President Message

Message from the management of Yamaha Motor

Aiming to become a unique company that continues to achieve dynamic milestones

2016 is the year that we begin our new medium-term management plan. I would like to take this opportunity to outline the plan for employees at all Group companies.

Brand Values

Beginning in 2013, the brand slogan "Revs your Heart" has been adopted by all Group companies for initiatives to realize our ideal of "creating exceptional value and experiences that enrich the lives of everyone worldwide who deals with Yamaha." In 2016 and beyond, holding on to the ideals and passion encapsulated within "Revs your Heart," we will work towards our greatest company management goal?further improving the value of the Yamaha brand, and making it truly shine. In addition, we aim to observe, survey, and analyze our company initiatives in the marketplace to determine how they are impacting our brand value, and then reflect that information in our company initiatives.

Company Management View

For the three years beginning in 2016, and as part of our long-term vision looking beyond 2020, we will continue working to become "a unique company that continues to achieve dynamic milestones." As the first three years of our long-term vision, the medium-term management plan is positioned to reliably achieve greater corporate strength, and as a stage to firmly lay the groundwork for even more dynamic milestones. Corporate strength refers to overall strength through means such as scale of sales, earning power, financial power, technological capabilities and strength in the field. Moreover, while thinking carefully about the unique style of Yamaha and how to develop it, we consider it important to show our distinctiveness as well.

Summary of Previous Medium-term Management Plan

I will summarize the results of the previous medium-term management plan below, beginning with the major changes in corporate results indicators (comparison between 2012 and 2015).

  • The growth rate for net sales was 137% (119% excluding exchange-rate effects in developed markets). This was above the average level for Japanese automakers, which was 130%.
  • The number of units from core production was 6,139,000 (down 609,000). While production of motorcycles declined in China and ASEAN, net sales rose due to motorcycle business recovery in developed markets and increased sales of high-value motorcycle products in emerging markets.
  • Market share of in our main markets was 16.4% (up 4.0) for motorcycles in developed markets, 26.8% (down 3.3) for motorcycles in the ASEAN market, 3.6% (up 1.2) for motorcycles in India, 39.1% (down 2.8) for outboard motors, and 6.5% (up 3.2) for ROVs.
  • Our primary financial indicators continued to improve, including return on equity of 12.4% (up 9.5), equity ratio of 38.5% (up 6.5), and net income per share of 169 yen (up 148 yen).
  • We achieved our target in market capitalization reaching the one trillion yen level. The rate of increase of 315% was above the market average of 200%.

The primary issues raised by the above results are achieving expansion based on solid trends in developed markets, as well as continuing to shift to high-value products in emerging markets, continuing the recovery of the ASEAN motorcycle market, and strengthening our positions in the Indian motorcycle market, ROV business, etc.

Direction of the Current Medium-term Management Plan

Up until 2015, we saw solid business conditions and the recovery of demand in developed markets. Emerging markets saw declining conditions and market slumps due to cheap resources and weak currencies, etc. In such a business environment, we have been working towards increasing corporate value through sustained growth. As the business environment in 2016 is expected to continue as it did in 2015, we will work towards ensuring stable income and advancing investment for new growth. We also expect that 2018 will see business conditions remain solid in developed markets and the beginnings of recovery in some emerging markets. We will create business management that will move us towards the beginnings of new growth, beginning from a level of two trillion yen in net sales and an operating income ratio of 10%.

The Shape of 2018

For 2018, our targets for net sales and operating income are two trillion yen and 180.0 billion yen (9%), respectively. Compared to 2015 forecasts, this is up 350.0 billion yen (up 21%) for net sales and up 55.0 billion yen (up 44%) in operating income.

In the developed markets where business conditions have remained solid, we will increase profitability by making our brand stand out, advancing planned structural reforms, and increasing business efficiency (reducing stock held, etc.) With regards to volume in emerging markets, where business slumps and financial uncertainty look set to continue, while we are aiming for a certain level of recovery in Indonesia and Vietnam and expansion into India, generally we are aiming for targets that can be reached without unreasonable amounts of effort. Under those assumptions, we hope to increase profitability by further advancing platform development and cost reduction, restricting capital expenditure and increasing business efficiency (reducing inventory held, etc.).

This is a summary of our main business. Our aims for the motorcycle business include reforming the business structure to focus on high-efficiency models without pursuing scale of quantity, and achieving net sales of 1.3 trillion yen and operating income of 74.0 billion yen. Our aims for the marine products business is, as our business model for further growth, net sales of 340.0 billion yen and an operating income ratio of 20% or more. Our aims for our vehicles & solutions business are net sales of 360.0 billion yen and an operating income ratio of 10% or more. Within that, we are aiming for our RV operations to become our third core business, following motorcycles and marine. In these and other business units, please advance your plans steadily and reliably.

Financial Strategies towards 2018

First, by increasing the earning power of our existing business, we will create a stable financial platform. Next, through this stable financial platform, we will increase new-growth investment, finance business funding, and stock dividends. These points are the core of our efforts to establish both stability and growth.

Below are four capital policies that we will pursue within this financial strategy framework.

  • In terms of investment, a total of 240.0 billion yen will be invested. We will optimize existing businesses and level off our investment in them (180.0 billion yen), creating a framework for new growth strategies (60.0 billion yen).
  • For research and development, a total of 350.0 billion yen will be invested. While optimizing existing business (280.0 billion yen), we will create a framework for new growth strategies (70.0 billion yen).
  • With regards to finance business, building upon the base construction we have advanced to date (receivables balance of 230.0 billion yen), we will carry out business expansion towards 2018, targeting a receivables balance of 320.0 billion yen. This is at the core of promoting and supporting our existing business.
  • Regarding stock dividends, we will raise them from the lower limit of 20% of our previous payout ratio (the ratio of income for the period that is paid out as dividends) to a guideline of 30%.

Product Competitiveness

High product competitiveness is the root of business competitiveness. In our last medium-term plan period (2013-2015), Yamaha Motor's product competitiveness multiplied compared to the period (2010-2012) as 250 different models were developed and released. In this new period, as we enhance our product marketability, cost competitiveness and product quality, we plan to develop and release 270 different models.

  • Product marketability: We will make our Monozukuri philosophy come to life through the creation of new products based on the five ideals of “GEN” (new concepts and communications), “Play & Sure” (technology that creates exhilaration and trust amongst customers), “S-EX-Y” (expressing refined dynamism, forms, texture and fascination), “Ties” (the power to build a strong team and strong ties with customers). We look forward to producing a stream of new products in all areas of our business to show off the uniqueness of our brand identity.
  • Cost competitiveness: During the previous period, we achieved net cost reductions of 42.5 billion yen, which helped us take the first step towards a stable financial platform. During this period, we are aiming for net cost reductions of 60.0 billion yen. We will be taking comprehensive initiatives covering procurement, manufacturing and logistics. Please further enhance and implement the cost-reduction methods that have been devised up until now.
  • Quality: In 2015 we were unable to achieve our target for market complaint expenses of 0.5% (net sales ratio). Instead, the rate was 0.67%. Quality is the part of our brand value we want customers to feel immediately and above all. Through our “I am Yamaha” initiative, we are working to understand the market environment and the actual state of product use, carry out appropriate development, evaluation, and production preparation, and improve our capacity to sense changes and abnormalities in our everyday work.

Global Management

90% of our consolidated net sales are outside of Japan. Further, 90% of our core-production units were made in countries and regions outside of Japan. We hope to maintain this level going forward. Moreover, in terms of product development, the initial technological development and basic the platform development are carried out in Japan, while the development of models adapted for specific markets is carried out in each market’s region. Specifically, 30?40% of the development workload for MC/RV/WV, etc. is now carried out in each market. This is at the core of our aim to provide products that are optimized for markets quickly, safely and timely. Additionally, we hope to expand our global-model development concept. For example, we envision that products systematically developed for the global market will be assembled in ASEAN countries and then exported for sale in markets worldwide.

These instances suggest that corporate and business management from a global perspective are becoming more and more important. More than ever before, we will work hard on corporate governance and developing global personnel. In particular, regarding development of global personnel, while we are making the most of global training programs, we are appointing local talent to 60% of core positions (executive class) in our overseas locations. Moreover, within our head office, we are proactively pursuing diversity through the appointment of overseas executive staffers, increasing the hiring of overseas staffers and female managerial staffers, as well as offering more options for work styles, etc.

3 Business Fields/4 Growth Strategies

In 2010, we identified three strategic business fields?“fulfilling lifestyles,” “enjoyment in personal mobility” and “innovative technologies that harmonize with people, the Earth and society.” For these fields, we now have developed four new growth strategies for the future:

  • The Growing World of Personal Mobility
    We will improve and widen the scope of two/three/four-wheeled vehicles and their technology, and by doing so broaden our customer base. We will challenge ourselves to create PAS, EV, CV, MC, LMW, RV, and C4W (compact four-wheelers), unique vehicles based on the unique style of Yamaha.
  • Competing in the 3-trillion-yen global marine market
    Aiming to be more than simply an engine supplier, we will add peripheral equipment and develop our hull strategy as a system supplier rolling out operations across the marine products business. We will continue to be a firmly global No. 1 brand.
  • Solutions Business
    We must continue to grow the IM, UMS, Pool Businesses, etc., and build unique business models based on that growth. By combining the technology within Yamaha and specialized knowledge from outside, we will take on genres that provide new value in the fields of industry, agriculture, daily life, infrastructure, etc.
  • Developing Foundational Technology
    Yamaha already has the elemental technology for power sources, vehicle bodies/hulls/aircraft bodies, control/information, materials/production, etc. While continuing to improve these elemental technologies even further, we will innovative creative new combinations.

This is our new medium-term management plan. Over the three years from 2016, and then beyond 2020, we will strive to create an environment that fosters a can-do attitude for everyone within our Group companies. We hope that within that environment, everyone will make their voices heard, communicate, consider all possibilities, plan and implement ideas, and work to achieve results. So, let’s take the next three years as an opportunity to grow individually and as a company producing real results. 2016 is the year in which this all begins.

*Announced on January 6

MC: Motorcycle
RV: Recreational Vehicle
WV: Water Vehicle
PAS: Electrically Power Assisted Bicycle
EV: Electric Vehicle
CV: Commuter Vehicle
LMW: Leaning Multi Wheel
IM: Intelligent Machinery
UMS: Unmanned System