Yamaha revving towards big numbers

Yamaha, the world's second-largest motorcycle maker by volume, is targeting revenue to rise 33 per cent in three years to ¥1.6 trillion (Dh70.05bn) as it adds models and boosts sales to emerging markets.

Yamaha plans to set aside ¥190bn in capital expenditure in the period through 2015, the Japanese company said in its midterm plan released yesterday. Revenue will probably drop 6 per cent to ¥1tn this year, the company said in August. The motorcycle maker plans to introduce 250 products worldwide during the three years, including motorbikes and power generators, and increase sales in emerging nations by boosting the number of entry-level models, Hiroyuki Yanagi, the chief executive, said yesterday. Yamaha will cut costs further to save ¥75bn in the period, and reduce the number of factories in Japan to six from nine, he said.

"Emerging markets will still grow, but demand in some of these countries is starting to shift from motorbikes to cars," said Satoshi Yuzaki, an analyst at Takagi Securities in Tokyo.

"It's difficult to say if demand for two-wheelers in the coming years will still match that of the population [in emerging markets]."

The company is targeting ¥80bn in operating profit, an operating margin of 5 per cent, and sales of 9 million units, including 8.2 million two-wheelers, in 2015. It aims to post revenue of ¥2tn, operating income of ¥15bn, and sales of 12 million units in 2017, Yamaha said.

Net income may decline 37 per cent to ¥17bn this year, and operating profit, or sales minus the cost of goods sold and administrative expenses, may drop 48 per cent to ¥28bn, according to Yamaha's forecasts.

"In the next few years sales in emerging markets will become even more important," Mr Yanagi said. These markets will help the company to expand its global share, which was about 11 per cent to 12 per cent last year, he said, without giving a target for the increase.

Yamaha introduced a new 150cc V-Ixion sport model in Indonesia this month and the Spark 115i for Thailand, according to company releases.

It has factories in Indonesia, Vietnam, Thailand, the Philippines, India, Taiwan and China. The company plans to increase the production capacity of its plant near New Delhi, India's capital, to 1 million units and will build a factory in the southern city of Chennai, Mr Yanagi said.

Honda, the world's largest motorcycle maker, is targeting to expand global two-wheeler sales to 25 million units by March 2017 from 15 million in the 12 months ended March this year, it said in September.

* Bloomberg News