Indonesia; P. T. Yamaha Indonesia Motor Manufacturing (YIMM) currently manufactures and sells motorcycles in the capital city of Jakarta.

The new company, to be called P.T. Yamaha Motor Manufacturing West Java (YMMWJ), will be capitalized at US$14.7 million (approx. 1.55 billion yen), and will be a 100% subsidiary of YIMM. The new company will have a plant in the Karawang Industrial District, located 47 km southeast of Jakarta. At the time of establishment, it will have 700 employees, and will have a total land area of 300,000m² and a building area of 54,000m². Its annual production capacity will be 300,000 units at the start of operations in January 2006, the investment value is projected at about US$66.85 million (approx. 7.1 billion yen). But this production scale is expected to increase to 600,000 units per year by 2007.
The unique feature of the new plant will be its positioning as a specialized plant for the production of moped-type motorcycles, and its ability to pursue merits of scale through the large-volume production of these models. At the same time, it will minimize stock and ensure maximum efficiency in the use of space through complete synchronization of parts production and completed vehicle assembly, thus eliminating management losses and increasing productivity.

The motorcycle market in Indonesia is the third largest in the world, surpassed only by China and India. Supported by political stability and economic growth, total demand for motorcycles is expected to reach about 4 million units in 2004, a substantial increase of 36% compared to the previous year. In the midst of this favorable market environment, Yamaha Motor has demonstrated strong performance in terms of sales volumes, particularly in sales of 4-stroke models such as the Jupiter-Z and VEGA-R. Sales volumes are expected to increase by 54% in 2004 to 880,000 units, and to grow even further in the future, reaching the 1.2 million unit mark in 2005.

Given these expanded sales volumes, in order to ensure a stable supply to the market, motorcycle production capacity at YIMM in Jakarta will be increased from the current 880,000 units to 1.2 million units by 2005; at the same time, land will be purchased in the city of Karawang, and the new company will be established with a production capacity of about 600,000 units. The combined annual production capacity for the two plants at YIMM and YMMWJ will thus be increased to 1.8 million units, representing Yamaha Motor’s largest production scale in the world. In the future, the two companies will promote the introduction of common parts and the efficient allocation of production models, in order to strengthen the overall production system and to contribute to the further development of the motorcycle industry in Indonesia.