Yamaha Motor's FY12 Pretax Profit Down 57%

TOKYO (Nikkei)--Yamaha Motor Co.'s (7272) group pretax profit for 2012 fell 57% to 27.2 billion yen as motorcycle sales slowed in emerging economies.

A new loan regulation introduced in Indonesia last June contributed to the sluggish sales. Aimed at preventing overaggressive lending, the rule requires a 25% deposit to finance a purchase.

Sales in Vietnam and Brazil were also listless, and reduced shipments for inventory adjustments eroded profit.

Yamaha Motor's global motorbike sales fell 13% to 6.09 million units. Sales in Indonesia, which accounts for roughly 40% of its total tally, plummeted 23% to 2.42 million units. The company's share of this contracting market dropped to 34% from 39%, losing ground to rival Honda Motor Co. (7267).

Group operating profit plunged 65% to 18.5 billion yen, 9.4 billion yen short of earnings guidance released in November. The motorcycle business' operating profit in emerging markets shrank more than 60% to 22.4 billion yen. The segment continued to bleed red ink in developed countries, posting a loss of 22.6 billion yen.

Meanwhile, the firm's marine business, which includes outboard motors, saw profit top 10 billion yen.

For 2013, Yamaha Motor aims to generate 52 billion yen in pretax profit, up 91% on the year. It expects to boost global motorbike sales 14% to 6.94 million units, which would likely push up profit by 27.6 billion yen.

The company also anticipates a 18.1 billion yen profit gain from the yen's depreciation. It used an exchange rate of 80 yen to the dollar and 103 yen per euro last year, but the rates for this year will be 87 yen and 115 yen.

Yamaha Motor will release nine new models in Indonesia, and raise the percentage of those with improved fuel economy to 70%, up from 55% last year. "We'd like to rebuild our brand strength," President Hiroyuki Yanagi said at a news conference.

(The Nikkei, Feb. 15 morning edition)

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