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Yamaha Motor to Establish Motorcycle Parts Manufacturing Subsidiary in Vietnam - Engine parts manufacturing company to serve ASEAN regions showing strong motorcycle sales -

January. 11 2005

Yamaha Motor Co., Ltd. has announced that it will establish a new company in Hanoi, Vietnam, to produce engine parts for motorcycles. The Vietnamese government granted approval for the company's establishment on January 4, 2005. Construction will begin in February 2005, and operations are scheduled to begin in January 2006.

The new company, called Yamaha Motor Parts Manufacturing Vietnam Co., Ltd. (YPMV), will be capitalized at US$14.3 million (approx. 1.5 billion yen), and will be a 100% subsidiary of Yamaha Motor Co., Ltd. A new plant, with a total building area of 20,400m2, will be constructed on a site measuring 100,000m2. The plant is expected to have an annual production capacity of one million die-cast motorcycle engine parts, including cylinder heads, and 900,000 steel parts, such as gears and transmissions. When the company is first established, it will have 540 employees, and the business plan for the first year of operations calls for sales of US$20 million (2.1 billion yen).

Cylinder heads, cylinder bodies, and other aluminum die-cast engine parts will be supplied to Yamaha Motor Vietnam Co., Ltd. (YMVN; President: Takahiko Takeda; location: Hanoi), Yamaha Motor's motorcycle production and sales base in Vietnam, and will also be exported to Japan. Transmissions, gears, and other steel parts will be supplied to Yamaha Motor Vietnam.

Yamaha Motor made the decision to establish Yamaha Motor Parts Manufacturing Vietnam in response to the dramatic increase in motorcycle production at Yamaha Motor Vietnam, as well as the increased production of die-cast parts within Japan. This will be the third die-cast parts manufacturing company to be established by Yamaha Motor in Asia, as two similar operations are already in place in Indonesia and Thailand. By establishing this new company in Vietnam, however, YMC will ensure a rapid and stable supply of high-quality, internationally competitive die-cast parts to both Vietnam and Japan.

Outline of the New Company

Name: Yamaha Motor Parts Manufacturing Vietnam Co., Ltd. (YPMV)
Location: Thang Long Industrial Park, Hanoi, Vietnam
Approval for establishment: January 2005
Start of operations: January 2006
President: Takahiko Takeda
Capitalization: US$14.3 million (approx. 1.5 billion yen)
Investment ratio: Yamaha Motor Co., Ltd.: 100%
Total land area: 100,000m2 (Building area: 20,400m2)
Outline of Business Operations: Die-casting, forging, and processing of motorcycle engine parts
Employees: 540 at time of establishment; 725 after 3 yrs.
Production capacity: Die-cast engine parts for motorcycles: one million units/yr.
Transmissions: 400,000 sets/yr.
Primary gear driven / Primary gear drive: 500,000 units/yr.
Projected sales: 1st year: approx. US$20 million; after 5 years: approx. US$31 million

Outline of Yamaha Motor Vietnam

Name: Yamaha Motor Vietnam Co., Ltd. (YMVN)
Location: Hanoi, Vietnam
Established: February 1998
President: Takahiko Takeda
Capitalization: US$24.25 million
Investment ratio: Yamaha Motor Co., Ltd.: 46%; VinaFor: 30%;
Hong Leong Industries Berhad
Outline of Business Operations: Manufacture and sales of motorcycles Employees: 1,862
(as of Nov. 31, 2004)
Sales / Sales Volumes: Sales: US$159.77 million; Sales Volume; 120,000 units (in 2003)
Sales: US$94.1 million; Sales Volume; 67,000 units (in 2002)

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