Overview of Operations

Net sales and operating incomeMotorcycles(Billion ¥)FY2017 worldwide demand(Billion ¥)

1,200

900

60

600

40300

Executive Officer
Chief General Managerof Motorcycle BusinessOperations

Note: Yamaha Motor surveys

80

1,070.0
67.0

Takuya Kinoshita

Rest-of-world
7,315 (13.5%)

Japan 384 (0.7%)
North America 535 (1.0%)
Europe 1,501(2.8%)

Rest-of-world
461 (8.5%)

Japan 103 (1.9%)
North America 70 (1.3%)
Europe 199(3.7%)

53,995

5,390

Unit: thousands(%): share ofdemand

Unit: thousands(%): share ofunit sales

Asia (excluding Japan)
44,260 (82.0%)

Asia (excluding Japan)
4,558 (84.6%)

20002014

2015

2016

2017

2018
(Forecast)

Net sales

Operating income

We will provide Yamaha’s unique value in a distinctively Yamaha way to ourAppraisal of 2017 results and initiatives for 2018global customers.

In 2017, unit sales rose in ASEAN markets (excluding Indonesia) andprofitability. In particular, major themes will be further reinforcement

Brazil, remained flat in India, and declined in Indonesia, developedof earnings capabilities in the ASEAN region and expansion of sales

markets, and China. In that environment, net sales increased ¥115.1

in India. At the same time, we will engage in agile management andbillion (12.4%) from the previous year to ¥1,045.2 billion. Operatingpromote new value creation to address future changes in customers,

Opportunities

Risks• Expansion of middle-income market in ASEAN and emerging nations• Tighter environmental regulations in each country

income increased ¥32.9 billion (91.4%) to ¥68.8 billion due to factors

markets, and technologies with a view to our next Medium-Term• Evolution of marketing through digital technology• Shift in industrial structure due to innovative technologies and newcompetition

including the effect of cost reductions through use of platform models

Management Plan. We have always offered distinctive new products

and the shift to a high-value-added model mix. The operating income

unique to Yamaha in the motorcycle category. We will take on themargin increased by 2.7 percentage points to 6.6%.

challenges of a new era by further expanding the value of motorcycles

During 2018, as the final year of the current Medium-Term

Areas of focus under the Medium-Term Management Planvariations of uniquely Yamaha platform models” and “cross-regionalout improvement of earnings capabilities and generation of free cash

globalization” since our previous Medium-Term Management Plan toflow as overall themes. In addition, looking at key themes for eachaddress diversifying customer needs while achieving cost reductions.

market, the plan focuses on bolstering efforts to capture the growing

Thanks to tackling each of these initiatives with speed, we are

middle-income ASEAN market, reforming the business structure in

seeing results on the profit front ahead of our target timeline. We plan to

Brazil and China, and maintaining and strengthening sport-oriented

expand these effects to the whole value chain while also reforming ourbranding and winning customers in the scooter category in India.

management style. We will continue to provide Yamaha’s unique value
in a distinctively Yamaha way to our global customers.

LEXi, new 125cc scooter for the growing Indonesian market

Yamaha Motor Co., Ltd. ⎜ Annual Report 2017

within the mobility framework.

Management Plan, we will work to generate results from increased

The motorcycle business current Medium-Term Management Plan setsAs one of those measures, we have been working on “expanding28

FY2017 Yamaha Motor unit sales

FZ25, popular model in India with a total of 1.5 million units sold since the series’ release

Yamaha Motor Co., Ltd. ⎜ Annual Report 201729

Overview of Operations

Net sales and operating income

Marine Products(Billion ¥)(Billion ¥)400

FY2017 worldwide demand foroutboard motors
Note: Yamaha Motor surveys

100327.0300

75FY2017 Yamaha Motor unit sales ofoutboard motors

North America
298 (36.3%)

Rest-of-world
265 (32.3%)

North America
109 (36.4%)

Rest-of-world
138 (46.0%)

61.0
200

Hirofumi Usui
Senior Executive Officer
Chief General Managerof Marine Business
Operations

10025002014

2015

We will steadily promote our comprehensive marine business strategy to movefrom being an engine supplier to a system supplier.
Opportunities

Risks• Growing demand for large outboard motors mainly in developed• Creation of production/supply system to meet demand for large• Expansion of peripheral equipment business due to enhancement ofintegrated control technology

301
Unit: thousands(%): share ofunit sales

2016

2017

Europe 53(17.6%)

Europe258 (31.4%)

2018(Forecast)Net sales

markets

820
Unit: thousands(%): share ofdemand

50

Operating income

demand for large outboard motors has surpassed previous peaks. TheWe will offer value that exceeds customer expectations byincreasing size of boats combined with a trend toward multiple outboard

expanding our peripheral equipment business through speedy

motors requires more complex technology for operation. In this context,

development of integrated control systems that enable ease of handlingthere are ever-increasing demands from customers for multi-function

for boats, while creating a supply system that can flexibly address

systems like those available for automobiles that would make boats

increased demand for large outboard motors.

easier to operate.

outboard motors• Achieving speedy development in integrated control field

Appraisal of 2017 results and initiatives for 2018

• Creation of business structure unaffected by changes in exchange

In 2017, we introduced large models and medium-sized lightweight

began the development of highly reliable boat control systems thatmodels in response to rising demand for outboard motors in markets inenable easier operation. The business overall recorded increases inEurope and the U.S. For personal watercraft, we introduced newsales and profit, with net sales increasing ¥26.6 billion (9.0%) from theperformance models and entry models, and for boats, we shifted ourprevious year to ¥323.8 billion, and operating income up ¥4.1 billion

lineup toward high-value-added models and moved ahead with(7.4%) to ¥59.5 billion.

rates and regulations

Areas of focus under the Medium-Term Management Plan
The system supplier that Yamaha aims to be

To continue contributing to a richer marine life for people around thestrategies including the acquisition of a boat builder in Europe. Sales

The year 2018 is the final year of our current Medium-Termincreased for all these products. In addition, with a view to making aManagement Plan. We will steadily pursue our comprehensive marine

supplier to a system supplier. By doing so, we will create new value

full-fledged transition to being a system supplier, we acquired twobusiness strategy aimed at further growth of our high-profitability

beyond customers’ expectations and firmly establish our position as themanufacturers of peripheral equipment in the summer of 2017 andbusiness model.

world, the marine products business aims to grow from being an engine

Control systems

Engines + Peripheral equipment + Hulls

No. 1 marine brand based on our overall business strength, reliability,and network strength.
Under the slogan of competing in the 3-trillion-yen marine market
set out in the current Medium-Term Management Plan, we are pursuing

EEngines

Boats

our comprehensive marine business strategy integrating the establishmentof a system supplier business model, a strategy of alliances with boat

Easy-to-operate large boats with multiple engines

builders, and hull strategy.
Robust economic growth in Europe and the U.S., our largest
markets, is providing a tailwind for the marine leisure industry, andLarge multi-engine boat

242 Limited S E-Series

GP1800 WaveRunnerConcept image of integrated control system

30

Yamaha Motor Co., Ltd. ⎜ Annual Report 2017

Yamaha Motor Co., Ltd. ⎜ Annual Report 201731

Overview of Operations

Net sales and operating incomeSolutions(Billion ¥)Net sales of industrial machinery and robots business(Billion ¥)40040Net sales of PAS business(Billion ¥)(Billion ¥)804868.0
303.0300306036200204024100

1020

120022.0

Hiroaki Fujita
Senior Executive Officer
Chief General Managerof Solution BusinessOperations02014

2015

2016

2017

2018

02014

2015

(Forecast)
Net sales

Appraisal of 2017 results and initiatives for 2018industry, self-driving vehicles, nursing care and home automation.

In 2017, net sales in the solution business increased ¥25.5 billion• Expansion of electrically power-assisted bicycle market

2015

2016

2017

2018
(Forecast)(9.3%) from the previous year to ¥301.0 billion, and operating income

As a result, sales and profit were up in the solution business as a whole.
In 2018, as the final year of the current Medium-Term Management• Deterioration of demand due to changes in global situation

inventory in North America and an increase in expenses for measures toas personal mobility, agriculture, and medicine, by combining the factory• Intensifying competition resulting from new forces enteringenhance the market quality of golf cars in the power products business,

automation technology we have built up in the industrial robot businessnet sales and operating income both grew thanks to factors including awith the unmanned technologies for land, sea, and air developed by thesignificant increase in sales for surface mounters and industrial robots

UMS business.

on the back of a worldwide trend toward labor-saving and intelligent*The solution business includes the power products, industrial machinery and robots, and other products

the market

and electric automobiles, and continued robust performance bybusiness is pursuing the following initiatives based on the current

sales channels of businesses acquired in 2017.

businesses.

electrically power-assisted bicycles in Japanese and European markets.

The UMS (Unmanned Systems) business, which focuses on
industrial-use unmanned helicopters, is striving to contribute to theperformance of individual products while offering customers solutions

modernization of agriculture and to expand measurement andfor the entire manufacturing line using IoT.

observation services, while also working to promote use of its products
in agricultural markets overseas.

complete Yamaha-brand bicycle business in Japan and the U.S., we are

In the RV (Recreational Vehicle) business, we will broaden our market

cultivating new markets and new customers for the drive unit system kit

domain by promoting a new product strategy for ROVs (recreational off-business mainly in Europe.

highway vehicles).

In the multi-purpose engine and generator business, along with2014

In particular, we will strive to expand our business into new fields such

existing product sales, we aim to expand sales by using products andIn the electrically power-assisted bicycle business, in addition to the(Forecast)contributing to a decline in profit such as efforts to reduce ROVWith the goal of creating a unique business model, the solution

In industrial robots and surface mounters, we are improving the2018Plan, each business will continue efforts aimed at achieving our targets.

Risks

Areas of focus under the Medium-Term Management Plan

Medium-Term Management Plan.

2017

increased ¥4.3 billion (25.0%) to ¥21.5 billion. Despite factors

Opportunities

rising labor costs in emerging nations

2016

Operating income

We aim to create a unique business model in areas such as unmanned operations in• Growing need for automation due to labor shortages in Japan and39.0

Mounter line centered on high-end, highly efficient modular Z:LEX YSM20R

JW Swing electric assist wheelchair

32

Yamaha Motor Co., Ltd. ⎜ Annual Report 2017

Yamaha Motor Co., Ltd. ⎜ Annual Report 201733