President Message

Message from the management of Yamaha Motor

Regarding the Third Quarter Business Results and Recent Corporate Improprieties

Dear Employees

We have announced the business results for the first nine months of 2017 (January - September). Figures shown in brackets indicate the increases or decreases on the previous year. The consolidated management accounts were net sales of 1,250.7 billion yen (an increase of 117.9 billion yen or 10%), and operating income of 120.8 billion yen (an increase of 31.9 billion yen or 36%). The headquarter unit accounts were net sales of 506.9 billion yen (an increase of 53.2 billion yen or 12%), and operating income of 37.4 billion yen (an increase of 21.3 billion yen or 133%). Foreign currencies in developed markets saw the U.S. dollar trading at 112 yen (a depreciation of 3 yen from the previous fiscal year) and the euro at 125 yen (a depreciation of 4 yen from the previous fiscal year). Currencies of emerging markets continued their mostly stable situation.

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I will focus on two segments to highlight the improvement in consolidated operating income. 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 operating income of 54.0 billion yen (an increase of 21.4 billion yen or 66%).

Secondly, profitability improvements proceeded in developed markets businesses such as IM, motorcycles, and SPV, but were mitigated by the effect of unrealized income in the marine business and the effects of inventory adjustment in the RV business, leading to an operating income of 66.9 billion yen (an increase of 10.5 billion yen or 19%). However, the effect of this unrealized income was almost completely resolved in the second quarter, and inventory adjustment and new model launches in the RV business are progressing on schedule.

The annual forecast for the consolidated management accounts is net sales of 1,630.0 billion yen (an increase of 127.2 billion yen or 8%), and operating income of 140.0 billion yen (an increase of 31.4 billion yen or 29%). The forecast business results for the fourth quarter are based on the U.S. dollar at 110 yen, and the euro at 130 yen. This forecast exceeds the 2007 operating income of 135.7 billion yen (following the sales finance business reclassification) to become our highest-ever income level. If we all operate our businesses and departments as per the revised budget, this level is very much achievable. Please work to achieve the targets for this fiscal year and link them to further achievements next year.

I must now move on to a different topic. Examples such as the automaker fuel economy scandals (which came to light in 2015) and the recently-discovered automaker quality inspection improprieties and steelmaker quality data falsification have shown how legal and regulatory compliance violations become major issues for society. As someone working in the manufacturing industry, after an initial reaction of “how could this happen?”, I also feel that it is very disappointing. At the same time, as we are working in the same industry, and because we have purchased the materials whose data was falsified, I believe that these issues are placed squarely at our feet, and we cannot simply dismiss them as someone else’s problem. Incidentally, please rest assured that we have confirmed that our fuel economy measurement and completion inspection work is being carried out correctly.

From my experience in production departments, I feel that Yamaha Motor has a company culture of fully following the rules. I would like you to strive to make continuous improvements to work sites and products while tenaciously and honestly maintaining this culture. Moreover, as a company we suffered significant damage from the 2006 unmanned helicopter incident (violation of security trade control), and I believe we have maintained a high sensitivity to legal compliance etc. However, while we have not committed any deliberate (or willful) and organizational violations, there are examples of misinterpretation of rules, lack of thoroughness, and mistakes in work which have ultimately led to violations. This requires thought regarding improvement across a wide range of work.

As we work in the manufacturing industry, we are obliged to maintain many facets of legal and regulatory compliance, including labor, environment, safety and health, product safety and quality assurance, security trade control, inter-company transactions, and accounting. Taking these obligations lightly, deliberate violations, or concealing problems is not permitted. It is important to create an organizational culture which values high moral standards in carrying out our obligations, being able to consult others easily when not sure or confused, taking proactive initiatives towards honestly reporting and rectifying mistakes (which will happen, as we are all human), having the courage to caution and report when uncomfortable about what is going on around us, and enabling open communication.

I want Yamaha Motor to be a company rich in uniqueness, but also proud of its integrity and high moral standards. I hope that you find such opportunities in your work and the work of the people around you.




Hiroyuki Yanagi

IM :Intelligent Machinery
SPV :Smart Power Vehicle
RV :Recreational Vehicle