JAPANESE MARKET INCREASE
February 5 2004.

Overseas production by Japanese motorcycle manufacturers in the third quarter of 2003 totalled 2.150,687 units - an increase of 11.8% over the same quarter in 2002 - because of increased manufacturing in the Asian, North American and European markets.

And results for the period January 2003 - September 2003 were also up from the previous year, rising 11.9% to 6.312,812 units, again to expanded local production.

The Japan Automobile Manufacturers Association (JAMA) recently hosted a round table discussion with Japan's four motorcycle manufacturers to review progress made in 2003 and to present the industry´s outlook for 2004.

Japan Market Highlights in 2003:

In the 50cc motorcycle class, the Honda ´Today` and other new low-priced products were marketed, supporting growth in unit sales and Suzuki released the `Choinori` a product priced at the 50,000-yen level, which helped boost the company's sales in the 50cc class by more than 40 per cent. The majority of the customers purchasing this product were first-time buyers who had never owned a motorcycle before. The purchasers of the ´Passol ` a new electric-powered motorcycle introduced by Yamaha, also attracted a large proportion of first time buyers.

In the 250 to 400cc class, scooters are now being used more widely by younger people, in addition to the traditional urban business customer segment. At the same time, older people are also increasingly purchasing scooters. Catching on in the larger motorcycle class, meanwhile, is the marketing style of selling the models in combination with tours and leisure activities organized with them.

Industry Forecasts for 2004:

Mr. Yasuo Ikenoya, Honda Motor Co., Ltd., Managing Director, Chief Operating Officer for Motorcycle Operations: "Although Japan's motorcycle industry is currently facing harsh conditions, there are signs of progress in eliminating the ban on tandem riding on expressways, resolving the parking space shortage and targeting other issues. On a separate front, a recycling program for motorcycles is scheduled to begin this autumn thanks to co-operation between the four JAMA-member manufacturers. In this way, we believe that the current issues will be steadily resolved to enhance the use environment, causing the market to move in a more positive direction."

Mr. Hiroshi Ukon, Yamaha Motor Co., Ltd., Managing Director, Japan Headquarters: "We were extremely concerned when domestic sales fell below one million units three years ago. However, the manufacturers are working hard to revitalize the market with the introduction of appealing new products. To support these efforts, the industry will also be doing its best to improve the ownership and use environment for motorcycles in Japan. For its part, Yamaha will be going all out to ensure that the Japanese market recovers to sales of one million units annually at the earliest possible time."

Mr. Isamu Miyagawa, Suzuki Motor Corporation, Senior General Manager (Councilor), Domestic Planning, Motorcycle/ Marine & Power Products Marketing Division: "With the major part of Suzuki sales generated by our automobile division, my goal is to see that this side of our business does not end up largely buried in the midst of the larger four-wheel sector. I also hope that the industry will strive vigorously as a whole to avoid seeing motorcycles left behind as Japan moves toward automobile-focused motorisation. The overwhelming majority of motorcycle production, meanwhile, now takes place overseas. Against this backdrop, the role of our business here in Japan will be to act as ´mother plants` in steadily supplying the world with state-of-the-art know-how for both hardware and software."

Mr. Shinichi Morita, Kawasaki Heavy Industries, Ltd., Senior Vice President, President of Consumer Products & Machinery Company: "Much of our discussion here today has concerned improvements in the infrastructure for motorcycles, and on that front I feel that we are moving in a positive direction. It is now up to the manufacturers to supply good news in terms of their products and ideas. While the environmental problem is also a serious challenge, the very emergence of such technical themes will motivate Japanese makers to improve their engineering strength and carry on the business. In that sense, we should treat this as an opportunity to power up to even greater growth. "

Source: The Japan Automobile Manufacturers Association.