Establishing a Parts Control Center for Asia and Middle East Yamaha Motor aims to reduce the lead time in supplying genuine parts for these regions by approximately 80%, while cutting inventory by 30% and distribution cost by 25%

Yamaha Motor Co., Ltd. will establish a new company in Singapore as of April 1, 2003. The major purpose of this venture is to reinforce spare parts supply capabilities in Asian and Middle Eastern markets. The new company will operate as a parts control center for both markets, as part of Yamaha Motor's plan to set up parts control centers in six world regions.

The new company -- Yamaha Motor Distribution Singapore Pte. Ltd. (YDS) -- will be established with capital of three million Singapore dollars (approximately 200 million yen). Yamaha Motor Asia Pte. Ltd. will take a 75% stake in YDS, and Yamaha Motor will have the remaining 25% share. Yamaha Motor Asia was established in 1998 to enhance overall capabilities in Asia, including settlement services for parts purchasing, and the cross-trading of complete built-up motorcycles.

The new company will be responsible for stocking and delivering genuine parts made in Japan on behalf of Yamaha Motor headquarters; developing, procuring and selling new products, including accessories; and supplying complement parts, as well as the parts used for complete built-up models exported to third countries.
It will also develop guidance and data control designed to assure stable parts supply to factories in the area. Annual sales of YDS are expected to reach approximately 10 billion yen in 2008, due mainly to increases in the supply of new products and cross-trade parts, in addition to genuine parts made in Japan.

YDS itself will have the physical distribution function for the regions it serves, but building and storehouse operations will be outsourced, with Yamaha Motor supporting the outsource provider with the distribution center management system and operational know-how. By adopting this arrangement, YDS will be able to reduce its fixed costs while improving productivity and quality, thus enabling Yamaha Motor to meet future changes flexibly. This will be the second such system, following the parts center in Lyon, France.

Previously, Yamaha Motor's spare parts and accessories for Asia and the Middle East have been controlled by Japan headquarters, and directly delivered from stocks in Japan to local bases in these markets. However, in the complete built-up motorcycle business in the regions, the number of Asian models, exports of cross-trade products and complement parts are all expected to increase. Reflecting these developments, parts business management and parts distribution have been becoming increasingly complicated. Against this backdrop, Yamaha Motor has been called upon to integrate its regional parts supply and management capabilities by establishing a local parts control center. In terms of new products including accessories, growing the business through more rapid development -- capable of meeting changing market requirements -- has also been a crucial issue facing the Company.

By establishing YDS, Yamaha Motor plans to shorten the lead time in supplying genuine parts made in Japan from the current 45 days to 10 days. The Company will also reduce its parts inventory in Asian and Middle Eastern markets on a consolidated basis by 30% and cut distribution cost by 25% by 2005, compared with the respective figures for 2002. Thus, Yamaha Motor aims to offer more responsive customer service, while working to integrate its parts information management capabilities.