Azernews.Az

By Bloomberg

Yamaha Motor Co. aims to double the operating profit margin of its motorcycle business by the end of 2018 as the world’s second-largest motorcycle maker lowers costs and introduces new products.

Margin for the motorcycle business will rise to 10 percent under the mid-term plan ending 2018, Chief Executive Officer Hiroyuki Yanagi said in an interview today at Iwata City, Japan. The motorcycle business will make up half of operating income by then, he said, up from 26 percent in 2014.

Yamaha last year unveiled more fuel-efficient models and now expects production costs to drop by 20 percent using more shared components across a platform, according to Yanagi. The motorcycle business in developed markets will probably return to profit this year after losing money for the past eight years, he said.

“We will shift the pivot of the profit increase in motorcycle business to developed markets,” said Yanagi. “By the end of the next mid-term plan, we should be able to reach 5 percent operating margin in developed markets.”

The goal to raise margin to 10 percent by 2018 compares with the target of 7.5 percent for 2017 Yamaha had set in January 2013.

Shares of Yamaha rose 4 percent to close at 2,915 yen in Tokyo trading today. They have climbed 19 percent this year, compared with the 8.1 percent gain in the Topix index.

Indonesia Market

Yamaha is targeting a market share of 40 percent by 2018 in Indonesia, its largest market, Yanagi said. That compares with the 31 percent share it had last year. The company plans to utilize its full production capacity in Indonesia in two years, up from about 70 percent now, he said.

While industrywide two-wheeler deliveries in Indonesia continued to recover in 2014 after a slump in 2012, according to Indonesia’s motorcycle industry association, Yamaha has been losing market share to Honda, the world’s largest motorcycle maker.

Yamaha seeks to boost operating profit margin of its marine business to more than 20 percent, on par with “start-ups in Silicon Valley,” in the mid-term plan period as it targets affluent buyers in developed markets with higher-end boats, Yanagi said.

It will also consider acquiring companies with unique technologies in electronics control, he said, without providing details.