New Sales System for Motorcycles and Other Land Vehicles in Japan

Newly Formed Land Vehicle Subsidiary Commences Operations

On September 22, 2006, Yamaha Motor Co., Ltd. (the "Company") announced its plan to establish a new company dedicated to the sales of land vehicles -- mainly motorcycles and electro-hybrid bicycles -- in Japan, in line with the ongoing divestitures and mergers of its group companies. In advance of the start of operations, the Company would like to present more details about the new company.

YMSJ Co., Ltd., originally established on September 1, 2006 to facilitate the transfer of business, will start its operations as a new company on January 1, 2007, under the name Yamaha Motorcycle Sales Japan Co., Ltd.

The paid-in capital of Yamaha Motor Marketing Japan will be increased from the initial 10 million yen at the time of establishment to 490 million yen. Mr. Mitsuaki Matsuo will take office as president of the new company, scheduled to have some 350 employees.

Yamaha Motor Marketing Japan will have its headquarters in Iwata City, Shizuoka Prefecture. Based on results of a review of the existing sales system, it will operate seven sales offices -- Hokkaido, Tohoku, Northern Kanto, Kanto, Chubu, Western Japan and Kyushu -- and two services centers, in Kanto and Western Japan. Each sales office will have a product sales, parts sales, and service operations section, in order to operate effectively in these three key business areas. The organization boasts a flatter structure with fewer hierarchical levels, enabling a quicker response to customer feedback and changing market trends, thus improving the quality of sales and services.

The demand for motorcycles in Japan has remained flat, due mainly to an increased diversity of hobbies among young people and a decrease in the number of children in the population. On the other hand, deregulation -- such as last year's lifting of the ban on tandem riding on expressways and the introduction of a motorcycle license for automatic models -- has produced favorable signs for motorcycles sales. One is an increase in the number of females obtaining motorcycle licenses. Another is the growing population of so-called "return riders" -- middle-aged former motorcyclists re-emerging as active riders. Thus, motorcycles have begun to attract attention once again as a hobby. Yamaha Motor Marketing Japan plans to expand the lineup of large sports models while promoting environmentally friendly electric vehicles that contribute less to global warming. The new company aims to achieve net sales of 60 billion yen in its first year (2007), and 65 billion yen after three years (in 2010).

Sales operations for marine products, such as boats and outboard motors, and golf cars -- both previously conducted by a domestic sales subsidiary -- will be transferred to the Company. Meanwhile, sales of multi-purpose engines, centering on generators, will be transferred to Yamaha Motor Powered Products Co., Ltd., and the sales business for mobile phones will switch to YS Co., Ltd., in order to hone the competitive edge in each business segment.

Profile of Yamaha Motor Marketing Japan Co., Ltd.