Yamaha Aspires to Double Motorcycle Profits By 2018 Motorcycles August 17, 2015
Author: Olga Minchina
Account Manager

Source: Yamaha Motor Co.

A lower costs policy coupled with the launching of new products is expected to double the Japanese Yamaha Motor Co.'s motorcycle profit margin by 2018. According to the Japan Times, Yamaha aims to increase their overall margin to 10% by 2018. Hiroyuki Yanagi, Chief Executive Officer of the company, stated that the motorcycle business, however, will account for 50% of operating income by that time, a nearly two-fold increase from its current 26% share.

Last year, Yamaha presented new motorcycle models characterized by better fuel efficiency. Usage of specially designed shaped components across the platform is expected to push down production costs to as low as 20%. Hiroyuki Yanagi believes that the motorcycle business is likely to return to profit in developed markets after suffering through negative dynamics over the last 8 years.

The Company is not planning to confine its production to motorcycles, intending to build its own car plants in Europe by 2020. The idea of producing cars has been mulled at Yamaha for years, and the first prototype car was presented at the 2013 Tokyo Motor Show.

The four-wheeled vehicle is going to be energy-efficient and is anticipated to meet European consumers' demand for small cars. Yamaha is also considering emerging markets such as Indonesia, where they plan to grab a 40% share by 2018.

Japan is one of the global leaders in the motorcycle and scooter trade. In 2014, Japan exported 577 thousand units of motorcycles and scooters totaling 2,895 million USD, 5% over the previous year. Its primary trading partner was the U.S., where it supplied 35% of its total motorcycle and scooter exports in value terms, accounting for 50% of the U.S.'s total imports.

From 2007 to 2014, Japan was a net exporter of motorcycles and scooters. Over this period, exports consistently exceeded imports in value terms. However, in physical terms, the difference was less pronounced.

China and India were among the other main global suppliers of motorcycles and scooters in 2014. However, the fastest growing exporters from 2007 to 2014 were India (+36% per year) and Thailand (+18% per year).

Japan's top 5 trading partners in 2014 were the U.S., France, the Netherlands, Italy and Germany, with a combined 61% share of Japan's motorcycle and scooter exports. The share of France increased modestly (+3 percentage points), while the share of the Netherlands illustrated negative dynamics (-3 percentage points).

Source: World: Motorcycles And Scooters - Market Report. Analysis and Forecast to 2020