Yamaha gunning for 20% of world motorcycle market

TOKYO, April 9 Reuters reported that Yamaha Motor Co Ltd, the world's second largest motorcycle maker, said on Tuesday it would use developing Asia to cut costs and rev up its share of the global motorcycle market to 20 percent from eight percent by 2010.

Yamaha also said South-east Asia, India -- and especially China -- would play a key role in helping it to achieve its goal of a group operating profit of 70 billion yen ($532.2 million) in the year ending March 2005, as well as a 30 percent cut in costs.

The operating profit projection, included in a three-year business plan released on Tuesday, would more than double a 31 billion yen group operating profit of projected for the business year that ended on March 31.

``While we expect the tough business climate to continue in our domestic market, we have high hopes for an solid increase in overall demand on the back of an economic bounceback in Asia,'' Yamaha president Tooru Hasegawa told a news conference.

``If we can up our market share in the developing countries, we can grow at a higher rate than the overall market.''

Yamaha, which generates about 80 percent of its revenue outside Japan, is undergoing a restructuring aimed at cutting costs and responding to a slide in its domestic business, where it ranks second to global leader Honda Motor Co Ltd.

All Japanese motorcycle makers have faced difficult times in the domestic market, which peaked in the early 1980s.

Apart from a stagnating economy, Japan's aging population is working against motorbike manufacturers. The younger and growing population in less-developed Asia offers better opportunities.

While Yamaha is forecasting just a nine percent jump in domestic sales to 240,000 motorcycles in 2004/05, it expects sales in the India/ASEAN region to rise 56 percent to 1.7 million and sales in China to soar 780 percent to 440,000.

HONDA LEADS

Yamaha sold nearly two million motorcycles worldwide in 2001 for an eight percent share of the market, while Honda's sales of 5.73 million accounted for around 22 percent.

Yamaha has forecast a 14.2 percent jump in sales to 2.28 million in 2002 while Honda expects a 24.1 percent rise to 7.11 million.

A Honda spokesman declined to comment on Yamaha's aim to grab 20 percent of world share in 2010.

``We are just focusing on our own goals,'' he said.

Under the new business plan, Yamaha said it aimed to achieve 1.05 trillion yen ($8 billion) in sales in 2004/05, of which 568 billion yen would come from the mainstay motorcycle business.

For the year ended in March 2002, Yamaha has forecast 920 billion yen in group sales.

Yamaha said increasing the use of parts supplied from China would play an important role in achieving its goal of cutting costs by 30 percent by 2004/05.

As part of its efforts, Yamaha said it would set up a wholly owned Chinese unit to develop and supply parts to its global production facilities.

The new Chinese unit, due to start operation in July 2002, would be capitalised at 480 million yen.

Hasegawa would not comment on the company's outlook for the year ended in March or 2002/03, saying Yamaha would announce its results and earnings forecasts on May 15.

Yamaha reported better-than-expected results for the first-half in November but cut its full year group net profit forecast to nine billion yen on worries about the global economic slowdown and the stubborn info-tech slump.

The company, while mainly known for its motorcycles, also boasts large sales of boats and outboard motors, and it is active in info-tech businesses such as surface mounters, a type of industrial robot used to make semiconductors.