Try the all-new QuickBooks Online for FREE.  No credit card required.

Pricing Strategy for Yamaha

Document Sample
Pricing Strategy for Yamaha Powered By Docstoc
English Edition
The “Yamaha Fact Book 2007” has been produced to help you gain a better understanding
of what Yamaha Motor is doing today. Although this publication is targeted at people
working for the press and other mass media, we have taken other readers, both inside and
outside the company, into consideration in preparing the booklet. We hope you will find it
a useful guide to our diverse activities worldwide.

Corporate Section
•Consolidated Business Performance in the Fiscal Year Ended December 31, 2006 . . . . . . 3
•Corporate Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
•Corporate Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
•Management Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
•Organization Chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
•Board of Directors, Corporate Auditors and Executive Officers . . . . . . . . . . . . . . . . . . . . . 10
•Three-Year Medium-Term Management Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
•Operating Performance (Consolidated Basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
•Sales Breakdown by Business (Consolidated Basis) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
•Sales Breakdown by Region (Consolidated Basis). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
•Change in Number of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
•Change in Number of Recruited Graduates (Yamaha Motor Co., Ltd.). . . . . . . . . . . . . . . 15

Product Business Section
•Motorcycles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
•Marine Engines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
•Personal Watercraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
•Boats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
•Swimming Pools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
•All-Terrain Vehicles & Side-by-Side Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
•Snowmobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
•Golf Cars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
•Generators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
•Snow Throwers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
•Racing Karts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
•Surface Mounters & Industrial Robots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
•Automotive Engines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
•PAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
•Unmanned Industrial Helicopters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
•Electric Wheelchairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
•Life Science Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
•Other Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Corporate Section

Consolidated Business Performance
in the Fiscal Year Ended December 31, 2006

Business Developments and Results                             and launched major operations in the life science
During the fiscal year ended December 31, 2006 (“fiscal       business.
2006”), the Japanese economy continued on a mild                 The Company invested aggressively to boost
recovery led by increased capital expenditures and            production worldwide as it looked to advance to the
overseas demand, although there were negative factors         next stage of business growth. Specifically, in Japan,
such as soaring crude oil and raw materials prices.           the Company started operations at its new research
Overseas, the U.S. economy decelerated, reflecting slow       and test laboratory, initiated the Global Parts Center,
housing investments, while the economy in Asia grew           and opened a marketing and technical center at the
steadily in general.                                          IM (Intelligent Machinery) Company, while bringing
   Against this backdrop, during fiscal 2006 the Yamaha       a new plant online to mass-produce raw material for
Motor Co., Ltd. and its consolidated subsidiaries (the        astaxanthin. Overseas, the Company began production
“Company” or “Group”) remained focused on the three           at a new motorcycle plant in Indonesia and a new
key priorities specified in its three-year medium-term        motorcycle parts plant in Vietnam.
management plan, NEXT50-Phase II: creating value that            The Company was also active in philanthropy,
differentiates Yamaha; continuing the profit-oriented         establishing the Yamaha Motor Foundation of Sports.
approach; and maximizing opportunities for business
growth. All activities in this regard during the period
were based on the Group’s recognition that fiscal 2006
was a significant transitional year, in which the Group
strove to build on the momentum gained in fiscal 2005,
the first year of the plan.
   With regard to creating value that differentiates
Yamaha from its competition in the global marketplace,
the Group aims to make the Yamaha brand Your Only
One for consumers by promoting high-value-added
marketing. In the effort, the Group has been developing
motorcycle demand in the ASEAN market by
introducing new-concept automatic commuter vehicles,
among other measures.
   In continuing the profit-oriented approach, the
Group has focused on cutting operational costs by
implementing the system-supplier system, which
integrates development, purchasing and manufacturing
capabilities based on each product part unit.
   In terms of maximizing opportunities for business
growth, the Group expanded sales in Asia (excluding
Japan) and Brazil, began full-scale marketing in Russia

Review by Business Segment                                       Marine Products
Motorcycles                                                      In Japan, sales of marine products for fiscal 2006 were
In Japan, sales of motorcycles for fiscal 2006 decreased         virtually unchanged from fiscal 2005. Although sales
from fiscal 2005, as sales fell in the mini-sized category       of outboard motors increased in Europe, sales of these
(engine displacement of 126cc to 250cc) and small-sized          products decreased in the United States as demand
category (engine displacement of 251cc and over).                fell due to higher gasoline prices. However, personal
   Overseas, motorcycle sales in Asia excluding                  watercraft sales increased.
Japan rose. The gain reflects particularly robust sales
growth in Indonesia, Thailand and Vietnam amid
growing demand for automatic models in the region,
and an aggressive marketing strategy, including the
expansion of sales networks. In Europe and the United
States, sales of large sports models were strong, while
motorcycle sales also increased steadily in Latin

Power Products                                                                   Other Products
Although sales of all-terrain vehicles dropped in the                            Overall surface mounter sales increased, led by an
United States and Europe, side-by-side vehicle sales                             increase in exports to Asian countries, although sales
grew substantially in the United States.                                         decreased in Japan. Sales of automotive engines also

                                          Sales                     Sales as a              Overseas sales as              Operating income
 Business segment          Amount                                percentage of net         a percentage of net        Amount
                                             Annual change (%)       sales (%)                  sales (%)                           Annual change (%)
                      (millions of yen)                                                                          (millions of yen)
    Motorcycles           914,810                   +20.4                  57.8                     94.7              54,603                  +64.6

  Marine products         266,529                    +6.7                  16.8                     88.6              23,193                    -6.2

  Power products          250,418                   +10.2                  15.8                     94.4              27,588                   +2.7

   Other products         150,288                    +8.5                      9.6                  36.2              18,149                    -2.2

        Total           1,582,046                   +15.0                 100.0                     88.1            123,534                   +19.5

Capital Expenditures                                                             the Global Parts Center, the marketing and technical
Capital expenditures for fiscal 2006 amounted to                                 center at the IM Company, and a new plant for
83,014 million yen, invested mainly in facilities to                             mass production of raw material for astaxanthin.
boost production worldwide. In Japan, the Company                                Overseas investments included a new motorcycle
invested in manufacturing equipment for new                                      plant in Indonesia and a new motorcycle parts plant in
motorcycle models, a new research and test laboratory,                           Vietnam.

Global Parts Center                                    Marketing and technical center at                           Astaxanthin manufacturing plant
                                                       the IM Company

Fund raising                                                      3) Maximizing growth opportunities
The Company took out long-term loans amounting                      The Group will accelerate ongoing business
to 32,056 million yen from financial institutions for               expansion in Asia and Brazil; further develop the
refinancing during fiscal 2006, in accordance with                  Russian market; and continue to promote the new
scheduled repayments of long-term working capital.                  life science business.

Key Priorities the Group Must Address                           2. Taking a consistent customer-first approach
Business conditions surrounding the Group are                     The Group recognizes that quality problems not only
expected to remain worrisome, reflecting uncertainties            cause immense damage to management, but also
over the future of the U.S. economy and persistently              risk betraying customers’ trust and expectations.
high raw material prices, although the Japanese                   They could destroy the brand image that the Group
economy is predicted to continue its mild recovery.               has cultivated over many years. Therefore, any
Against this backdrop, the Group remains committed                quality problem should be addressed by the entire
to achieving continuous growth. It will leverage the              group. At the Group, all employees are committed to
investments it has made thus far, take a consistent               making quality improvement a top priority, taking
customer-first approach, and work to continue earning             a customer-first approach and accepting personal
the trust of the communities it serves.                           responsibility for the results.

1. Realizing the goals of the NEXT50-Phase II                   3. Building a trustworthy corporate culture
  medium-term management plan                                     The Company is not only committed to abiding
                                                                  by the law but also to ensuring that all its group
  1) Creating value that differentiates Yamaha                    companies and their employees adhere to high
     The Group seeks to deliver new value in                      ethical standards in everything they do. Furthermore,
     technology, manufacturing and sales to markets               the Company plans to introduce programs designed
     worldwide by implementing high-value-added                   to fulfill its corporate social responsibilities and
     marketing that only Yamaha can offer.                        strengthen compliance, including an initiative
                                                                  proposed by the Compliance Special Committee,
  2) Continuing the profit-oriented approach                      established in 2006.
     The Group intends to improve profitability in
     product planning, development, purchasing and
     sales, building on its efforts in these areas during
     the previous medium term, while more fully
     deploying the system-supplier system. To this end,
     the Group will sharpen its focus on cost reduction,
     reviewing once again all operation processes from
     a comprehensive, upstream perspective.

Corporate Facts

Founded:             July 1, 1955

Capital:             ¥48,168 million

President:           Takashi Kajikawa

                                                                                        Yamaha Motor Co., Ltd.
No. of employees:    Non-consolidated basis: 8,461                                      Head Office

                     Consolidated basis:     41,958

Head office:         2500, Shingai, Iwata, Shizuoka 438-8501, Japan

Lines of business:   Manufacture and marketing of motorcycles, scooters,
                     electro-hybrid bicycles, boats, sail boats, personal
                     watercraft, pools, utility boats, fishing boats, outboard
                     motors, diesel engines, all-terrain vehicles, side-by-side
                                                                                           Takashi Kajikawa
                     vehicles, racing karts, golf cars, multi-purpose engines,             President, Chief Executive Officer
                                                                                           and Representative Director
                     generators, water pumps, snowmobiles, small-sized snow
                     throwers, automotive engines, intelligent machinery,
                     unmanned industrial helicopters, electrical power units
                     for wheelchairs, and helmets; biotechnological production
                     and processing of agricultural and marine products and
                     microorganisms and marketing of these products; import
                     and sale of various products; development of tourist
                     businesses and management of leisure, recreational facilities
                     and related services

Yamaha Motor Group: Number of consolidated subsidiaries: 108
                    (Japan: 34 overseas: 74)
                     Number of non-consolidated subsidiaries accounted for by
                     the equity method: 14
                     Number of non-consolidated affiliates accounted for by the
                     equity method: 29

                                                              As of December 31, 2006

Corporate Mission

Kando Creating Company
Yamaha, a company offering new excitement and a
more fulfilling life for people all over the world

What Is Kando?
Kando is a Japanese word for the simultaneous feelings
of deep satisfaction and intense excitement that we
experience when we encounter something of
exceptional value.

Management Principles

We strive to achieve our corporate mission by adhering
to three principles:

1. Surpassing customer expectations                             3. Fulfilling social responsibilities globally
We must remain keenly aware of customers’ evolving              As a good corporate citizen, we act from a worldwide
needs, in order to provide them with quality products           perspective and in accordance with global standards.
and services of exceptional value that surpass their            We will work locally to better the social environment,
expectations.                                                   and think globally in helping preserve the natural
   We can and will earn a fair profit by making all-out         environment.
efforts to satisfy our customers.

2. Establishing a corporate environment that fosters
Our corporate environment should be peopled with
autonomous, empowered employees. In cultivating our
employees’ creativity and abilities, we will establish an
equitable system of evaluation and rewards.

Organization Chart
(As of June 1, 2007)

                                                                                                                                               Motorcycle Headquarters

                                                                                                                                                  Quality Assurance

                                                                                                                                                  Planning Operations

                                                                                                                                                  Marketing Operations
                                                                              Internal Control Auditing
                                                                                                                                                  Sales Operations
                                                                                  Product Assurance
                                                                                  Committee                                                       Product Development
                                                                                  Committee                                                       Engineering
                                                                                  Other Committees               Research & Development
                                                                                                                                                  SyS* Operations
General Meeting            Board of
                           Directors               President
of Shareholders
                          Executive Personnel      Management                  American Headquarters             CSR* Planning Division
                          Committee                Committee
                                                                                                                                                 PAS* Operations
                                                                                                                 Tokyo Office
                                                   Risk Management and         Europe Headquarters
                                                   Compliance Committee
                                                                                                                 Corporate Planning              Marine Operations
                       Board of Corporate       Corporate Auditor’s            Asian Headquarters
                       Auditors                 Office                                                           General Affairs
                                                                                                                 Division                        Pool Operations

                                                                               Japan Headquarters
                                                                                                                 Public Relations
                                                                                                                 Division                        Automotive Operations

                                                                               Security Trade
                                                                               Control Operations                Advertising Division            Overseas Market
                                                                                                                                                 Development Operations
                                                                                                                 Human Resources
                                                                               Brand Management                  Development Division
                                                                               Operations                                                        Parts Operations
                                                                                                                 Finance & Accounting
                                                                               Product Assurance                 Division
                                                                               Operations                                                        Aeronautic Operations
                                                                                                                 Logistics Division

                                                                                                                                                   RV* Company
                                                                                                                 Legal & Intellectual
                                                                                                                 Property Division
                                                                                                                                                   ME* Company
                                                                                                                 Process & IT* Division

                                                                                                                                                   IM* Company

                                                                          CSR: Corporate Social Responsibility     RV: Recreational Vehicle
                                                                          IT: Information Technology               ME: Marine Engine
                                                                          SyS: System Supplier                     IM: Intelligent Machinery
                                                                          PAS: Power Assist System

Board of Directors, Corporate Auditors and Executive Officers
(As of June 1, 2007)

Board of Directors                            Managing Executive Officer                        Executive Officer
                                               Tetsuo Uchiyama                                    Noritaka Shibata
Chairman and Director                           In charge of finance, General Manager of the      Senior General Manager of Parts
 Tsuneji Togami
                                                Corporate Planning Division, and Senior           Operations
President and Representative Director           General Manager of Japan Headquarters
                                                                                                Executive Officer
  Takashi Kajikawa
                                              Managing Executive Officer                          Takashi Tsuchiya
Representative Director                        Hiroyasu Miyao                                     Senior General Manager of the Europe
  Tetsuo Uchiyama                               In charge of public affairs, stationed at the     Headquarters, President of Yamaha Motor
                                                Tokyo Office                                      Europe N.V., and President of Yamaha
Director                                                                                          Motor Distribution B.V.
  Hiroyasu Miyao                              Senior Executive Officer
                                                Wataru Suzuki                                   Executive Officer
Director (Outside)                              In charge of corporate quality assurance,         Masao Furusawa
  Shuji Ito                                     and Senior General Manager of Product             Senior General Manager of Engineering
Director                                        Assurance Operations                              Operations, Motorcycle Headquarters
  Wataru Suzuki
                                              Senior Executive Officer                          Executive Officer
Director                                        Shohei Kato                                       Nobuaki Shiraishi
  Shohei Kato                                   President of the ME* Company and                  President of the RV* Company
                                                President of Yamaha Marine Co., Ltd.
Director                                                                                        Executive Officer
  Toyoo Ohtsubo                               Senior Executive Officer                            Tomotaka Ishikawa
                                                Toyoo Ohtsubo                                     President of Yamaha Motor India Pvt. Ltd.
Director                                        General Manager of Process & IT* Division         and President of Yamaha Motor India Sales
  Takaaki Kimura                                                                                  Pvt. Ltd.
                                              Senior Executive Officer
Director                                        Takaaki Kimura                                  Executive Officer
  Toru Watabiki                                 Senior General Manager of Automotive              Masahito Suzuki
Director                                        Operations                                        Senior General Manager of Research &
  Akira Sano                                                                                      Development Operations
                                              Senior Executive Officer
Director (Outside)                              Toru Watabiki                                   Executive Officer
  Masayoshi Furuhata                            Senior General Manager of the Security            Tadakazu Ishibashi
                                                Trade Control Operations and Senior               In charge of special issues for the ME*
Director (Outside)                              General Manager of Planning Operations,           Company
  Eizo Kobayashi                                Motorcycle Headquarters
                                                                                                Executive Officer
                                              Senior Executive Officer                            Takahiko Takeda
Corporate Auditors                              Akira Sano                                        Senior General Manager of Sales
                                                Senior General Manager of the American            Operations, Motorcycle Headquarters,
Standing Corporate Auditor
                                                Headquarters                                      Senior General Manager of the Asian
  Haruhiko Wakuda
                                                                                                  Headquarters, and Chairman of Yamaha
                                              Senior Executive Officer
Standing Corporate Auditor                                                                        Motor Vietnam Co., Ltd.
                                                Akira Araki
  Hiroshi Tanaka
                                                Senior General Manager of Product               Executive Officer
Corporate Auditor (Outside)                     Development Operations, Motorcycle                Yoshiteru Takahashi
 Naomoto Ohta                                   Headquarters                                      President of PT. Yamaha Indonesia Motor
                                                                                                  Manufacturing and President of PT.
Corporate Auditor (Outside)                   Executive Officer                                   Yamaha Motor Manufacturing West Java
 Norihiko Shimizu                               Shinji Terashita
                                                Senior General Manager of Quality               Executive Officer
A Substitute Corporate Auditor to prepare
                                                Assurance Operations, Motorcycle                  Yoshiro Takahira
for the contingency that the number of          Headquarters                                      Senior General Manager of Procurement
Outside Corporate Auditors could fall below                                                       Operations, Motorcycle Headquarters
                                              Executive Officer
the minimum stipulated in the Corporate
                                                Osamu Hayata                                    Executive Officer
Law: Tetsuo Kawawa
                                                General Manager of the Internal Control           Hiroyuki Yanagi
                                                Auditing Division                                 Senior General Manager of SyS*
Executive Officers                                                                                Operations, Motorcycle Headquarters
                                              Executive Officer
President and Chief Executive Officer           Toshimitsu Iio
  Takashi Kajikawa                              President of Yamaha Motor Manufacturing
  In charge of brand promotion, and             Corporation of America                           ME: Marine Engine
  Chief General Manager of Motorcycle         Executive Officer                                  IT: Information Technology
  Headquarters                                                                                   RV: Recreational Vehicle
                                                Masahiro Inumaru
                                                                                                 SyS: System Supplier
                                                Senior General Manager of Brand
                                                Management Operations and Senior
                                                General Manager of Marketing Operations,
                                                Motorcycle Headquarters

Three-Year Medium-Term Management Plan (January, 2005 through December, 2007)

Yamaha Motor initiated a new three-year medium-term                          1. Value:            Attaining high profitability in each
management plan — NEXT50-Phase II — to run from                                                   product business by creating value
January 1, 2005 through December 31, 2007, in order                                               that differentiates Yamaha from the
to attain further growth and profitability. An outline of                                         competition
NEXT50-Phase II is as follows.                                               2. Profitability: Continuing profit-oriented approach
                                                                             3. Growth:           Maximizing growth opportunities in
Basic Policy                                                                                      existing businesses in Asia and other
Building on the profitable structure it has established                                           markets, and developing new business
during the previous medium-term management plan,                                                  domains as further growth sources
the Company will implement a business strategy
designed to balance value, profitability and growth,                         Vitalizing human resources and organizations to
making Yamaha the market’s exclusive brand.                                  support the NEXT50-Phase II strategies outlined above.

                                        (Maximizing opportunities
                                                                           (Continuing profit-oriented approach)
                                           for business growth)
                          Expanding the motorcycle business                  Achieving steady profit expansion for
                          in the ASEAN region                                businesses in Europe and the U.S.
                          Exploiting BRICs markets and establishing          Maintaining and expanding the high
                          the business foundation                            profitability of the IM* business
                          Entering new business domains                      Continuing and enhancing cost reduction
                         •Biotechnology business,                            Promoting high-value-added marketing
                           EV (electric vehicle) business, etc.

                                          Your Only One Brand
                                     Value (Creating value to differentiate Yamaha)
                             Creating and expanding customer value              Raising shareholder value
                            •Creating value that differentiates Yamaha         •Increasing market value of shares by
                              based on proprietary technologies                 expanding EPS**
                            •Promoting brand and marketing strategies          •Implementing the new dividend policy
                             Increasing social value                            Vitalization of personnel and
                            •Fulfilling CSR                                     organizations
                                                                               •SMART*** Project

                                                                                   * IM: Intelligent Machinery
                                                                                   ** EPS: Earnings per share
                                                                                   ***SMART stands for Strategic, Measurable,
                                                                                      Accountable, Return Max., and Timely

Numerical Targets
1. Targets for the fiscal year ending December 31, 2007                                            •Interest-bearing debt ¥50 billion (Zero in real terms,
  on a consolidated basis (premised on an exchange rate                                                                                  offset by cash and deposits
  of 105 yen against the U.S. dollar and 128 yen against                                                                                 in banks)

  the euro)
                                                                                                                                         *ROE: Return on equity

  •Net sales                       ¥1,450 billion                                             2. Capital Expenditures
  •Operating income ¥120 billion                                                                   Aggressive investments totaling ¥210 billion during
  •Ordinary income                 ¥120 billion                                                    the current medium term, a 60% increase from
                                   (Ordinary income margin: 8.3%)                                  the previous medium term, to attain higher value,
  •ROE*                            14.7%                                                           profitability and growth.
  •Equity ratio                    48.3%

                                               Shareholders                                                         Communities
                                                               Kando* Creating Company
                                                       Customers                                            Employees

                                                           New 3-Year Medium-Term Management Plan
                                                                       NEXT 50 - Phase II
                                                        Toward Developing Exclusive Brand Status

                                                                            Expanding the ASEAN motorcycle business
                                              opportunities                Promoting launches in new business domains
                                               for growth

                                                                             Exploiting BRICs markets and establishing
                                                                              business foundations in these markets

                                                                     Achieving steady profit expansion in Europe and the U.S.


                                                                   Maintaining and expanding the high profitability of the IM business



                                                                             Continuing and enhancing cost reduction
                                                                                                                                                         le G
                    ed C

                                                                                     Promoting value marketing

                                               Creating value            Creating and developing customer-centric values
                                                                                                                                                               h  t

                                             that differentiates

                                                                     •Creating value to differentiate the brand, based on proprietary technologies
                                                  Yamaha             •Promoting brand and marketing strategies

                                        Commitment to CSR                                             Strengthening corporate governance
                                                          Vitalization of personnel and organizations

                                    Establishing the foundation to grow the company into the future                  NEXT 50 - Phase I

       * Kando is a Japanese word for the simultaneous feelings of deep
         satisfaction and intense excitement that people experience
         when they encounter something of exceptional value.

Operating Performance (Consolidated Basis)

                                                                                             (Unit: billion ¥ except exchange rate; rounded off to one decimal place)

                                                        FY2004/12               FY2004/12                                                           FY2007/12
                                                    (irregular nine-month (twelve-month conversion     FY2005/12               FY2006/12                 (plan)
                                                      accounting period) figures only for reference)

 Net sales                                                1,012.0                  1,176.8                1,375.2                 1,582.0              1,650.0

 Net income                                                   38.2                     —                      64.0                    77.2                 78.0

 Operating income                                             70.1                   88.8                   103.3                   123.5                 128.0

 Ordinary income                                              70.4                     —                    103.1                   125.4                 133.0

 Capital expenditures                                         45.7                   57.8                     76.8                    83.0                 77.6

 Depreciation expenses                                        30.8                   36.5                     39.9                    47.4                 57.5

 Research and development expenses                            51.4                     —                      71.6                    77.1                    —

 Equity ratio                                              38.3%                       —                   40.1%                   41.7%                45.2%

 ROE                                                       13.0%                       —                   16.7%                   16.4%                15.0%

 Interest-bearing debt                                      120.6                      —                    154.0                   195.2                     —

 Exchange rate (¥: US$/euro)                             109/133                   108/132               107/136                 114/141              114/148

 Percentage of overseas sales                              88.4%                    86.6%                  86.6%                   88.1%                88.5%

 Percentage of motorcycle business sales                   57.4%                    54.2%                  55.2%                   57.8%                59.1%

 Number of consolidated subsidiaries                            96                     —                         98                   108                     —

 Net cash provided by operating activities                    43.4                     —                      66.3                    94.2                    —

 Net cash used in investing activities                      (44.3)                     —                     (72.1)                 (79.7)                    —

 Net cash provided by (used in) financing activities           2.1                     —                     (0.03)                   18.7                    —

 Cash and cash equivalents at the end of the year             38.9                     —                      38.7                    74.4                    —

Note: The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
      Company’s annual closing date, from March 31 to December 31. Therefore, in some items, the Company provided the
      twelve-month conversion figures (January 1, 2004 through December 31, 2004), only for reference.

Sales Breakdown by Business
(Consolidated Basis)

                                                (Unit: billion ¥; rounded off to one decimal place)

                                          Other products
                                          150.3 (9.6%)

                              Power products
                              250.4 (15.8%)

                                                                   Net sales                          Motorcycles
                                                                                                      914.8 (57.8%)

                              Marine products
                              266.5 (16.8%)

Major products in the motorcycles segment include:                                  golf cars, generators, small-sized snow throwers and multi-
motorcycles and knockdown parts for overseas production; in the                     purpose engines; and in the “other products” segment: surface
marine products segment: outboard motors, personal watercraft,                      mounters, industrial robots, automotive engines, automotive
pleasure boats, fiberglass-reinforced plastic pools, fishing boats,                   components, electro-hybrid bicycles, unmanned industrial
utility boats and diesel engines; in the power products segment:                    helicopters, electrically powered wheelchairs and the
all-terrain vehicles, side-by-side vehicles, snowmobiles,                           intermediate parts for products in all business segments.

Sales Breakdown by Region
(Consolidated Basis)

                                                (Unit: billion ¥; rounded off to one decimal place)

                                          Other areas
                                          168.4 (10.6%)


                                                   Asia            FY2006/12              North
                                                  423.5            Net sales              America
                                                 (26.8%)             1,582.0              (29.6%)

                                                               333.4 (21.1%)

                                                                               Overseas 1,393.4 (88.1%)

Change in Number of Employees

    At the end of fiscal year      2001/3        2002/3             2003/3              2004/3          2004/12         2005/12      2006/12

Number of                         8,278         8,198           8,168               8,078               8,099           8,136        8,461
                Yamaha Motor
employees                         (40.0         (40.0           (40.2               (40.5               (40.7           (40.9        (40.9
                (average age)     years old)    years old)      years old)          years old)          years old)      years old)   years old)

                Consolidated       18,162        22,794             23,898              25,616           28,569          31,245       33,497

                     Total         26,440        30,992             32,066              33,694           36,668          39,381       41,958

Change in Number of Recruited Graduates (Yamaha Motor Co., Ltd.)

          Fiscal year             2001/3       2002/3        2003/3          2004/3          2004/12          2005/12      2006/12    2007/12

Graduates of four-year colleges
and graduate schools                48          51            68             111                 132            112           128        148

    (Office work, marketing)       (17)         (6)          (26)            (36)                (35)           (22)          (32)       (39)

    production-related work)       (31)        (45)          (42)            (75)                (97)           (90)          (96)      (108)

    Two-year/technical                                                                                                        22
    college graduates               19          19            17              19                 13               8                      31

    High school graduates           83          84            81              54                 21               30          86         100

             Total                 150         154           166             184                 166            150           236        279

Product Business Section


Product Profile                                                          war restoration, the Company was seeking peaceful
Motorcycles are convenient personal commuter                             applications for its manufacturing machinery when
vehicles for daily use. They also serve in utility                       Genichi Kawakami, then President of Nippon Gakki,
applications, including the transportation of goods, and                 decided to manufacture motorcycles. This decision was
are popular worldwide for such leisure uses as touring                   reached after extensive market studies and comparison
and racing.                                                              of a number of candidate products such as sewing
                                                                         machines and motorized tricycles. Yamaha’s first
                                                                         motorcycle model, born after numerous prototypes,
 In Japan, a driver’s license is required to ride a motorcycle
                                                                         was the YA-1, featuring a 2-stroke 125cc engine. To
 on a public road. There are four types of driver’s license for
 motorcycles, classified by engine displacement:                         mass-produce and market the YA-1, Yamaha Motor Co.,
   50cc and under:    Motorized bicycle (moped)                          Ltd. was established on July 1, 1955. Nicknamed the
   51 to 125cc:       Standard motorcycle with small-size engine
                                                                         “Red Dragonfly,” the YA-1 became wildly popular.
   126 to 400cc:      Standard motorcycle
   401cc and over:    Large motorcycle                                      In its first entries on the racing circuit, the YA-1
                                                                         made a dramatically successful debut, winning the
 In addition, a new license limited to the operation of automatic
                                                                         championship in the Mt. Fuji Ascent Race and the
 transmission (AT) motorcycles has been introduced.
   (License for AT motorcycles only)                                     Asama Highlands All-Japan Endurance Motorcycle
   51 to 125 cc:      Small AT motorcycle                                Race, two of the major motorcycle races in Japan at that
   126 to 400 cc:     Standard AT motorcycle
                                                                         time. In the 1960s, Yamaha motorcycles competed in the
   401 to 650 cc:     Large AT motorcycle
                                                                         World Championship Road Racing series. Through
                                                                         its aggressive performance in motorcycle racing,
Applications (User Profile)                                              Yamaha Motor gained the expertise to develop and
Motorcycles are popular in utility applications, mainly                  manufacture a highly acclaimed line of motorcycles
for newspaper and other door-to-door delivery                            to a global standard. Yamaha Motor has since
purposes, where distinguishing features such as agility,                 expanded its product lineup from on-road bikes to
space-saving design and energy-saving performance                        off-road models and scooters, thus gaining a wider fan
make the motorcycle a desirable solution. Meanwhile                      base for Yamaha motorcycles.
for leisure, motorcycles are in widespread use for
on-road touring and racing, as well as for off-road                      Current Business Conditions — Product
riding. In recent years, scooters of various engine sizes                Features and Technologies
have also been gaining popularity worldwide,                             Yamaha’s big sportbikes are popular in Europe and the
primarily among young people, who favor them as                          United States. The YZF-R series, incorporating state of
commuter vehicles.                                                       the art G.E.N.I.C.H. electronic control technology, and
                                                                         the Star series — Yamaha’s exclusive cruiser line — are
Background of the Business                                               among the models that have been well received in these
During World War II, Nippon Gakki Co., Ltd.                              markets.
(presently Yamaha Corporation) was manufacturing                            Yamaha’s big scooters, such as the 250cc Majesty
aircraft propellers for the military by maximizing                       and the 500cc TMAX, are also acclaimed worldwide.
its woodworking expertise. During Japan’s post-                          These larger scooters, based on new values, satisfy the

           FY2006/12 regional breakdown of                                                   FY2006/12 worldwide demand and
           worldwide demand*1                                                                Yamaha unit sales*1
                                      Japan 740 (1.8%)
  Rest-of-world                                 North America 1,100 (2.7%)                                               4,420
  5,570 (13.4%)                                 Europe 1,970 (4.7%)

                         demand                                                                                Worldwide
                          41,530                                                                                demand
              China                           Asia                                                               41,530
                        Unit: thousands
              13,620     (%): share of
                                             18,530                                                            Unit: thousands
             (32.8%)        demand          (44.6%)

                                                                                                             Other companies

           FY2006/12 Yamaha unit sales by region
           (consolidated basis)
Rest-of-world                          Japan 161 (3.6%)
373 (8.4%)
                                                 North America 207 (4.7%)
308 (7.0%)                                       Europe 407 (9.2%)

                         Unit sales
                        Unit: thousands
                       (%): share of unit

                       2,964 (67.1%)

    Yamaha unit sales                                                        Yamaha sales by region
    (consolidated basis)                                                     (consolidated basis)
    Unit: thousands                                                          Unit: billion ¥

   4,500                                                                     1,000
                                                373                                                                       914.8
   4,000                           3,849                                      900
                                                308                                                                       103.8
                                    311                                       800                              759.8
   3,500                            224
                       3,171                                                                                   76.4
                        237                                                   700                  637.3
           2,681        282                                                                         54.7                  390.5
                                                                              600         535.9
   2,500    216
            289                                2,964                                       48.1                296.7
                                   2,503                   Rest-of-world      500                                                  Rest-of-world
                                                           China              400         164.3
                       1,874                                                                                                       Asia including
   1,500   1,445                                           Asia                                                           228.8    China
                                                                              300                              204.4
                                                                                          170.3    200.9
   1,000                                                   Europe                                                                  Europe
    500      368       411          421        407         North America                           111.4       130.6      143.4    North America
                                                                              100         101.2
             184       195          223        207
             178       172          167        161         Japan                          52.2      48.9       51.7        48.4    Japan
      0                                                                          0
           FY’04/3   ’04/12*2     ’05/12       ’06/12                                 FY’04/3     ’04/12*2     ’05/12     ’06/12

    Notes: *1 Yamaha surveys
           *2 The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
              Company’s annual closing date, from March 31 to December 31. Therefore, the Company has provided twelve-month
              conversion figures (January 1, 2004 through December 31, 2004), only for reference.

emerging needs of the era and keep the company a step            is designed to enhance overall competitiveness in the
ahead of the competition.                                        ASEAN region. In May 2006, the Company began
                                                                 operating the Global Parts Center, central to the global
Environmental Response                                           supply-chain management (SCM) strategy, designed
Yamaha Motor makes environmental preservation                    to link parts supply centers in Japan and six regions
its top priority, moving quickly to comply with                  worldwide.
regulations proposed by governments around the                      Yamaha Motor made its joint-venture company in
world — before they are implemented. On the                      India a wholly owned subsidiary in June 2001, and
technology front, the Company has developed an                   renamed it Yamaha Motor India Private Limited
original exhaust gas purification system, incorporated           (YMI). The new company aims to increase Yamaha
in both 2-stroke and 4-stroke engines, designed to               brand penetration in the market and expand the
achieve cleaner emissions. Yamaha Motor has also                 business to meet growing motorcycle demand in India.
released the EC-02 and Passol-L, new, all-electric, zero-           In China, the Company established Shanghai
emission commuter vehicles.                                      Yamaha Jianshe Motor Marketing Co., Ltd. in May
                                                                 2004. Through the new sales company, Yamaha Motor
Manufacturing Reform                                             is striving to enhance the Yamaha brand lineup,
Yamaha Motor is focusing companywide efforts on                  provide after-sales service and raise the brand image,
manufacturing reform, in order to reduce cost and                thus aiming to expand sales in the region.
deliver excellent products to consumers more quickly,
at more affordable prices.                                       Next-Generation Transportation System
   The Company established Yamaha Motor Asian                    Yamaha Motor is an active player in zero-accident
Center Co., Ltd. (YMAC) in Thailand in April 2001,               projects and other research toward eliminating traffic
in a move to hone its competitive edge in the ASEAN              collisions. The Company is producing experimental
region. YMAC is responsible for integrating and                  vehicles for the ASV (Advanced Safety Vehicle)
supervising motorcycle planning and development                  development project, organized by the Japanese
operations, as well as parts and materials production            government to improve motorcycle safety. In
and procurement for the entire Asian region. At the              November 2000, the Company developed the Yamaha
same time, Yamaha Motor Asia Pte. Ltd. (YMAP) —                  ASV-2 experimental vehicle, based on the Majesty
established in Singapore in 1998 — was converted                 250cc scooter platform. The Yamaha ASV-2 features
to a dedicated financial services center, in charge              numerous accident prevention and safety support
of payment settlement, and investment and loan                   functions, such as an infrared laser vehicle-to-vehicle
operations. Yamaha Motor plans to use the synergy                communication system to warn motorists whenever
of these companies as a springboard to manufacture               the motorcycle comes into close proximity with their
and sell ASEAN models — such as the new-genre                    automobiles.
automatic commuter vehicle Mio, Fino, NOUVO
and the newly developed sporty moped T135 —
to efficiently implement local procurement, and to
aggressively promote cross-trading. Thus, the reform

Major Markets                                                         baby boomers and Generation Y “Echo Boomers,”
                                                                      motorcycle demand in the U.S. has grown over the
Japan                                                                 past several years. In addition, demand for supersport
The flourishing scooter boom subsided once the                        models has been growing in recent years.
motorcycle helmet law was enacted; meanwhile,
the so-called “Three No Campaign”* has gained                         Europe
momentum since the 1980s. Another significant                         Europe, the birthplace of motorcycles, has a well-
factor in the declining popularity of scooters is the                 developed, solid motorcycle culture. Here, all types of
falling birth rate and consequent rapid decrease                      motorcycles enjoy great popularity, from motorized
in the youth population. In addition, consumer                        bicycles called “mopeds” to big sport bikes. With
preferences have been diversifying. Thus, in the                      deregulation of the license systems in Europe in
Japanese market, motorcycle demand has dropped to                     conjunction with the integration of the EU, it became
about 1/4 its peak level (3,280,000 units in 1982). Today,            legal in 1996 for drivers with automobile licenses to
50cc scooters, which account for about half the demand                ride motorcycles with engines smaller than 125cc.
in the domestic market, are used as daily commuter                    (Before the revision of the law, the limit was 50cc.) This
vehicles as well as in business. Also, a growing number               deregulation set off a scooter boom, stimulating an
of people, centering on middle-aged riders, now enjoy                 expansion in demand.
touring on bigger bikes and scooters.                                    Although demand for motorcycles had been
                                                                      growing year after year in Europe, negative effects
                   *The “Three No” Campaign
                                                                      arising from revisions of law, such as the change in
   In an effort to prevent motorcycle accidents and deter
                                                                      Italian legislation requiring riders of 50cc motorcycles
   reckless motorcycle riding among high school youth, in the
   1970s some high schools began promoting a “Three No”               to wear helmets, have slightly dampened demand,
   campaign with the slogans, “No motorcycle license,” “No            mainly for 125cc and smaller motorcycles.
   motorcycle riding,” and “No motorcycle buying.” The All-
   Japan High School PTA Federation supported the movement
   and spread it nationwide. However, to many people, the “no,
   no, no” message embodied an overly regimented education
                                                                      In response to the shift to China by Japanese motorcycle
   system. Backlash against the approach, combined with the           manufacturers in the 1980s, more than 10 government
   government’s introduction of a new traffic safety education        joint-venture companies were established to begin local
   curriculum, slowed the campaign in the late 1990s.
                                                                      production. In addition, local motorcycle manufacturers
                                                                      entered the market, raising the total number of producers
                                                                      in China to more than 100. Meanwhile, total motorcycle
U.S.A.                                                                demand in the country is growing, with annual
In the United States, many people enjoy cruising open                 production exceeding 13 million units (most of which
stretches of road across vast expanses of land on long,               are used as daily commuter vehicles), making China
low-riding cruiser bikes. Meanwhile, the popularity                   the largest market in the world.
of outdoor recreation and off-road racing has helped
boost the sales of off-road motorcycles in the U.S.A.
Supported by the dynamic purchasing power of

Southeast Asia                                                   India
The period from 1980 through the 1990s was the                   Since India was not affected by the currency crisis
incipient era of motorization, mainly for Indonesia,             that shook Southeast Asia, demand has continued
Thailand and Vietnam, and demand for motorcycles for             steadily upward. With annual production of more
use in the transportation of goods rose rapidly. Local           than 6 million units, India’s motorcycle market is the
joint-venture companies established by Japanese                  second largest in the world. In India, as in other Asian
manufacturers further spurred the demand growth.                 nations, fuel-efficient 4-stroke models with engine
In 1997, the currency crisis erupted in Southeast Asia,          displacement near 100cc are popular as a means of
temporarily pushing demand down. However, total                  daily transportation.
demand is now rebounding, following the recent
recovery of the region’s economies. The mainstay                 Production Bases
motorcycles in Southeast Asia are 4-stroke models with           Japan:    1st Iwata Factory at the Head Office
engine displacement of about 110cc, popular for their            Europe: France, Spain, Italy
agility, and available at affordable prices. These models        Asia:     Indonesia, Thailand, Malaysia, Vietnam,
are enjoying brisk sales to consumers in the region                      India, Pakistan, Taiwan, China
                                                                 Latin America: Brazil
looking for convenient, everyday commuter vehicles.
                                                                 Excludes completed vehicle assembly factories and factories that
                                                                 receive technical assistance from Yamaha Motor.

Major Models

YZF-R1         FJR1300AS

Roadliner      TT-R50E
               Manufacturer’s suggested retail price of Japanese model: ¥173,250

XMAX125        TMAX
               Manufacturer’s suggested retail price of Japanese model: ¥850,500

YBR125         XJR1300
               Manufacturer’s suggested retail price of Japanese model: ¥1,011,150


Marine Engines

Product Profile                                                   to power a wide range of vessels, from small inflatable
Marine engines used to propel boats can be categorized            rubber boats to medium-size cruisers, and to provide
into three types: outboard motors, stern drives                   the users with pleasure on the water.
(inboard-outboard motors), and inboard motors.
   Yamaha Motor primarily manufactures and markets                Background of the Business
outboard motors for small vessels such as pleasure                Yamaha Motor applied its small engine technology to
boats and utility boats. Outboard motors account for              produce the seven-horsepower P-7 outboard motor
more than 90% of the Company’s marine engine                      in 1960. Since then, the Company has been expanding
business.                                                         the product lineup, while focusing on improving
   Unlike automakers, who usually produce both the                power output, durability, and fuel efficiency, among
vehicle body and the engine, most manufacturers of                other features. Today, Yamaha outboard motors are
marine engines do not produce the boats themselves.               widely used in the fishing industry and for leisure
                                                                  applications. More than 90% of Yamaha outboard
                                                                  motors are exported to markets worldwide, and enjoy
   Outboard motor
                                                                  an expanding share of the global market.
   For small- and medium-size boats. The
                                                                     Yamaha outboard motors are used more commonly
   engine unit is mounted on the outside
   of the boat, and rotates the propeller to                      for leisure purposes in the United States and Europe,
   produce propulsion.                                            while they are essential in fishing and transportation
                                                                  applications in Africa and Southeast Asia. Yamaha
   Stern drive (Inboard-outboard motor)
   For small- and medium-size boats.                              Motor has created the Enduro models for utility uses,
   The engine is mounted at the stern of                          with the goal of supporting fishery and improving the
   the boat, and the drive unit is located                        standard of living in developing countries. For some
                                                                  40 years the Company’s OMDO (Overseas Market
   Inboard motor                                                  Development Operations) has been marketing products
   For large boats. The engine is installed                       designed to perform well on local waters, operating
   at the center of the hull, and the driving
                                                                  under harsh conditions within the constraints of local
   force is transmitted to the outboard
   propeller via a shaft.
                                                                  fuel supplies. OMDO has also helped improve the
                                                                  service system in the markets where it operates.

Applications (User Profile)
Outboard motors for utility applications are mounted
on a variety of boats, ranging from small utility boats to
medium-size fishing vessels. Many fishermen depend
on Yamaha Motor ’s outboard motors for their
livelihood. Yamaha Motor ’s outboard motors are
also used for coastal patrol and water transport
applications, including taxi boats.
   Outboard motors for leisure applications are used

Outboard Motors*1

          FY2006/12 regional breakdown of                                         FY2006/12 worldwide demand and
          worldwide demand*2                                                      Yamaha unit sales*2
    Rest-of-world                                                      Other companies
    320 (37.8%)                                                        510

                       Worldwide              290                                                                     Yamaha
                        demand              (33.8%)                                                  Worldwide          340
                          850                                                                         demand
                       Unit: thousands
                        (%): share of                                                               Unit: thousands


          FY2006/12 Yamaha unit sales by region
          (consolidated basis)

    160 (46.6%)

                        Unit sales
                       Unit: thousands
                      (%): share of unit

                                 80 (24.8%)

    Yamaha unit sales                                                          Yamaha sales
    (consolidated basis)                                                       (consolidated basis)
    Unit: thousands                                                            Unit: billion ¥
    350                                        340                               160                          150.6     153.7
           315        322




      0                                                                            0
          FY’04/3   ’04/12*2     ’05/12       ’06/12                                   FY’04/3   ’04/12*2    ’05/12     ’06/12

    Notes: *1 All the figures in these graphs refer to outboard motors.
           *2 Yamaha surveys
           *3 The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
              Company’s annual closing date, from March 31 to December 31. Therefore, the Company has provided twelve-month
              conversion figures (January 1, 2004 through December 31, 2004), only for reference.

Current Business Conditions — Product                          Small-size 4-stroke outboard motors and small- and
Features and Technologies                                      medium-size 2-stroke outboard motors
During its 45 years of operation, Yamaha Motor has                 Yamaha Kumamoto Products Co., Ltd.
continuously expanded its product lineup, which                    (Manufacturing subsidiary)
includes 2-stroke models ranging from 5 to 200                     Location: Yatsushiro City, Kumamoto Prefecture,
horsepower (including environmentally-friendly                     Japan
models) and 4-stroke models producing 2 to 250
                                                               Small-size 4-stroke outboard motors
                                                                   MBK Industrie (Manufacturing subsidiary)
   The Company now offers environmentally-friendly
                                                                   Location: Saint-Quentin, France
2-stroke models suitable for high-speed bass fishing
boats, while providing 4-stroke models for open-
                                                               Representative Models
sea sport fishing applications, which demand quiet
operation and high fuel efficiency. By meeting the
diverse needs of its customers in this way, Yamaha
Motor enjoys an excellent reputation in world markets.

Environmental regulations
Yamaha outboard motors for the U.S. market comply
with the 2008 exhaust emission standards of the
                                                               F350 (4-stroke outboard motor)
California Air Resources Board (CARB) — regarded               U.S. release in the summer of 2007
as the most stringent environmental regulations in the
world, earning the CARB three-star label. All Yamaha
4-stroke models with at least 50 horsepower equipped
with an electronically controlled fuel injection system
meet the CARB standards.

Production System
Medium- and large-size 4-stroke outboard motors and
large-size 2-stroke outboard motors
   Yamaha Marine Co., Ltd. (Manufacturing                      F15CMHL (4-stroke)
                                                               Manufacturer’s suggested retail price:
   subsidiary)                                                 ¥334,950
   Location: Hamamatsu City, Shizuoka Prefecture,

Personal Watercraft

Product Profile                                                      Current Business Conditions — Product
Personal watercraft (PWC) became popular in the                      Features and Technologies
United States in the 1970s, and found their way into                 Yamaha Motor’s PWC feature a high-stability body for
Japan in the 1980s. Unlike an outboard motor that uses               superb performance tearing through the water — created
propellers for propulsion, the PWC draws in water                    by applying the Company’s boat-making expertise
from the intake section located on the bottom of the                 — and a compact, lightweight yet powerful engine,
hull, pressurizes it and shoots it out from the stern                backed by the Company’s know-how and experience as
to move forward. PWC come in a variety of models,                    a marine engine maker.
ranging from one to three riders capacity. Some                         In the spring of 2002, Yamaha Motor introduced
require the rider to stand, while others are driven                  the FX140, the first model of its kind in the world to
from a seated position.                                              incorporate a 4-stroke engine. The 2003 model lineup
                                                                     included the GP1300R, featuring a 2-stroke E.F.I.*
                                                                     (Electronic Fuel Injection) engine, in compliance
   In Japan, an operator’s license for special small boats is
                                                                     with the latest environmental standards. In 2004, the
   required to operate personal watercraft.
                                                                     Company released the VX110, designed to meet more
                                                                     diverse customer requirements. Like the motorcycle
Applications (User Profile)                                          lineup, Yamaha Motor will continue to expand both
The popularity of PWC has spread mainly among                        types of products: 2-stroke models for excellent
youths who ride them for fun and recreation. However,                acceleration performance, and 4-stroke models
in recent years, larger, more powerful models have                   offering more economical, quieter operation to meet
been released, influenced by the introduction of jet                 the diverse needs of users who enjoy cruising on the
boats, among other factors. Today, PWC are not only                  water.
used for riding fun but also for towing water skiers,                                   *E.F.I. is a trademark of Toyota Motor Corporation

thus offering a wider leisure range. PWC are also used
for rescue operations by lifeguards around the world.                Environmental concerns
                                                                     To reduce impact on the global environment, Yamaha
Background of the Business                                           2-stroke models are equipped with an exhaust gas
In 1986, Yamaha Motor developed and introduced a                     treatment system that uses a specially-developed
PWC that people could sit on and ride like a motorcycle              catalyst, while 4-stroke models incorporate an
on water. Until then, cruising and fishing were the                  electronic fuel injection system. Both 2- and 4-stroke
mainstream of marine leisure, but the introduction of                models meet U.S. EPA (Environmental Protection
PWC created new demand for marine products that                      Agency) regulations and Japan Boating Industry
offer the fun of riding personal craft on water.                     Association voluntary regulations.

    2006 regional breakdown of                                                   FY2006/12 Yamaha unit sales by region
    worldwide demand*1

    Rest-of-world                                                             Rest-of-world
    18,100 (15.2%)                                                            11,800 (27.6%)

3,900 (3.3%)
  Europe                   Worldwide
   9,100                                                                                               Unit sales
                            demand                                                                    42,800 units
  (7.7%)                  118,900 units                                                                                   U.S.A.
                                                                                                       (%): share of
                            (%): share of                                                               unit sales        31,000
                              demand                                                                                     (72.4%)

                          87,800 (73.8%)

    Yamaha unit sales                                                            Yamaha sales
    (consolidated basis)*2                                                       (consolidated basis)*2
    Units                                                                        Unit: billion ¥

    45,000                                    42,800                                50                                      47.0
    40,000                                                                          45
                         36,500                                                                                  40.3
               34,700                                                               40
    35,000                                                                                           36.6
                                                                                    35    33.7
    10,000                                                                          10
     5,000                                                                           5

        0                                                                            0
             FY’04/3    ’04/12*2     ’05/12   ’06/12                                     FY’04/3   ’04/12*2     ’05/12     ’06/12

      Notes: *1 Yamaha surveys
             *2 Includes CKD units for overseas production
             *3 The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
                Company’s annual closing date, from March 31 to December 31. Therefore, the Company has provided twelve-month
                conversion figures (January 1, 2004 through December 31, 2004), only for reference.

Raising safety awareness                                        Representative Models
A small number of PWC users are causing problems by
operating PWC without a proper license, not wearing
lifejackets, generating noise pollution, and ignoring
marine etiquette and courtesy. In a bid to ensure the
sound growth of the industry, the Personal Watercraft
Safety Association (PWSA) was formed in February
1990 in Japan, with the cooperation of the police and
pertinent government agencies. Yamaha Motor expands
                                                                MJ-VX (4-stroke)
on the work of the PWSA by organizing various activities        Manufacturer’s suggested retail price of Japanese model:
nationwide, designed to enhance users’ awareness and
respect for manners on the water. These include efforts
to develop effective rules and regulations, as well as
cleanup campaigns, safety seminars and water patrols.

Production Bases

Engines:   Yamaha Marine Co., Ltd.
           (Manufacturing subsidiary)
           Location: Hamamatsu City, Shizuoka                   MJ-FX Cruiser High Output (4-stroke)
                                                                Manufacturer’s suggested retail price of Japanese model:
                     Prefecture, Japan                          ¥1,896,720

Hulls:     Yamaha Motor Manufacturing
           Corporation of America (YMMC)
           (Manufacturing subsidiary)
           Location: Georgia, U.S.A.

           Tennessee Water Craft, Inc.
           (Manufacturing subsidiary)
           Location: Tennessee, U.S.A.


Product Profile                                                           match and complement each other. Overseas, boat
Boats are used for two major purposes: business and                       manufacturers usually produce only boats, and marine
leisure. Boats for commercial applications can be                         engine makers generally manufacturer only engines.
categorized into utility boats and fishing boats,                         Companies that produce both can be found exclusively
and the hulls of these boats must be designed to fit                      in Japan.
the requirements of each region’s fishing methods.                           In 1965, Yamaha Motor began producing sailboats
Leisure-use boats are also classified into two categories:                and fishing boats. The Company has thus grown into
powerboats (ranging from small trailer-pulled boats                       a full-spectrum marine manufacturer, offering a full
to large cruisers) and sailboats (ranging from solo                       lineup of boats and outboard motors to meet the diverse
dinghies to large sailing cruisers). Yamaha Motor                         needs of its customers.
manufactures and supplies products in all these
categories.                                                               Current Business Conditions — Product
                                                                          Features and Technologies
   In Japan, an operator’s license for small boats is required
                                                                          Delivering Reliable Quality and High Performance
   to operate an engine-powered boat or sailboat (although
   no license is required if the boat is shorter than 3 m and the         Yamaha Motor offers a high level of quality, safety and
   engine output is less than 1.5kW). Boat licenses are classified        performance in its full lineup of boat products, ranging
   into three types: Class I, Class II, and Special Small Boat,           from fishing boats and utility boats for commercial
   according to the boat size and navigation distance. There are
                                                                          applications to pleasure boats for leisure and
   five qualification levels in the three license categories.
                                                                          recreational activities.

Applications (User Profile)                                               High-Precision NC Technology for Machining and
Commercial/utility boats play a vital role in the                         Molding
everyday lives of fishermen. Leisure boats, on the other                  Complex hull shapes are designed to achieve maximum
hand, are used for sport fishing, cruising, water skiing,                 speed, safety and operational capability. To fabricate
and wakeboarding.                                                         products exactly as intended by the designers and
                                                                          engineers, Yamaha Motor employs advanced molding
Background of the Business                                                techniques using NC technology. This enables highly
Foreseeing the growth of boat demand for marine                           accurate molding in order to produce original
sports and leisure, Yamaha Motor actively researched                      male hulls with precise specifications based on three-
and developed FRP (Fiberglass Reinforced Plastics) as a                   dimensional (3-D) design data. Thus, NC technology
new material for hulls, jointly with Nippon Gakki Co.,                    completely eliminates any waste generated when
Ltd. (presently Yamaha Corporation), and began                            molding hulls using design drawings, and realizes
producing and marketing FRP boasts in 1960.                               precisely the production the original designers and
   In the same year, Yamaha Motor started producing                       engineers envisioned.
outboard motors. Since then, Yamaha Motor has been
expanding its marine product lineup, consisting of
boats and marine engines that are designed to

    FY2006/12 domestic demand*1                                                           FY2006/12 Yamaha unit sales
                                                                                          (consolidated basis)
    Fishing boats
    and utility boats

                                                                                  Fishing boats and
                                                                                  utility boats
                                                                                  (33.3.%)                     Unit sales
                            demand                   Boats and sailboats                                       1,200 units
                           4,160 units               3,400                                                      (%): share of
                                                                                                                 unit sales

                                                                                                                                  Boats and sailboats

    Yamaha unit sales (consolidated basis)                                                Yamaha sales (consolidated basis)

    Units                                                                                 Unit: billion ¥

     2,000                                                                                   14                                     13.2
             1,700       1,650                                                               12                           11.3
                                   1,490                                                           10.5
                          750               1,200
     1,000                                  400

             1,030                 1,030                                                      4
      500                 900
                                                            Fishing boats and
                                                            utility boats
        0                                                   Boats and sailboats               0
             FY’04/3    ’04/12*2   ’05/12   ’06/12                                                FY’04/3   ’04/12*2     ’05/12    ’06/12

      Notes: *1 Yamaha surveys
             *2 The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
                Company’s annual closing date, from March 31 to December 31. Therefore, the Company has provided twelve-month
                conversion figures (January 1, 2004 through December 31, 2004), only for reference.

Original Design Technology, Extensive Analysis and                                        repeatedly conducts durability tests using prototypes.
Verification                                                                              This is part of the Yamaha Motor commitment to
In developing its boat hulls, Yamaha Motor uses a                                         extensive analysis and verification before introducing
performance simulation and design system called                                           new products to the market.
Y.P.D.S. (Yamaha Performance Development System)
— developed based on data accumulated over many
years — together with 3-D CAD systems, in a
comprehensive pursuit of higher performance and
precision. The Company also utilizes FEM computer
structural analysis and simulation technologies to
examine various loads applied to the hulls, and

Leading-Edge Technologies for Next-Generation                Representative Models
Yamaha Motor actively develops and deploys leading-
edge technologies designed to enhance safety and
reduce environmental impact with its next-generation
   In the effort, the Company developed exclusive
FOAMAP (Foam Manufacturing Process) technology
that enables single-piece, triple-structure hulls. In        YAMAHA 32 CONVERTIBLE
                                                             Manufacturer’s suggested retail price: ¥38,088,120
FOAMAP production, high-density polyurethane is              (equipped with mandated safety and other equipment)

injected between FRP laminated boards under high
pressure. This method realizes superb buoyancy and
rigidity, while significantly reducing the generation
of environmentally damaging VOC (Volatile Organic
Compounds) in the manufacturing process. Another
original technology, the VARTM (Vacuum-Assisted
Resin Transfer Molding) process — a closed molding
process — used in the manufacture of bridges,
achieves a 90% reduction in VOC in the molding
process compared to the conventional method, thus
                                                             F.A.S.T. 26 S/D
helping promote environmentally-conscious                    Manufacturer’s suggested retail price: ¥7,097,370
                                                             (equipped with mandated safety and other equipment)

Production System
Large boats:
   Shido Factory, Marine Operations
   Location: Sanuki City, Kagawa Prefecture, Japan

Small boats, fishing boats, utility boats:
   Yamaha Amakusa Works. Co., Ltd.
   Location: Himedo-cho, Amakusa-gun,
               Kumamoto Prefecture, Japan

Fishing boats, utility boats:
   Yamaki Boat Processing Co., Ltd.
   Location: Yakumo-cho, Yamakoshi-gun, Hokkaido,

Swimming Pools

Product Profile                                                          Current Business Conditions — Product
In Japan, school swimming pools, competition pools,                      Features and Technologies
children’s pools, and pools for leisure and heath                        From the time the Company successfully applied its
applications form the main demand in this segment.                       FRP boat production technology to commercialize
   By material, pools can be categorized into FRP                        Japan’s first FRP swimming pool in 1974, it has
(Fiberglass Reinforced Plastics) pools, metal pools, and                 delivered more than 23,000 swimming pools
concrete pools. Yamaha Motor’s pools are made of FRP.                    throughout Japan.
                                                                            Since Yamaha FRP swimming pools are individually
Applications (User Profile)                                              manufactured in the factory and assembled on site,
There are about 40,000 swimming pools installed in                       the construction period is shortened. Meanwhile,
Japan, of which about 30,000 are school swimming                         the Company’s integrated in-house production system
pools. The rest are operated and managed by                              ensures high product quality.
municipalities, fitness clubs, and swimming clubs,
among other organizations.
                                                                            Construction periods for a 25-m swimming pool, by material
                                                                            type (Yamaha surveys)
Background of the Business
                                                                            Concrete: Approx. 45 days
Yamaha Motor commercialized Japan’s first all-FRP                           Metal:   Approx. 20 days
pool in 1974.                                                               FRP:     Approx. 14 days

   FRP is a strong, lightweight material that resists
corrosion by rusting or chemicals, and does not crack                    Special Temporary Pools Constructed for the 2001
easily. Since the introduction of the first FRP swimming                 World Swimming Championships
pool, Yamaha Motor has been steadily solidifying its                     The 9th FINA World Swimming Championships held
business foundation as a leading pool maker in Japan.                    in Fukuoka in the summer of 2001 featured Yamaha
                                                                         Motor’s special FRP temporary pools: the main pool for
                             Reference                                   competition swimming and synchronized swimming,
   Characteristics of pool by material type
                                                                         as well as the warm-up pool and water polo pool. The
   FRP:       Strong and lightweight, FRP offers superior
                                                                         key advantage of these special temporary pools is that
              workability that reduces construction time by
              enabling on-site assembly and installation of              they can be set up in existing facilities, such as
              factory-fabricated pools.                                  convention halls, to be used only for the period of the
   Metal:     Coating required to protect the material results in        event. Since they eliminate the need to construct a new
              high running costs.
                                                                         dedicated facility, total costs are slashed. The warm-
   Concrete: Initial costs are low, but concrete pools require
              periodic repainting, driving up running costs.
                                                                         up pool used at the World Swimming Championships
                                                                         was reinstalled at the Okayama City Higashiyama Pool
                                                                         facility after the competition event.

   Swimming pools need to receive official
international approval for use in the world
championship competition. The main pool — “Swim
21” was the world’s first special temporary FRP 50-m
swimming pool to win this internationl approval.
   Following the successful conclusion of the World
Swimming Championships in Fukuoka, marked by
a number of competition records, Yamaha Motor                 “School 25” pool for schools

began receiving inquiries about its pools from around
the world. The “Swim 21” pool won the Japan Good
Design Award Golden Prize for 2001.

Pool Accessories                                                                    Automatic vertical filtering system

In addition to swimming pool units, Yamaha Motor
also actively develops and markets pool-related
equipment and systems. By offering quality products
including the Poolside Shelter and various high-
performance automatic vertical filtering systems, the
Company provides total swimming pool system and
environment solutions to its customers.

Maintenance and Management Services
Based on its installation track record and long               “Swim 21” main pool constructed for the 9th FINA
                                                              World Swimming Championships
accumulated expertise in this field, Yamaha Motor also
offers maintenance and management services for public

Production System
Arai Factory
                                                                                                      Unit pool “Kira-Kira”
Location: Arai-machi, Hanama-gun,
         Shizuoka Prefecture

FY2006/12 domestic pool demand by material*1                                  FY2006/12 Yamaha share
Pool size: over 20m                                                           for domestic FRP pools*1
                                                                              Pool size: over 20m
Concrete and other
materials 27                                                                  Other companies’
(10.5%)                                                                       pools

                       Domestic                                                                Domestic FRP
                       demand             FRP                                                  pool demand
                       256 units          129                                                    129 units
           Metal                        (50.4%)
            100        (%): share of                                                                (%): share of
          (39.1%)                                                                                   unit demand

                                                                                               Yamaha pools
                                                                                                114 (88.4%)

Yamaha sales
(consolidated basis)
Unit: billion ¥


          5.4        5.4





        FY’04/3   ’04/12*2     ’05/12    ’06/12

  Notes: *1 Yamaha surveys
         *2 The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
            Company’s annual closing date, from March 31 to December 31. Therefore, the Company has provided
            twelve-month conversion figures (January 1, 2004 through December 31, 2004), only for reference.

All-Terrain Vehicles & Side-by-Side Vehicles

Product Profile                                                           Yamaha Motor meets diverse needs with a wide
With their superb maneuverability on such varied                      range of products, including utility, sports, and youth-
terrain as dirt, mud, sand, snow, and ice, all-terrain                oriented models. In 2003, the Company introduced the
vehicles (ATVs) have been called 4-wheel off-road                     YFZ450, the first Yamaha 4-stroke sport ATV featuring
buggies. And, since they can go anywhere, they are                    a liquid-cooled DOHC 5-valve plated-cylinder engine.
capable of handling a variety of jobs in an array of                      In May 2006, the Company released the Grizzly 700
fields — from work under tough conditions to                          in overseas markets. This all-new 4WD ATV features an
agricultural applications requiring agility and                       electronic power steering (EPS) system, creating a new
maneuverability, and transportation uses demanding                    product value proposition.
powerful performance and versatility.                                     It follows in the footsteps of the Raptor 700, the top-
   ATVs are especially popular in North America, with                 of-the line sport ATV with an electronically-controlled
its vast expanse of land, where they are used for sports,             fuel injection system, launched in July 2005.
leisure touring, and utility work.                                        Yamaha Motor has also been marketing side-by-side

                             Reference                                vehicles in North America since 2003, with the Rhino
   In Japan, ATVs cannot be operated on public roads and other        660. The Company then moved to expand the lineup
   public areas where they are prohibited by the government,          and stimulate new market demand by releasing the
   such as national parks.
                                                                      Rhino 450 in September 2005.

Application (User Profile)                                            Production System
Broken down by application, 20% of ATVs are used for                  Yamaha Motor Powered Products Co., Ltd.
utility work, 60% for leisure activities such as hunting,             (Manufacturing subsidiary)
and 20% for sports such as off-road riding. Rental ATVs               Location: Kakegawa City, Shizuoka Prefecture, Japan
are available at some resorts.
                                                                      Yamaha Motor Manufacturing Corporation of America
Background of the Business                                            (YMMC) (Manufacturing subsidiary)
ATVs basically incorporate motorcycle technologies,                   Location: Georgia, U.S.A.
especially off-road bike technology. Sales of Yamaha
ATVs began in the United States in 1984, and in Japan                 Representative Models
in 1986.

Current Business Conditions — Product
Features and Technologies
The United States — with about 80% of worldwide
demand — has particularly large amounts of ranches,
stretches of unpaved roads and natural terrain such
as fields and marshes where ATVs perform well. New                    Raptor 700 (Overseas model)

users account for about 40% of total ATV riders in the
United States.

Grizzly 700 (Overseas model)                                                          Rhino 660 (Overseas model)

     FY2006/12 regional breakdown of                                               FY2006/12 regional breakdown of Yamaha
     worldwide ATV demand*1                                                        ATV unit sales (consolidated basis)

     270 (26.5%)                                                                   Rest-of-world
                                                                                   76 (33.6%)

                          Worldwide                                                                    Unit sales 227
                         demand 1,020
                           Unit: thousands
                                               U.S.A.                                                   Unit: thousands    U.S.A.
                                                750                                                      (%): share of      151
                            (%): share of                                                                  unit sales
                               demand         (73.5%)                                                                     (66.4%)

     Yamaha unit sales for ATVs and SSVs                                           Yamaha sales for ATVs and SSVs
     (consolidated basis)                                                          (consolidated basis)

     Unit: thousands                                                               Unit: billion ¥
        300                                                                          180                                    168.8
                                      24                                                                          155.7
                5          15
        250                                      36                                  150
        200                                                                          120

        150                                                                           90
                          258         261
               246                               227
        100                                                                           60

         50                                                                           30
                                                         ATV                           0
              FY’04/3   ’04/12*2     ’05/12     ’06/12                                     FY’04/3   ’04/12*2    ’05/12     ’06/12

        Notes: *1 Yamaha surveys
               *2 The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
                  Company’s annual closing date, from March 31 to December 31. Therefore, the Company has provided twelve-month
                  conversion figures (January 1, 2004 through December 31, 2004), only for reference.


Product Profile                                                      While 2-stroke engines remain the mainstream in
The snowmobile originated in Canada. Its body                     the snowmobile industry, Yamaha Motor has been
incorporates two skis at the front and two track belts            taking the initiative in deploying 4-stroke engines.
at the rear for propulsion. It has developed into a vital         In 2002, the Company released its first 4-stroke
means of transportation for people in snowy areas, and            snowmobiles, the RX-1 and RX-1 Mountain. These
also a major source of winter sports enjoyment and                products have earned high acclaim for their excellent
leisure. In business applications, snowmobiles are used           riding and environmental performance. In 2004,
by ski resort patrols, and for transporting cargo. For            Yamaha Motor launched the second-generation
leisure, they are used for touring, cruising and racing.          4-stroke model, the RS Vector ER, following in 2006
                                                                  with the third-generation PHAZER and PHAZER
                                                                  Mountain Life models, thus solidifying the popularity
   Operation of snowmobiles is prohibited on public roads,
   private property and government-designated restricted          of Yamaha 4-stroke snowmobiles.
   access areas, such as national parks.                             Yamaha Motor entered the All-Japan Snowmobile
                                                                  Championship race with 4-stroke models for the first
                                                                  time in 2004, and won overall victory in 2005. In 2006,
Applications (User Profile)                                       the Company expanded the scope of its snowmobile
Businesses that use snowmobiles include ski resorts,              racing activity to the United States, the mecca of
hotels, lodging houses and the forestry industry. In              snowmobile racing, capturing its first victory there in
addition, people ride snowmobiles for leisure in snowy            the third round of the WPSA Power Sports Snowmobile
areas.                                                            Tour series.
                                                                     Then, in 2007, the Company marketed the FX
Background of the Business                                        Nytro R-TX and FX Nytro M-TX ER, featuring a
The first Yamaha snowmobile was developed in 1968,                newly designed chassis and incorporating the same
based on motorcycle technologies, particularly small              engine mounted on the RS Vector ER, but with an
engine technology. In 1970, Yamaha Motor introduced               electronically controlled fuel injection system. With
a leisure-use snowmobile model, thus pioneering the               racing technologies built in, these new models realize
new field of recreational and sport snowmobiling. Since           superb performance on rough trails and fresh deep
then, the Company has released many new models.                   snow. The Company continues to bring excitement to
Yamaha Motor is the only company in Japan that                    the world of winter sports with its race-tested 4-stroke
manufactures complete snowmobile units in-house.                  snowmobiles.

Current Business Conditions — Product
Features and Technologies
Since Yamaha Motor introduced its first snowmobile,
the SL350, in 1968, the Company has been providing a
wide range of products to meet user demand for winter
sport, leisure and business applications. This year
marks the 40th anniversary for Yamaha snowmobiles.

2007 regional breakdown of                                                    FY2006/12 Yamaha unit sales
worldwide demand*1                                                            (consolidated basis)
Russia                                 Japan
18.0 (10.5%)                           1.0 (0.6%)                                                                    Japan 0.6 (2.0%)

(10.5%)               Worldwide                                                                     Unit sales
                      demand                                                                          33.0
                        174              U.S.A.
                                          92.0                                                     Unit: thousands
                     Unit: thousands    (53.5%)                                                     (%): share of
          Canada      (%): share of                                                                   unit sales
            46.0         demand
                                                                                                  32.4 (98.0%)

Yamaha unit sales                                                             Yamaha sales
(consolidated basis)                                                          (consolidated basis)
Unit: thousands                                                               Unit: billion ¥

   35                                       33.0                                 30

   30                          28.0                                                                          23.9

   20                                                                                             16.5
          16.0                                                                   15



    0                                                                             0
        FY’04/3   ’04/12*2     ’05/12      ’06/12                                     FY’04/3   ’04/12*2    ’05/12       ’06/12

  Notes: *1 Yamaha surveys
         *2 Sales in fiscal period ended December 31, 2004 were based on an irregular nine-month accounting period.

Production System
1st Factory at Yamaha Motor Head Office

Representative Models

FX Nytro M-TX-ER                                         PHAZER M-TX
Manufacturer’s suggested retail price: ¥1,354,500        Manufacturer’s suggested retail price: ¥942,900

Golf Cars

Product Profile                                                 Current Business Conditions — Product
Previously, hand-pulled karts were predominant on               Features and Technologies
golf courses. However, as business and management                   Yamaha Motor introduced the Turf Joy G15-A
conditions at the golf courses have changed over recent         5-passenger golf car in 1994, and followed with the
years, demand has been growing for golf cars that save          Turf Liner G17-A in 1996, which was based on the
labor, let golfers transport their own clubs, reduce the        G15-A and incorporates an electromagnetic induction
burden on caddies, and encourage smoother, more                 system*1. Next, the Company introduced the Turf
enjoyable rounds.                                               Liner G17-E — with a battery-powered electric motor
   Yamaha Motor offers an extensive lineup of golf cars         for environmentally-friendly operation — in 2000. It
with different versions designed to accommodate one,            has attracted attention in the industry for its quiet but
two, or five riders. The Company has developed both             powerful performance. In 2005, the Company released
gasoline engine and electric motor models.                      the G30A/E and G31A/AP with five color variations
                                                                and a host of options, including a sliding window
Applications (User Profile)                                     shield. In 2006, the Company upgraded the Turf Liner
In Japan, many golf courses use five-passenger golf cars        G30E by incorporating a new EV controller, designed
to increase management efficiency and meet customers’           for enhanced comfort and ease of operation.
needs. These models carry players and caddies in                    Yamaha Motor released The Drive — featuring the
addition to golf clubs.                                         industry’s first mechanical wet brake*2 — in the United
   In the United States, where golf is played more              States in 2006, and has been marketing it aggressively.
casually and commonly, the demand is highest for two-           It was released in Japan in April 2007 as the YDR to
passenger models.                                               respond to changes in the way Japanese people enjoy
                                                                their golf.
Background of the Business                                      *1 Electromagnetic induction system
                                                                   Yamaha Motor’s electromagnetic induction system uses a sensor
In 1972, Yamaha Motor began developing a land car for
                                                                   mounted on a golf car to detect and automatically trace the
use at the Company’s Tsumagoi resort (Kakegawa City,               electromagnetic field generated by AC current flowing through
                                                                   a cable buried underground. It offers a high level of safety, and
Shizuoka). Later, the Company started developing golf              enables remote-control operation of the golf car.
cars, and introduced the YG292 two-passenger gasoline           *2 Mechanical wet brake
engine golf cars in 1975. Since then, the Company’s                A wet-type multi-disc brake system. Multiple brake discs are
                                                                   installed inside the transmission case, and braking operation
golf car business has expanded. To respond to growing              presses these discs to provide braking force.
demand, Yamaha Motor constructed a plant in Georgia
in the U.S. in 1988 for the production of two-passenger         Production System
golf cars, in addition to the plant for the manufacture         Yamaha Motor Powered Products Co., Ltd.
of five-passenger golf cars in Japan. With both plants          (Manufacturing subsidiary)
producing the popular golf cars, cumulative production          Location: Kakegawa City, Shizuoka Prefecture
reached one million units.
                                                                Yamaha Motor Manufacturing Corporation of America
                                                                (YMMC) (Manufacturing subsidiary)
                                                                Location: Georgia, U.S.A.

Representative Models

Turf Liner G30E                                                                        YDR(Japan)/The Drive(U.S.A.)

     FY2006/12 regional breakdown of                                                FY2006/12 Yamaha unit sales
     worldwide demand*3                                                             (consolidated basis)
   Europe/Australia                          Rest-of-world 13.0 (6.6%)
   9.0 (4.6%)                                                                Rest-of-world
                                                                             3.0 (7.2%)
                                                                             Europe/                             Japan
   Japan                                                                     Australia                           6.5 (15.7%)
   10.0 (5.1%)                                                               3.0 (7.2%)

                           Worldwide                                                                     Worldwide
                          demand 197                                                                    demand 41.5
                           Unit: thousands                                                              Unit: thousands
                            (%): share of                                                                (%): share of
                               demand                                                                       demand

                          North America                                                                 North America
                          165.0 (83.8%)                                                                  29.0 (69.9%)

     Yamaha unit sales                                                              Yamaha sales
     (consolidated basis)                                                           (consolidated basis)
     Unit: thousands                                                                Unit: billion ¥

         50                                                                            25

                                      41.0        41.5
         40                                                                            20
                 35.6     35.8                                                               18.1
         30                                                                            15

         20                                                                            10

         10                                                                             5

          0                                                                             0
              FY’04/3   ’04/12*4     ’05/12      ’06/12                                     FY’04/3   ’04/12*4    ’05/12   ’06/12

        Notes: *3 Yamaha surveys
               *4 Sales in fiscal period ended December 31, 2004 were based on an irregular nine-month accounting period.


Product Profile                                               the inverter-type generator is significantly lighter and
Generators are used in utility applications and as            smaller, and capable of providing quality electricity
emergency power sources. Use of generators for leisure        very similar to a commercial power source. With these
purposes has also been increasing in recent years.            characteristics, the inverter-type generator can safely
They use engines to produce electricity, powering             power personal computers and microcomputer-driven
electric equipment and appliances outdoors where a            precision electronic equipment, and thus is expected to
commercial power supply is not available. Yamaha              find application in a broad range of fields.
Motor offers a wide range of products, mainly                     Yamaha Motor is also introducing all-new
4-stroke models, ranging from 1 kVA to 6 kVA class.           generators for leisure uses. These models feature an
   Sales of high-performance inverter-type generators,        attractive rounded design and easy-to-use control
which can be used to power precision machines, have           panels.
been growing in recent years.                                     Demand for generators as an emergency backup
                                                              power source has been growing in recent years, due to
Applications (User Profile)                                   rising awareness of the need for disaster preparedness.
For leisure purposes, generators are used for camping             Meanwhile, the Company is actively incorporating
with family or friends, and for do-it-yourself home           environmental features in its generators to meet the
improvement work. Commercially, they supply                   voluntary regulations set by the Japan Land Engine
power to electric equipment and lighting systems              Manufacturers Association, and other strict emissions
at construction sites. Generators are also utilized           standards adopted around the world. The Company is
as emergency power sources in a variety of fields,            also focused on the development of quiet models.
reflecting rising concerns for disaster preparedness.
                                                              Production System
                                                              Yamaha Motor Powered Products Co., Ltd.
Background of the Business
                                                              (Manufacturing subsidiary)
Yamaha Motor began developing generators based
                                                              Location: Kakegawa City, Shizuoka Prefecture
on its small engine technology, and introduced its
first 2-stroke model in 1973. In 1977, the Company            Fuzhou Jiaxin Soqi Power Products Co., Ltd.
released a 4-stroke model. Yamaha Motor has since             Location: Fujian, China
been expanding its lineup of generator models for both
business and leisure uses.                                    Representative Models

Current Business Conditions — Product
Features and Technologies
The Yamaha generator lineup ranges widely, from
lightweight compact models to large business-use
models. They are used around the world for their high
output and quiet operation.
   The Company has recently introduced inverter-
type generators. Compared to the conventional system,         EF900iS                                  EF2500i
                                                              Manufacturer’s suggested retail price:   Manufacturer’s suggested retail price:
                                                              ¥134,400                                 ¥207,900

Snow Throwers

Product Profile                                                YS-870J, sold in 2004 — are highly rated by users for
Snow throwers are used to clear snow from front yards          their excellent performance.
and roads in snow-bound areas such as the Hokkaido,                In 2006, Yamaha Motor released the YT1280/1390
Tohoku, Kita-Kanto, Hokuriku, Koushinetsu and Sanin            series with more horsepower, developed based on the
regions in Japan. Yamaha Motor offers various snow             previous YT1080/1290 series business-use models.
thrower models, from compact home-use units to large
models suited for business operators.                          Production System
                                                               Engines: Yamaha Motor Powered Products Co., Ltd.
Applications (User Profile)                                                (Manufacturing subsidiary)
Home-use snow throwers serve to remove snow from                           Location: Kakegawa City, Shizuoka
the entrances of homes and garages, while business-use                               Prefecture, Japan

models are utilized to remove snow from storefronts                        Yamaha Motor Taizhou O.P.E. Co., Ltd.
and large parking areas.                                                   Location: Jiangsu, China

Background of the Business                                     Representative Models
To relieve people in snow-bound regions from the
exhausting task of snow removal, Yamaha Motor
developed snow throwers based on the small engine
technology gained through producing motorcycles, and
introduced its first snow thrower in 1978. Since then,
Yamaha snow throwers have become so popular that
they are simply known as “the blue snow throwers” for
their product color.                                           YS-1070
                                                               Manufacturer’s suggested retail price: ¥501,900

Current Business Conditions — Product
Features and Technologies
Yamaha Motor offers a total of 10 snow thrower
models, ranging from a 6-horsepower home-use unit
to a 13-horsepower business-use model. By applying
snowmobile manufacturing expertise and materials —
such as the resin used in the body and other parts, and
the tracks, which are designed to withstand very low
temperatures — the Company is working to enhance
the cold weather performance of its snow throwers.
   Yamaha snow throwers — such as the low-noise
YS-870 introduced in 2001, the YS-1070, released in
2002, the YS-1390A/AR, marketed in 2003 and the

Racing Karts

Product Profile                                                  15,000 kart license holders. Yamaha Motor believes that
There are many types of karts, ranging from go-karts             providing driving pleasure to more people is one of its
used in amusement parks to full-fledged competition              social missions.
racing karts.
   Many people enjoy the karts as entry-level racing             Current Business Conditions — Product
machines, the first step on the road to more challenging         Features and Technologies
motorsports competitions, with Formula One at the                The only Japanese manufacturer that produces kart
apex. For both racing and leisure purposes, kart riding          engines in-house, Yamaha Motor markets these engines
events and racing contests are held on dedicated kart            worldwide.
courses. A racing kart is equipped with only the bare               The Company is working hard to promote karts.
minimum required for the machine to run — the                    The Yamaha Kart Works Team has trained many noted
engine, tires and a seat — and it is very close to the           professional racers active in Japan and overseas,
ground. Therefore, karts offer a special kind of speed           including one-time Formula One drivers Aguri Suzuki
thrill that makes drivers feel like they are going faster        and Toranosuke Takagi.
than they actually are.                                             An agreement to strengthen the business tie-up with
                                                                 Toyota Motor in 2000 also calls for the two companies
Applications (User Profile)                                      to collaborate in motorsports. One such joint effort is
Racing karts are popular among people of all ages,               the Toyota-Yamaha Scholarship System, established
with the kids and teens segment (8-15 years) expanding           to develop a crop of young and talented racing kart
rapidly in recent years, primarily because more                  drivers.
rental kart courses are being built nationwide. Racing
competitions held year-round — for competitors                   Production System
ranging from novices to international-class drivers —            Engines:Yamaha Motor Powered Products Co., Ltd.
are another big draw.                                                       (Manufacturing subsidiary)
                                                                            Location: Kakegawa City, Shizuoka

Background of the Business
Capitalizing on its motorcycle technology, in 1973
Yamaha Motor developed and marketed its first
complete kart, equipped with both an engine and frame
manufactured in-house. In 1974, the Yamaha SL (Sports
and Leisure) Kart Club was launched to help
popularize the kart sports. Today, the Club has about

    Toyota/Yamaha Alliance

    Since 2000, Yamaha Motor has been operating the
    Toyota/Yamaha Step-up System jointly with Toyota
    Motor in an effort to vitalize motorsports and support
    drivers who aspire to greater racing goals. This year,                                                           FORMULA CAR
    Kazuki Nakajima, who successfully moved up to the
    Formula Toyota Race in 2003 using the Step-up System,
                                                                                                        Formula Nippon
    joined the Williams Toyota F1 Team.
                                                                                                                                 Toyota provides support
                                                                                                                                 to talented drivers.
                      Step-up System
                                                                      (5) FTRS
                                                                          Scholarship                    Formula Toyota
                                                                                                    Participation in FCJ races
                                                 (4) Participation in
                               Developing            Overseas Races
                               skilled drivers                                 Step up
                                                      International                              Formula Toyota School Audition
                           Discovering      (3) Participation as
                           talented drivers     Works Team Member
      (2) Scholarship                          All Japan Championship
                                                        Races                   KART
                                        Junior/Regional Championship Races

                           Vitalizing motorsports
                                        (1) SL Races and Toyota-sponsored
                                            All Japan Races
                                                      SL Races

                                                     Rental Karts

Representative Models

KT100SD                        KT100SEC                               KT100SEJ
Manufacturer’s suggested       Manufacturer’s suggested               Manufacturer’s suggested
retail price: ¥103,950         retail price: ¥156,450                 retail price: ¥156,450

Surface Mounters & Industrial Robots

Product Profile                                                                    machines. Yamaha Motor mainly develops and
Yamaha Motor’s IM (Intelligent Machinery) business is                              manufactures general-purpose, medium-size surface
mainly responsible for two types of products: surface                              mounters. Yamaha high-performance machines can
mounters and industrial robots.                                                    mount electronic components of various sizes and
   Surface mounters are robots which are designed                                  shapes on printed circuit boards at high speed and with
to mount electronic components on printed circuit                                  high precision.
boards for use in cellular phones, personal computers                                    Meanwhile, industrial robots can be divided into
and other electronic products. These devices can                                   three categories: single-axis robots used for parts
be classified into high-speed and general-purpose                                  transportation and assembly, Cartesian robots designed

    FY2006/12 regional breakdown of                                              FY2006/12 Yamaha unit sales
    worldwide demand*1                                                           (consolidated basis)
    Surface mounters                                                             Surface mounters
                                               Japan                                                                        Japan
                                               2,200 (12.5%)                                                                647 (21.9%)

                          Worldwide                                                                   Unit sales
                           demand                                                                     2,951 units
                         17,600 units
                                                                                                       (%): share of
                          (%): share of                                                                 unit sales

                          Overseas                                                                     Overseas
                       15,400 (87.5%)                                                                2,304 (78.1%)

    Yamaha unit sales (consolidated basis)                                       Yamaha sales (consolidated basis)
    Surface mounters                                                             Industrial robots and surface mounters
    Unit: thousands                                                              Unit: billion ¥

      3.5                                                                           50
                                                                                                     44.0                43.4
      3.0                                   2.95                                                                 40.7
                                   2.65                                             40
      2.5                                                                                 33.5




      0.0                                                                            0
            FY’04/3   ’04/12*2     ’05/12   ’06/12                                       FY’04/3   ’04/12*2     ’05/12   ’06/12

      Notes: *1 Yamaha surveys
             *2 The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
                Company’s annual closing date, from March 31 to December 31. Therefore, the Company has provided twelve-month
                conversion figures (January 1, 2004 through December 31, 2004), only for reference.

to perform more advanced tasks, and horizontal multi-          industry’s highest throughput of 105 thousand chips
joint (SCARA) robots, which can perform complex jobs           per hour. Yamaha Motor has applied an in-house
such as tightening screws.                                     company system to its IM Operations since April 2000,
                                                               enabling speedier, more market-responsive decision-
Applications (User Profile)                                    making on key management issues.
Surface mounters are used mainly in facilities                    The Company continued its advance in the sector
manufacturing personal computers, cellular phones,             when it obtained part of the business of Tenryu
home appliances including DVD players and                      Techniques Co., Ltd., the third largest surface mounter
automotive parts, while industrial robots are also used        maker in the Japanese industry at that time. Yamaha
in a variety of production sites, ranging from large-          Motor then established i-Pulse Co., Ltd. as a wholly
scale plants to workshops.                                     owned subsidiary, in another move to strengthen its
                                                               position in the surface mounter industry.
Background of the Business
Yamaha Motor began research and development                    Production System
of industrial robots in 1974, in order to streamline           IM Company
the production and assembly of its motorcycles                 Location: Hamamatsu City, Shizuoka Prefecture, Japan
and improve manufacturing precision. In 1976,
the Company developed its own SCARA robots to                  i-Pulse Co., Ltd.
assemble parts, and introduced them in its in-house            Location: Hamamatsu City, Shizuoka Prefecture, Japan
motorcycle production line. With the success of
these projects, Yamaha Motor entered into the                  Sales Routes
industrial robot business in 1981. The Company has             Yamaha Motor sells surface mounters through its
since developed a diverse line of robots, and began            distributors worldwide.
marketing surface mounters in 1987. In February 2001,             For the European market, the Company began OEM
surface mounter cumulative sales reached 10,000 units.         supply of surface mounters in 1987 to Philips
                                                               Electronics Manufacturing Technology (currently
Current Business Conditions — Product                          Assembléon B.V.), a wholly owned subsidiary of Royal
Features and Technologies                                      Philips Electronics N.V. of the Netherlands.
Surface mounters, the mainstay products of Yamaha
Motor’s IM business, are high-speed modular type
models that boast superb mounting speed and in
both standalone applications and multiple-unit
configurations. Yamaha Motor is a leading company
in general-purpose surface mounters with a lineup
offering exceptional precision, speed and versatility.
   In September 2006, the Company moved into the
high-speed mounter segment when it developed
the YG300 surface mounter, which has achieved the

Representative Models

                                                       Example of a printed circuit board
                                                       produced by the surface mounter

YG300                                                                                                Hybrid printed circuit board tester
Standard retail price in Japan:                                                                      YVi-X2
¥45,000,000                                                                                          Standard retail price in Japan:

                     SCARA robot YK500XG
                     Standard retail price in Japan:

Linear single-axis robot — the PHASER series                       Cartesian robot SXYx-1515
Open pricing                                                       Standard retail price in Japan:

Automotive Engines

Product Profile                                                    In 2000, REAS received an award*1 from the Society
Yamaha Motor manufactures and supplies high-                   of Automotive Engineers of Japan. The Toyota Hilux
performance automotive engines, primarily for                  Surf, introduced in August 2002, incorporated the
automakers inside and outside Japan.                           X-REAS, an upgraded version of the REAS. In the
                                                               X-REAS, the front and rear shock absorbers are
Background of the Business                                     diagonally linked to achieve optimal distribution of
Ever since its founding, Yamaha Motor has been actively        the vehicle weight across the four wheels, and optimal
involved in racing as a working laboratory for the             control of the vehicle’s dynamic motion.
development of motorcycle engine technology. At the                The Performance Damper was selected as the
same time, the Company has conducted basic research            Chairman’s Award Achiever at the third “Prize for
and experimentation in the area of automotive engines.         Promoting Machine Industry,” held in December 2005
In 1967, Yamaha Motor entered a development and                by the Japan Society for the Promotion of Machine
manufacturing venture for the Toyota 2000GT sports             Industry.
car together with Toyota Motor. Subsequently, the joint
efforts of the two companies led to the development of         Note: *1 Award from the Society of Automotive Engineers of Japan
                                                                       Since 1951, the Society of Automotive Engineers of Japan,
the Toyota 1600GT and the Toyota 7. In 1985, Yamaha
                                                                       Inc. has been presenting awards to excellent new products
Motor concluded a contract with Ford Motor Company
                                                                       and technologies that contribute to the advancement of
for the development and supply of automotive engines,                  automotive engineering.
and has been supplying engines to Ford Motor since
1988.                                                          Production System
   Yamaha Motor also participated in the Formula               1st Iwata Factory at the Head Office
One, the world’s premier car racing series, for nine
seasons from 1989. The expertise gained through                           Yamaha sales
                                                                          (consolidated basis)
the racing challenge contributed greatly to the                           Unit: billion ¥

technological development of the Company’s                                    50                                  48.8
production engines.

Current Business Conditions — Product                                         30

Features and Technologies                                                           20.9
Based on the engine technologies gained through the
motorcycle business, Yamaha Motor specializes in                              10

designing high performance, high RPM, high power                               0
                                                                                   FY’04/3   ’04/12*2   ’05/12   ’06/12
engines, primarily suited for sports cars.
                                                                          Note: *2 The fiscal period ended December 31, 2004
   The Company has also developed a new automotive                                 was an irregular nine-month accounting
                                                                                   period, due to a change in the Company’s
suspension technology — called the Relative Absorber                               annual closing date, from March 31 to
                                                                                   December 31. Therefore, the Company has
System (REAS) — and a Performance Damper —                                         provided twelve-month conversion figures
                                                                                   (January 1, 2004 through December 31,
damper braces for automobiles — both of which are                                  2004), only for reference.
highly evaluated by the industry.

Representative Models

                        Crown Athlete (Toyota)

4GR (2,500cc)

                        IS250 (Lexus)

CV8 (4,400cc)           XC90 (Volvo)

Performance Damper      Fairlady Z Version NISMO (NISMO)


Product Profile                                                                                        transportation convenience. Helping develop new
The Yamaha PAS is an electro-hybrid bicycle — a                                                        transportation platforms is a crucial commitment for
vehicle equipped with a compact electric motor and                                                     the Company.
a battery. The motor provides supplementary power                                                         Yamaha Motor has focused on the versatility of
in response to the rider’s pedaling effort, reducing                                                   bicycles — the most basic form of personal commuter
the required pedaling force to about half when riding                                                  vehicle — since the 1980s, in the search for solutions
uphill, against the wind, or from a standing start.                                                    to various social issues involving energy, the global
                                                                                                       environment, chronic traffic congestion, and an aging
                                                                                                       society. The Company spent more than ten years in
            Pedaling                                        Input
                                                                                                       developing personal commuter vehicles that would
                                                                                                       effectively overcome the fundamental drawbacks of
                                                                         Driving force                 the bicycle — strenuous pedaling uphill, against the
                                                                                                       wind, and when carrying cargo — while maintaining
                            Controller                      Motor
                                                                                                       its utility and convenience. The result was the Yamaha
                                                                               Rear-wheel drive
                                                                                                       PAS electro-hybrid bicycle.

                                                                                                          Guided by the corporate mission “Kando Creating
                                                                                                       Company,” the Company pursued the following
Applications (User Profile)                                                                            themes in developing the PAS electro-hybrid bicycle.
Yamaha PAS electro-hybrid bicycles are used by
people of all ages. Parents run their kids to and from                                                 1) Helping society by making people’s lives more
kindergartens on the Yamaha PAS, while housewives                                                        convenient
and elderly people use them to get around the                                                          2) Helping solve local environmental and energy
neighborhood. They also serve as a commuter vehicle                                                      problems
for students and working people. In addition, many                                                     3) Helping mitigate chronic traffic congestion
people use Yamaha PAS as part of a health and fitness
program, since it makes exercise stress-free fun.                                                      The development target was the creation of “a people-
   Amid growing concern for the environment,                                                           and environmentally-friendly personal commuter
municipalities as well as government and corporate                                                     vehicle with the emphasis on human feeling.”
offices are promoting Yamaha PAS bicycles in their                                                     Technologically, this meant the harmonious integration
drive to reduce environmental impact. Yamaha PAS                                                       of human power and sensitivity with mechanical force.
electro-hybrid bicycles are also employed as shared-use
vehicles.                                                                                              Current Business Conditions — Product
                                                                                                       Features and Technologies
Background of the Business                                                                             Yamaha Motor developed and marketed the first-
Yamaha Motor is always striving to develop ideal                                                       generation PAS in 1993, a breakthrough product on
commuter vehicles that reduce impact on the                                                            the international market. Since the introduction of this,
environment and provide the highest level of local                                                     the world’s first electro-hybrid bicycle, the Company

has been improving the performance of the PAS while             electric power units and auxiliary electric power assist
maintaining the original development emphasis on                units for conventional manual wheelchairs, and electric
building a vehicle with the human touch. In order to            commuter vehicles. Today, alternative fuel vehicles are
provide a better “assist” feel to users, the Company            attracting a great deal of attention because they reduce
has made many improvements, such as reducing the                environmental impact and promote effective use of
product’s weight. It has been solving problems that             resources. Yamaha will maximize the technologies
have stood in the way of popularizing electro-hybrid            developed with the Yamaha PAS to create “cleaner”
bicycles and meeting more users’ needs. The charging            products in the future.
time has been shortened and the process simplified,
cruising distance per charge has been extended, and             Production System
there are more riding modes available. Meanwhile, the           Power units:
Company has introduced a new pricing system for the               Yamaha Motor Electronics Co., Ltd. (Electric parts
PAS.                                                              manufacturing subsidiary)
   The Yamaha PAS is designed for ease, comfort, and              Location: Morimachi, Shuchi-gun, Shizuoka
an enhanced riding feel — its defining quality. The PAS                         Prefecture, Japan
provides the optimal degree of power assistance under
any riding condition. From the 2004 model year, the             Bicycle bodies:
PAS incorporates lithium-ion batteries and features a             Outsourced production by Bridgestone Cycle Co., Ltd.
Power Mode that provides additional assistance under
high-load conditions. The 2006 models are equipped              Sales Routes
with an Auto Eco Mode that extends cruising distance            In Japan, Yamaha PAS electro-hybrid bicycles are
while maintaining a strong power assist. The Company            sold through 7,500 PAS Shops outlets nationwide.
developed the line further with the 2007 models,                Yamaha Motor also supplies PAS units to a total of five
incorporating the Auto Eco Mode Plus, developed from            companies in Japan and overseas on an OEM basis. The
the Auto Eco Mode. To meet both diverse personal                OEM business started in 1997.
and commercial needs, Yamaha Motor offers a full PAS
lineup, from lightweight models to tricycle-type and            Representative Models
business versions. In addition, each lightweight model
comes in a number of versions, with different batteries
and assist settings to suit various operating conditions
and environments.

PAS Technology Finding Application in Clean Energy
                                                                PAS Lithium
The advanced control technology used in the Yamaha              Manufacturer’s suggested retail price: ¥96,800

PAS for the smooth integration of human and electric
power has been applied to various products such as

FY2006/12 domestic demand*1

                                           Yamaha 67

                   demand 268
                  Unit: thousands
                      (%): share of

                  Other companies
                    201 (75.0%)

Yamaha unit sales (CBU*2 models)                                             Yamaha sales (CBU*2+OEM)
(consolidated basis)                                                         (consolidated basis)
Unit: thousands                                                              Unit: billion ¥

   70                                    67                                     10
          63                                                                                                        9.2
                                 61                                                    8.8
                    55                                                                            8.1




    0                                                                            0
        FY’04/3   ’04/12*3     ’05/12   ’06/12                                       FY’04/3   ’04/12*3   ’05/12   ’06/12

  Notes: *1 Yamaha surveys
         *2 CBU: Complete built-up
         *3 The fiscal period ended December 31, 2004 was an irregular nine-month accounting period, due to a change in the
            Company’s annual closing date, from March 31 to December 31. Therefore, the Company has provided twelve-month
            conversion figures (January 1, 2004 through December 31, 2004), only for reference.

Unmanned Industrial Helicopters

Product Profile                                                 fewer heirs to carry on family businesses, and falling
                                                                produce prices. Unlike large-scale agriculture common
Remote-Control Unmanned Industrial Helicopters                  in the United States, farming in Japan is generally
Yamaha Motor offers RMAX Type II and Type IIG                   conducted in the rather small flat areas available
unmanned agricultural-use helicopters, mainly                   between mountains. Unmanned helicopters are well
for crop dusting, and the RMAX G1 autonomous                    suited, because they allow efficient crop dusting in
unmanned helicopter, capable of programmed                      these uniquely Japanese farming conditions. They are
flight beyond the operator ’s visual range, for                 expected to help solve many of the nation’s farming
survey and observation purposes.                                problems.

Applications (User Profile)                                     Current Business Conditions — Product
For agricultural applications, major purchasers of              Features and Technologies
Yamaha unmanned helicopters are local governments,
National Federation of Agricultural Co-operative                Excellent Operability and High Payload Capacity
Associations, agricultural co-operatives, crop dusting          Yamaha Motor has applied control technology, one
organizations and individual farmers.                           of its core competencies, to allow these aircraft to
   For survey and observation purposes, Yamaha                  hover in place, which had previously been considered
autonomous unmanned helicopters are supplied                    difficult for unmanned helicopters. In 1995, the
mainly to government organizations engaged in land              Company introduced the Yamaha Altitude Control
preservation surveys and disaster prevention research,          System (YACS). This original technology combines an
and research organizations conducting environmental             optical fiber gyro and an accelerometer to control
observations.                                                   the helicopter ’s attitude and altitude. YACS has
                                                                significantly improved helicopter operability, making
Background of the Business                                      operation accessible to people without special skills
In 1983, Yamaha Motor was commissioned by the                   and training.
Japan Agricultural Aviation Association, an                        In 1997, the Company introduced the RMAX model,
organization affiliated with Japan’s Ministry of                with an improved payload capacity. Its successor, the
Agriculture, Forestry and Fisheries, to develop an              RMAX Type II G, launched in April 2003, combines the
unmanned helicopter for use in agricultural crop                same high payload and attitude stability with a new
dusting.                                                        GPS-based speed control function for easier operation.
   In 1987, the Company commercialized the world’s                 Yamaha Motor has also begun OEM supply of
first unmanned helicopter, the R-50. In 1989, Yamaha            unmanned helicopters to Yanmar Agricultural Equipment
Motor launched a full-scale marketing strategy,                 Co., Ltd., — a subsidiary of Yanmar Co., Ltd.
establishing a new business division to design, develop,           Thus, Yamaha Motor is helping modernize
sell, promote and service unmanned helicopters.                 agriculture in Japan as the nation’s manufacturer of
   Today’s agriculture in Japan faces various problems,         unmanned helicopters.
including the aging of the farming population,

Development of Autonomous Unmanned Helicopters                  Sales Routes
In observations of the volcanic activity at Mt. Usu in          Yamaha Skytech Co., Ltd., a sales subsidiary of Yamaha
Hokkaido in April 2000, and on Miyake Island, Tokyo,            Motor, sells, promotes and services Yamaha unmanned
in February 2001, Yamaha unmanned helicopters                   helicopters through its 19 dealers nationwide.
succeeded, for the first time in the world, in taking                                           Reference
aerial photographs of the volcano disaster area by                  Sky Tech Academy — a training facility for unmanned
flying beyond the visual range of the operators.                    helicopters — managed by the dealers of Yamaha Skytech

    Yamaha Motor began selling the autonomous                       Co., Ltd.
                                                                    To operate an unmanned helicopter for spraying chemicals
unmanned helicopter, RMAX G1, in March 2006. This
                                                                    and other purposes, an operator must undergo a training
model was developed based on the expertise gained                   course at the Sky Tech Academy, a training facility designated
through the applications such as disaster observations,             by the Japan Agricultural Aviation Association, and receive
land preservation surveys and environmental                         an Unmanned Industrial Helicopter Skill Certificate from the
                                                                       The Sky Tech Academy is managed by Skytech dealers
                                                                    throughout Japan. Seminars are presently held at 60 locations.
Production System (manufacturing company                            The Academy has produced some 10,000 graduates thus far.
within the Yamaha Motor Group)
Engines, Transmissions, etc.:
Yamaha Motor powered Products Co., Ltd.
Location: Kakegawa City, Shizuoka Prefecture, Japan

Control, electric related:
Yamaha Motor Electronics Co., Ltd. (Electric parts
manufacturing subsidiary)
Location: Morimachi, Shuchi-gun, Shizuoka Prefecture,

Representative Models

Autonomous unmanned helicopters RMAX G-1                        RMAX on an observation mission of volcanic activity
Manufacturer’s suggested retail price: ¥136,500,000 (Two        at Mt. Usu
helicopter unit and base station set)

Electric Wheelchairs

Product Profile                                                           Background of the Business
Wheelchairs help physically challenged and elderly                        Yamaha Motor is committed to using its technological
people gain mobility. There are two types of wheelchair                   expertise as a vehicle manufacturer to fulfill its social
— manually-propelled and electrically powered versions.                   mission — actively contributing to the improvement
Yamaha Motor presently markets supplementary                              of health and welfare, and helping meet challenges
drive power assist units to be mounted on hand-                           facing our aging society. In the effort, since the early
pushed wheelchairs, as well as complete wheelchairs                       1990s, the Company has been applying its control and
incorporated with power assist units, and electric                        drive technologies to the development of the JW Series
wheelchairs, including a model designed to reduce the                     electric power unit for manually-propelled wheelchairs.
exertion required for a caregiver to push the chair.                      In 1995, the Company began limited-area marketing of
                                                                          the first in the series — the JW-I — designed to convert
Applications (User Profile)                                               a standard wheelchair to an electrically-powered
Wheelchairs are certified prosthetic appliances used                      version, and started nationwide marketing in October
by the physically challenged. Under the long-term care                    of the following year. The full-fledged launch into
insurance system introduced in Japan April 2000, an                       the wheelchair business began with the release of the
increasing number of elderly people are using rental                      JW-1B, a complete wheelchair installed with the JW-I
wheelchairs, which are covered by the insurance.                          unit.
                                                                             In October 1996, Yamaha Motor introduced the JW-II
                                                                          electric power assist unit for the hand-operated
   Certified prosthetic appliance (JW-I, JW-II, JWX-1 and
                                                                          wheelchair. The JW-II automatically supplements the
   Towny Joy)
   The term “prosthetic appliance” refers to devices designed
                                                                          propulsion of the manual wheelchair with electric
   to help the physically challenged achieve or regain healthy,           power supplied by the Power Assist System (PAS),
   active lives by supporting physical functions. Prosthetic              allowing users to drive their wheelchairs with less
   appliances are certified by the national government. When
                                                                          physical effort. In March 2001, the Company marketed
   an application to receive a certified prosthetic appliance is
                                                                          the Towny PAS electro-hybrid wheelchair, which
   submitted by a physically challenged person and approved,
   the applicant can, as a general rule, obtain the product at 10%        provides supplementary electric driving power to
   of the market price.                                                   make it easier for the caregiver to push. The Towny Joy,
                                                                          a lightweight, electrically-powered wheelchair
   Products covered by long-term care insurance (JW-I, JW-II,
                                                                          introduced in April 2004, offers enhanced comfort and
   JWX-1 and Towny PAS)
                                                                          convenience to both wheelchair users and caregivers.
   Long-term care insurance for home care not only covers
   home help services but also health and welfare equipment               The Towny Joy contributes significantly to expanding
   rental/purchase, and renovation of homes. When an                      the range of activity for people who use wheelchairs.
   application for welfare equipment covered by the long-term                In February 2005, Yamaha Motor released the
   care insurance is approved, the applicant needs to pay only
                                                                          JWX-1, an all-new version of the JW-1 that offers
   10% of the rental cost.
                                                                          greater ease of use.

Current Business Conditions — Product                             JW Active and Towny Joy — Lightweight,
Features and Technologies                                         Electrically-Powered Wheelchair
                                                                  These models are lightweight electric wheelchairs
Electric Power Assist Units for Wheelchairs                       that not only reduce the burden on the caregiver but
Yamaha Motor offers three power assist units in the               also offer easy use. Moreover, they are ergonomically
Joy Unit series that can easily be installed in manual            designed to make it easy for the user to get in and out
wheelchairs to electrically power them — the JW-I,                of the wheelchair and transfer to and from bed.
JWX-1 and JW-II.
                                                                  Production System
Towny PAS Designed for Easy Operation by                          IM Company
Caregivers                                                        Location: Hamamatsu City, Shizuoka Prefecture, Japan
The Towny PAS wheelchair incorporates the same
Power Assist System (PAS) used in the Company’s
electro-hybrid bicycles to make it easier for caregivers
to push the wheelchair.
    The Towny PAS provides the proper degree of
power assistance to drive the wheelchair, based on the
force being applied by the caregiver. This significantly
reduces the physical power required to push the chair.

Representative Models

JW Active                                                         JWX-
Manufacturer’s suggested retail price: ¥448,000 (tax-free)        Manufacturer’s suggested retail price: ¥346,500
* Equipped with caregiver operating controls and nickel-          * Equipped with caregiver operating controls and nickel-
  metal hydride battery                                             metal hydride battery

Life Science Business

Product Profile                                                 researching and developing practical applications
Astaxanthin, a carotenoid produced by Haematococcus             to commercialize this technology, Yamaha Motor
algae through photosynthesis, is a beta-carotene and a          took notice of Haematococcus algae, which contains
red natural pigment. Yamaha Motor has been focusing             astaxanthin in high concentration. In 2005, the
on astaxanthin, and has developed a proprietary large-          Company established another proprietary mass
scale cultivation technology and mass-production                cultivation and indoor production system for the
system for astaxanthin preparation, called PURESTA.             astaxanthin algae.

Applications (User Profile)                                     Current Business Conditions — Product Features
PURESTA is gaining interest as a raw material for               and Technologies
health supplements and cosmetic products. Yamaha                Although astaxanthin occurs in a variety of aquatic
Motor began full-scale supply of PURESTA astaxanthin            wildlife, such as microalgae, shellfish and fish, it has
preparation to supplement, food and cosmetics                   been considered difficult to obtain stable yields of
manufacturers in October 2006.                                  astaxanthin as raw material in large quantities using
   The Company is striving to fulfill its social                conventional techniques.
mission — helping people enjoy a long, healthy                     Yamaha Motor developed the “Yamaha High-
life and increasing well-being — by applying the                efficiency Bio Reactor,” an original production system
biotechnologies it has developed over years of                  for indoor cultivation of microalgae using artificial light
research. Supplying PURESTA astaxanthin preparation             and advanced fluid control technology. The Company
represents another step in that direction.                      incorporated the Bio Reactor and other cutting-edge
                                                                technologies in its production facility, while developing
Background of the Business                                      a manufacturing system designed to comply with
As a manufacturer and seller of motorcycles and other           Japan’s GMP (Good Manufacturing Practice)
products powered by small engines, Yamaha Motor has             requirements for health foods. With this approach, the
been in the forefront addressing global environmental           Company has achieved a stable supply of safe, high-
issues. In addition to conducting engineering studies           quality astaxanthin in a high concentration (8%, as
toward reducing the environmental impact of engines,            astaxanthin dialcohol).
and developing electric vehicles and fuel cells, the               Yamaha Motor’s astaxanthin raw material
Company has been vigorously researching in the                  manufacturing plant commenced full-scale operation in
biotechnology field since 1997.                                 October 2006. On the same premises, the Company has
   In the course of its research, the Company focused           constructed the Life Science Laboratory, the research
on the photosynthesis function of microalgae, and               and development center for its life science business. By
announced the development of technologies for                   integrating R&D and production in this way, Yamaha
absorbing and fixing carbon dioxide using microalgae            Motor aims to achieve higher productivity.
in 2002. With the new process, the Company realized
high-density, large-scale cultivation of a diatom called
Chaetoceros calcitrans, a rare marine bait essential
for the larval stage of shellfish in aquaculture. While

Production System
Astaxanthin raw material plant
Location: Fukuroi City, Shizuoka Prefecture, Japan

Sales Routes
Yamaha Motor supplies astaxanthin as a raw
material to manufacturers in fields including foods,
supplements, and cosmetics. It also sells astaxanthin
supplements through mail order.

Representative Products
Astaxanthin preparation
   •PURESTA Oil80
    (oil preparation)
   •PURESTA W-05
    (water-soluble preparation)

Astaxanthin supplement

Other Products

Parts and Accessories                                           Water Purifiers
Yamaha Motor sells genuine parts for its motorcycles,           Yamaha Motor began developing water purifiers
marine products and other products, as well as                  for Southeast Asia and other regions where there is
accessories such as helmets and apparel.                        an insufficient supply of quality water. Recently, the
                                                                Company also started supplying home-use water
                                                                purifiers for the domestic market.

Pleasure Boat Mooring Equipment
The Company sells equipment used in marina
applications, such as pontoons.                                 Clean Seawater Supply System
                                                                Yamaha Motor markets clean seawater supply systems
                                                                designed to maintain a proper seawater environment
                                                                to keep fish healthy.

OES* Truss Reefs
Yamaha Motor’s OES truss reefs are artificial structures
inspired by coral reefs. They are designed to promote
fish propagation while helping enrich the marine
                           *OES: Ocean Elastic Structure


                                       This fact book is printed using
                                       environmentally friendly soybean oil ink.

                                                        Printed in Japan

Description: Pricing Strategy for Yamaha document sample