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Summary of Business Results for the First Half of the Fiscal Year Ending December 31, 2008

July 31, 2008

Consolidated business results

Yamaha Motor Co., Ltd. (the "Company") announced its consolidated business results for the first half-year ended June 30, 2008. Net sales decreased 6.6 percent from the same period of the previous year, to 869.1 billion yen, operating income fell 35.3 percent, to 46.7 billion yen, ordinary income declined 32.9%, to 51.2 billion yen, and net income reduced 47.9%, to 25.9 billion yen.

On the foreign exchange front, the average purchasing value of the yen against the U.S. dollar during the period under review appreciated by ten yen from the same period of the previous year, to 106 yen, and depreciated by eight yen against the euro, to 160 yen.

Broken down by business segment, motorcycle sales decreased 1.1 percent from the same period of previous year, to 561.9 billion yen, due to reduced sales in Europe, the United States and Japan, although sales in Asia including Indonesia, Thailand and Vietnam, and in Latin America including Brazil were favorable. Marine product sales declined 13.1 percent, to 143.2 billion yen, reflecting sluggish outboard motor and personal watercraft sales in the United States. Nevertheless, outboard motor sales in Asia (excluding Japan) and Latin America expanded substantially. Power product sales fell 21.5 percent, to 97.5 billion yen, due to a sales decline for all-terrain vehicles and other products in the United States. Sales in the "other products" segment dropped 9.5 percent, to 66.4 billion yen, in line with lower sales, especially for surface mounters.

Meanwhile, operating income decreased 14.7 percent, to 29.2 billion yen in the motorcycle segment; 46.3 percent, to 10.9 billion yen in the marine product segment; 70.1 percent, to 3.2 billion yen in the power product segment; and 50.8 percent, to 3.4 billion yen in the "other products" segment.

Positive factors affecting operating income include a decrease in selling, general and administrative expenses totaling 8.5 billion yen; cost reductions in purchasing operations totaling 4.4 billion yen; and a drop in research and development expenses totaling 0.6 billion yen. However, these positive factors were more than offset by the negative impact of fluctuations in foreign currency translation rates totaling 15.0 billion yen; hikes in raw material prices totaling 3.4 billion yen; an increase in depreciation expenses totaling 2.4 billion yen; a decline in gross profit due to decreased net sales totaling 1.5 billion yen; and the impact of a change in the product mix and related factors totaling 16.6 billion yen. As a result, operating income for the first half-year under review decreased from the same period of the previous year.

During the period under review, the Company added Yamaha Motor Argentina S.A. to its group of consolidated subsidiaries. This and other changes increased the number of consolidated subsidiaries by one from December 31, 2007, to 112 on June 30, 2008, while the number of companies accounted for by the equity method decreased by four, to 34.

Forecast business results for the full fiscal year

The Company has revised its forecast consolidated business results for the full fiscal year ending December 31, 2008, and now projects net sales of 1,720.0 billion yen (planned target of 1,830.0 billion yen announced on February 5, 2008; 1,756.7 billion yen in the fiscal year ended December 31, 2007 (fiscal 2007)); operating income of 78.0 billion yen (planned target of 103.0 billion yen; 127.0 billion yen in fiscal 2007); ordinary income of 92.0 billion yen (planned target of 110.0 billion yen; 140.3 billion yen in fiscal 2007); and net income of 45.0 billion yen (planned target of 59.0 billion yen; 71.2 billion yen in fiscal 2007).

These forecasts are based on the assumption that the U.S. dollar will trade at 105 yen during the period (an appreciation of 12 yen from fiscal 2007), and the euro at 158 yen (a depreciation of two yen from fiscal 2007).


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