President Message

Message from the management of Yamaha Motor

Regarding the FY 2017 First Quarter Business Results

Dear Employees

We have announced the business results for the first quarter (January - March).

The consolidated management accounts were net sales of 386.0 billion yen (an increase of 3.1 billion yen over the previous year and 10.9 billion above the announced budget), and operating income of 37.3 billion yen (an increase of 5.0 billion yen over the previous year and 13.1 billion yen above the announced budget). The headquarter unit accounts were net sales of 163.1 billion yen (an decrease of 3.7 billion yen over the previous year and 1.1 billion yen below the announced budget), and operating income of 12.7 billion yen (an increase of 4.6 billion yen over the previous year and 0.7 billion yen above the announced budget).

Foreign currencies in developed markets saw the yen appreciate, with the U.S. dollar trading at 114 yen and the euro at 121 yen; this represented an appreciation of 1 yen and 6 yen respectively compared with the previous fiscal year, though a depreciation of 4 yen and 6 yen respectively compared with the announced budget. Currencies of emerging markets such as the Indonesian rupiah and the Brazilian real continued their mostly stable situation since the second half of last year.

I will explain about two factors which led the consolidated operating income to increase by 5.0 billion yen compared with the same period in the previous fiscal year.

Firstly, regarding the motorcycle business in emerging markets, increased sales scale and profitability improvements continued in Vietnam, Thailand, and the Philippines, and together with other factors such as further structural reform in Brazil, led to an increase of 7.4 billion yen.

Secondly, in the developed markets business, profitability improvements of 4.0 billion yen continued in the marine, motorcycles, IM, and SPV businesses etc., but the remaining effects of the appreciating yen, unrealized income, etc. led to an overall decrease of 2.4 billion yen.

However, the appreciating yen and unrealized income are temporary effects, and we forecast that they will diminish from the second quarter onwards. In addition, inventory adjustments in the RV business are progressing as planned.

As developed-market and emerging-market exchange rates are relatively stable, product mix and pricing improvements, cost reductions through development methods such as for platform and global models and manufacturing methods such as for theoretical-value-based production have led to steady progress in profitability improvements for each business.

We must however reflect that shipment stoppages due to quality issues and delays in production commencement for new models are occurring frequently. For motorcycles and outboard motors, the rate of adhering to global production commencement is only 50%, and the number of units affected by headquarter production shipment stoppages exceeded 150,000. As well as seriously inconveniencing customers who are awaiting new models, these issues have resulted in decreased income due to lost opportunities, to the extent of a more than 1.0 billion yen reduction in consolidated operating income. From the second quarter onwards, I would like us to firstly deliver products as and when customers expect them, and be even more thorough with our “WATASHI GA YAMAHA” initiatives.

In the first quarter, progress was made in improving our headquarter business structure.

The first is the relocation of the IM business central office. The previous office faced growth constraints due to being in a residential area, as well as suffering poor logistics efficiency. The office has therefore been relocated to a spacious, purpose-built building with a total floor area of 52,000m2 in Kita Ward, Hamamatsu City. The aim of this move is to achieve increased business efficiency by bringing development, production, and sales together, as well as increased productivity etc. through theoretical-value-based production. Currently, equipment investment demand in the Chinese market is recovering, and we have achieved our highest-ever level of orders in both surface mounters and robots. In addition to market size-dependent effects, we aim for this business to achieve high-efficiency model management.

The second is the construction of the new Innovation Center. There was a sense that the previous design building had reached the limits of its functionality, so we took the decision to construct a new building with a total floor area of 8,600m2 to serve as the Design Division offices. The team members involved in planning, design, and development etc. for each project are clustered there, and the open-plan interior layout and latest infrastructure are part of a design which aims to create an environment encouraging continued free thinking and challenging the boundaries of innovation. As a platform for achieving Monozukuri (engineering, manufacturing and marketing) which embodies the unique style of Yamaha, and for creating "Hatsu", "Etsu", "Shin", "Mi", "Ketsu," we are looking forward to a wide variety of results from this new facility.

2017 will represent the mid-point of the current Medium-term Management Plan. Please check the progress of the initiatives in each division, and consider whether the planned results for 2018 can be achieved. While foreign exchange conditions and total demand in some markets have diverged from the initial plan, please take the following as your points of reference.

(1) Earning power and financial power

Based on a realistic sales scale, achieving financial resilience built on an operating income ratio of the 9% level and an ROE of the 15% level as per the initial plan.

(2) Brand strength

Sharing passion for the Yamaha brand and advancing standardized initiatives to produce visible changes in brand power in each market.

(3) Product competitiveness

Launching 280 new models over three years to achieve QDC as per the plan. In addition, seven-step marketing to build ties with customers is conducted for each model to achieve sales as per the plan.

(4) Growth strategies

The search for new business opportunities and developing foundational technology progress, giving concrete form to a plan which “turns seeds into sprouts” before the next Medium-term Management Plan begins.

(5) Organization and human resources

Programs for global human resource development and organization vitalization advance, and their results become visible. As part of this, diversity and the advancement of women will become prominent.




Hiroyuki Yanagi

IM :Intelligent Machinery
SPV :Smart Power Vehicle