Yamaha must “pursue true Yamaha-ness and break out of our old norms” if it hopes to increase profitability, says Hiroyuki Yanagi, the company’s president and chief executive officer. In an open letter released by Yamaha, Yanagi discussed what his company needed to do in order to reach its goal of producing 12 million units this […]
Yamaha Outlines 2013-2015 Business Plan
Yamaha Motor Co. revealed what it calls its New Medium-term Management Plan, outlining its business strategies for 2013 to 2015, including the introduction of 250 new models worldwide across its various product lines including motorcycles.
The three-year plan is an extension of Yamaha‘s plan for 2010-2012 which targets a “V-shaped recovery”. The term is used to describe an sharp downturn in the economy followed by a strong recovery back to previous levels. The previous plan called for the restructuring of its domestic and foreign manufacturing facilities and the loss of 1000 jobs to reduce costs by 60 billion yen from 2010-2012.
Yamaha is currently ahead of that target, forecasting a savings of 75 billion yen (US$892 million) over those three years. Yamaha however has fallen short on the previous goals for 1.4 trillion yen in net sales and 70 billion yen in operating income for 2012. Yamaha now forecasts year-end net sales of 1.2 trillion yen and an operating income of 28 billion yen. Production is also expected to be down for 2012 to 6.7 million units compared to 7.4 million units produced in 2011.
Despite falling short of its targets, Yamaha is ready to expand its business scale and begin to grow once again. In 2015, Yamaha is aiming to produce 9 million units, targeting 1.6 trillion yen in net sales and an operating income of 80 billion yen while further reducing costs by another 90 billion yen. Even further into the future, Yamaha hopes to increase annual production to 12 million units by 2017, translating to 2.0 trillion yen in net sales and an operating income of 150 billion yen.
To reach those goals, Yamaha plans to introduce 250 new models across its various lines including motorcycle, ATV, snowmobile, marine and powered bicycles. These new models will also include new low-priced electric motorcycles.
For its motorcycle business, Yamaha plans to focus on the lucrative Indian market, aggressively introducing new models such as scooters and other lower-priced models, likely including a new 250cc sportbike previously mentioned by India Yamaha Chief Executive Officer Hiroyuki Suzuki. Yamaha also sees growth in southeast Asian markets, introducing low-cost models using fuel-efficient engines.
For developed markets such as North America and Europe, Yamaha says it plans to increase “lifetime customers” by expanding its lineup from entry-level to flagship models. This will likely include new models using Yamaha’s upcoming three-cylinder crossplane engine. The mention of new “entry” models is particularly interesting, as Yamaha remains the last of the Big Four Japanese manufacturers to release a new entry-level model in recent years.