YAMAHA LIKELY TO INCUR FIRST OPERATING LOSS FOR 26 YEARS
February 9 2009.

Yamaha Motor Co. is bracing itself for its first operating loss since 1983 in the current year ending Dec. 31, with the motorcycle manufacturer expected to sink 30 billion yen into the red.

Demand is sagging for motorcycles and outboard motors for leisure boats in Japan, the U.S. and Europe. Generating about 90% of its sales abroad, the company will be hit hard by the strong yen as well.

Yamaha Motor has shifted its cost-cutting drive into high gear this month, reducing executive compensation and other fixed expenses. But this is unlikely to offset the impact of a faster-than-anticipated decline in demand. Sales are projected to slide more than 10% from last fiscal year's estimated 1.6 trillion yen.

Orders for Yamaha Motor's motorcycles "have been rapidly falling since July," according to a company official. The firm expects the tough climate to last until at least June. Demand for outboard motors will likely slump further in the U.S., while motorcycle sales are expected to slow in Spain and other Western European markets. The outlook for Asian demand is unclear, and orders will likely decrease in Japan, particularly for midsize motorcycles..


Source: Nikkei Morning Edition.