Motorcycle strategies for developing countries

Yamaha aims to greatly increase motorcycle sales in developing countries, operating profit remains flat

On February 9, Yamaha presented their consolidated financial report for December 2015. President Hiroyuki Yanaga revealed their plans of greatly increasing the number of motorcycle sales in developing countries (based on the number of shipped motorcycles) for the next term (by December 2016).

Their sales in Indonesia and India were remarkable, and they will increase by over 200,000 units for both countries: From 1.8 million to 2 million units in Indonesia, and from 595,000 to 826,000 units in India. Aside from that, they also plan to increase from 10,000 to 60,000 units in Thailand, Vietnam, Taiwan, and China, and they aim to increase by 640,000 units to make it 5.45 million units in developing countries compared to the previous term.

Most especially for Indonesia, they had 2.37 million units sold in 2014, so they wanted to take it back to that state after the drastic decrease in sales in 2015. “As a support, we will invest in strong products in each segment, and we will expand our contact with our customers by increasing our sales network to over 500 sales branches. Particularly, we have a weak point of being unable to get customer connections in remote areas, so we want to fill in that gap,” said President Yanagi, as they will move forward to investing with expensive products.

Just like in India, they still don’t have product strategies for the local areas, so they will introduce strategic products to those places and increase to around 700 branches to get connections with local area customers. At the same time, they also plan to assertively proceed with costing down.

However, President Yanagi views its returns as intensive. That is because of the increment of units that would disappear through the low currency rate in developing countries. Because of that, their estimated operating profit for a year will be down 0.4% to 120 billion yen, remaining in a flat condition. Because of that, Yamaha’s stock prices have drastically decreased, with less 386 yen (-18.07%) to 1,750 yen compared to the previous day’s 2,136 yen. For Yamaha, the high yen value is definitely a cause for headaches for the 90% exporting rate.

(Translated by Claire Marie Sausora)