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Yamaha Restructures with ’09 Losses

Friday, February 19, 2010
The release of its year-end financial summary shows Yamaha felt the sting in 2009, just like the rest of the motorcycle industry. Now the world’s second-largest motorcycle maker reveals plans for turning things around in 2010 and beyond, including restructuring and job cuts.
Yamaha Motorcycles

2009 Yamaha Results

Consolidated 2009 net sales for Yamaha were 1,15 trillion yen, with an operating net loss of 216.1 billion yen. These numbers reflect a 450.2 billion decrease in total net sales (28.1%). All told the motorcycle segment tallied a 4.2 billion yen operating loss, down 37.8 billion from the year prior, as worldwide sales dropped 20.6%.

Sales declines in North America (45.9% - from 107,123 to 57,979 units) and Europe (33.2%) were more precipitous. In its fiscal year summary Yamaha says of the drop in these markets: “This was mainly attributable to sluggish demand and the negative impact of the stronger yen, coupled with significant production cutbacks designed to reduce market stocks.”

Citing reduced demand from the recession in the US and Europe, as well as its domestic Japanese market, Yamaha notes that demand “recovered early” in critical Asian markets, like Vietnam and India.

Restructuring Plans

Yamaha announced expanded structural reforms to its manufacturing, with more closed plants and job cuts. From 2010-2012 the company will close seven factories total. Factories in Japan will reduce from 12 to seven. The closure of two overseas plants brings the non-domestic factory count from nine to seven.

Job cuts also expand from the previous announcement of 1700 positions, with an additional 1000 marked for reduction. Of those 800 positions in Japan are targeted in 2010 with voluntary retirement. The 200 remaining job losses will take place in Europe and the US.

Yamaha has also targeted cuts in executive pay. No bonuses will be meted out to executive officers or directors, monthly remuneration has also be further reduced (up from minimum 10% reduction in 2009 to at least 15% in 2010 – with auditors getting 20% cut up from 15% in 2009).

2010 Forecasts Return to Break Even

Yamaha does project a break even on net income for 2010. However, due to the sales drops, the annual production volume will decrease for motorcycles from 250,000 to 200,000. The ATV and UTV market production is lowered as well, from 140,000 to 100,000. And the Japanese marque paints a somber picture for improvement in the US and European market saying in its forecast for 2010:

“In fiscal 2010, motorcycle demand in Asia (excluding Japan) is expected to increase, while demand in Europe and the United States is not expected to recover for some time. Thus, sales conditions surrounding the Yamaha Motor Group are expected to remain harsh.”

Asian Expansion & Electric Development

Yamaha plans to focus its immediate efforts on expanding into the Asian market. It sets specific goals for China and India, the world’s two largest motorcycle markets, by increasing its ratio of low-priced models from 20% to 60% by 2012.

Yamaha also plans to increase the ratio of fuel-injected models from the current 3% to 50% by 2012, and 80% by 2015. It also seeks a 50% increase in fuel efficiency by 2015.

Another area of focused development is electric powered motorcycle technology. Yamaha specifically wants to increase its presence in “the growing electrical power assisted bicycle market.” Yamaha will use some of the 120 billion yen it plans to spend over the next three years in capital expenditures on “electric-drive technology development.”

A recent study by Pike Research forecasts 466 million electric PTW sales between 2010 and 2016. While the number seems staggering, it would seem Yamaha has identified the electric PTW as a key market in its recovery.
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Comments
Pat Gentry -customer  June 5, 2010 02:11 PM
I would like to request a 2005 vstar 650 custom manual book. My addres is 3340 wayside el paso tx 79936. thank you
Harry -Greed.  March 1, 2010 09:49 AM
Nice Bikes!!! but not the prices. Since when has a bike been as expensive as a small car? I love bikes but will never pay for one as long as the prices are insane. There are millions of people like me out here and we should stop buying bikes till the greedy bike co.'s excutives come to their down to earth senses. Now they are paying for it.
chuckkey -loaner  February 28, 2010 09:13 PM
bring back d fjrae d best bike eva made
Woodman -Price increase  February 25, 2010 05:28 AM
All the big bikes from Star, and the others, all seemed to go up about $1000 from 2009! Are they trying to drive folks away? I don't know anyone in the market for an $18K bike right now! Lots of smoking deals out there!!
Ryck -Lower the price  February 23, 2010 04:00 PM
In Economics 101 the rule of recession is prices go down. Why isn't anybody obeying basic economics? Seems the big manufacturers feel they are the exception to the economic rules. And why not? Especially now they know they can sell that they are "too beg to fail" and either get bailout money or tax concessions.

I think Yamaha can lead the way by simply lowering their prices at least 15%. That translates into happier dealerships, especially with new customers returning for what else to put on themselves and their new bikes. Not to mention busier mechanics servicing the maint on those new bikes.


Tik -Re engineered  February 22, 2010 04:50 AM
I hope Yamaha can prouduce more powerful bikes after this ^^
Woodman West -I agree on price  February 22, 2010 03:24 AM
I agree, the true value of something is what someone will pay for it, not what it cost to build.

2 points on Yamaha, they promised a new model in January, Stratoliner Deluxe. Still not out! Just buy a left over bike and add the fairing is what I keep hearing.

The Dealers keep saying "Yamaha always say that" Great, let me spend $17k for a bike from someone who lies to my face. Also, they have dropped the V Star 1100 line. The best selling Star. Hopeing to push the "neo" styling of the V1300 and V950. Folks are staying away in droves!!

Stop telling us what we want and sell us want we want.
Mcguire -sewer rat  February 22, 2010 02:03 AM
Oh by the way, any of you who are stressing that expensive trip to Sturgis should consider taking in an event at the Barber Motorsports park in Birmingham Ala. This place is a mecca for bikers. You will see Harleys parked next to Ducatis and all the owners talking and admiring each others bikes and the museum will make your jaw hit the floor. Great track too. They are negotiating for a Moto GP to be scheduled here also. Just like Sturgis with no alcohol (I had to quit sooner or later didn't I).
Mcguire -sewer rat  February 22, 2010 01:47 AM
Tough times. I work for the water dept an our sales are down (figure that?). Not many businesses can sustain a 40% drop in sales and survive. The big guys have a better chance because there will ccontinue to be strong sales in scooters and cheap bikes. Now those raceing bikes with lights that we all love so much have become a luxury. How many of us have justified purchasing one that has that high insurance and yeeeeh I can deal with it gas mileage. I bought an aprilia rsv1000 millie in January (a 2002 R model with 15000 miles) for 4500 dollars and its clean as a pin. Yesterday George Barber came out of his museum and talked to me and a police officer that was admiring my bike. He told me it was beautiful. I consider that the best compliment I have ever got on a bike I owned. Its a buyer's market now guys and cash is king.
Hampton Freestyle -Business 101 for Fred M  February 21, 2010 03:35 PM
Fred you are missing a very important fundamental of retail and that is the market determines price not the manufacturer. If the current prices are out of line with customer’s expectations or wallets then Yamaha and the other factories need to start building bikes that either cost less or appear to be a value at the current prices. The days of “build it and they will come” have been long over. If customers can’t afford the bikes or don’t feel it is a good value they won’t buy. Yamaha isn’t making much profit while the bikes sit in crates. Some of the factors that influence price Yamaha has no control over such as the currency exchange rate but a bike sold at a loss of $500 this year is better than the same bike being sold at a loss of $1000 in two years from now. A business plan needs to consist of more than just “sell’em for more and hope for the best”. Unless of course Yamaha thinks faeries are just going to ride their unicorns to the dealer and trade them in for a new bike. We don’t HAVE to buy a motorcycle or at least a new motorcycle; they, on the other hand NEED to sell motorcycles this is why WE determine price and not the manufacturers.
SAMxrl -Agreed  February 21, 2010 11:49 AM
I have to agree with others about lowering the prices and bringing in some "available only in Europe" models. Most of the big four Asian brands increased the cost of their bikes as much as $600.00 +or- across the board. You have to wonder what they were thinking! Increasing the costs (of an already over-inflated bike) in our bad economy can only lead to disaster. Geez, I could have told them that and I wouldn't command a six figure salary either.
lefty -Fred M.  February 21, 2010 02:55 AM
My current bike was bought because it was 4k off of list and many others have bought the same bike for the same reason. Better to have bikes on the street then in a crate. (Suzuki B-king).
Woodman West -Change we can believe in  February 20, 2010 08:21 PM
Drop your price, lose money on every sale and make it up in volume!! But seriously, Motorcycles have gotten expensive.
Fred M. -To fandango: You really are CFO material  February 20, 2010 07:18 PM
You wrote: "try droppin your prices ,then you might sell some bikes" Yamaha's problem is making a profit, not emptying out warehouses full of bikes. Do you think that faeries ride in on unicorns in the dark of night and build motorcycles for Yamaha. Do you think that Yamaha gets money from leprechauns to buy parts and materials? A business plan has to consist of more than "sell 'em for less."
ravi -bikes in uk/asia should be release in the usa  February 20, 2010 06:58 PM
there are bikes like the fz6n (naked), fz1n, fz8, super teneire, etc that would do well in the usa, but yamaha won't release them. release some new bikes and people will buy them, we are getting tired of the r6, not everyone wants to ride a bike that's for the track, the zx6r is getting better reviews than the r6 for the amount of you can have over the r6 in the STREET. YAMAHA is a great company that makes awesome bikes, but they need to release some more bikes in the usa.
fandango -$  February 20, 2010 05:15 PM
try droppin your prices ,then you might sell some bikes
Jake -Holy Cow  February 20, 2010 07:53 AM
A loss of 216 Billion yen works out to $2.3 Billion in U.S. dollars! From the outside, Yamaha seems the model of stability but obviously that's not the case. Good luck to Big Blue on the turnaround plans.
Woodman -Straoliner Deluxe  February 20, 2010 05:04 AM
If the dealers had bikes to sell it might help. The Strato Deluxe was promised in Jan. Try to buy one if you want someone to laugh in your face.
lefty -yamaha restructures  February 20, 2010 12:32 AM
I don't know why the motorcycle companies don't lower the price of there bikes and other products. Looking forward to seeing the future of affordable electric motorcycles.
bikerrandy -Yamaha restructures  February 19, 2010 08:18 PM
Glad to see Yamaha is seeing it's future in the short run as it really is instead of ignoring the obvious. Time to retract for now.
blender -Sad Indeed  February 19, 2010 07:26 PM
Wow, that's really terrible news. This economy is going to sink a lot of players. It's tragic and even though everyone acts like it's getting better, I'm not so sure.