Summary of Business Results for the First Half of the Fiscal Year Ending December 31, 2012

Yamaha Motor Co., Ltd. has released its consolidated business results for the first half of the fiscal year ending December 31, 2012. Despite an increase in sales of motorcycles and the marine product business in the United States, the power products business and automobile engine business, a decrease in sales for motorcycle businesses in Asia, Central and South America and Europe and a 36.2 billion yen loss due to the effects of the appreciation of the yen led to a 4.7% drop in net sales from the previous fiscal year to 632.2 billion yen.

As for income, there was growth resulting from increased production of U.S. market motorcycles and outboard motors in Japan, plus increases due to cost reduction efforts, drops in the cost of raw materials and reduced company expenses. However, the decline of motorcycle sales in the emerging markets, the effects of the appreciation of the yen, the effects of the accrual for product liabilities, the increase in development costs for future growth and more resulted in a 49.9% decrease in operating income from the same period of the previous fiscal year to 20.8 billion yen, a 50.6% decrease in ordinary income to 24.1 billion yen and a 49.8% decrease in net income for the quarter to 14.5 billion yen.

Compared to the initial fiscal forecasts (25.0 billion yen in operating income, 26.0 billion in ordinary income and 11.0 billion in net income for the quarter), operating income and ordinary income fell below the targets but net income for the first half-year exceeded the target by 3.5 billion yen due to factors like the difference in ratios of the tax burden in various countries and regions.

On the foreign exchange front, the average exchange rate of the yen during the period under review appreciated by two yen from the same period of the previous fiscal year against the U.S. dollar to 80 yen, and by 12 yen against the euro to 103 yen.

In the Motorcycles business segment, demand in the U.S. market showed signs of having bottomed out and beginning a recovery that led to increased sales. In Europe, the launch of the new TMAX model has gone well but demand remains low in southern Europe and other regions, resulting in reduced sales. Meanwhile, in the emerging markets we recorded increases in sales in the Thai market, where our new models have been well received, and the Indian market with its continued overall growth. However, in Indonesia and Brazil, tightening of sales finance has caused a drop in demand and our sales have declined in the midst of factors such as the initiation of inventory adjustments to accommodate the new lower levels of demand. As a result, there was a 10.5% decrease in motorcycle sales from the same period of the previous fiscal year to 3.11 million units, and due to this decrease in unit sales and the effects of the appreciation of the yen, net sales decreased 10.3% to 414.7 billion yen and operating income decreased 80.8% to 4.5 billion yen.

In the Marine business segment, a recovery in demand in the U.S. led to sales increases in the outboard motor and personal watercraft sectors. Also, outboard motor sales continued to rise in areas like Russia, Asia and Central and South America, while in Japan, demand resulting from the earthquake and tsunami recovery efforts contributed to increases in sales of fishing boats, utility boats and outboard motors. These factors contributed to an 11.3% increase in net sales from the same period of the previous fiscal year to 113.6 billion yen and an 80.2% increase in operating income to 10.6 billion yen.

In the Power product business segment, there was a decrease in sales of all-terrain vehicles (ATVs) in the U.S. and other markets, but in Japan, greater concern for disaster preparation contributed to a growth in sales of generators. These factors absorbed the negative effects of the appreciation of the yen and resulted in a 2.1% increase in net sales overall from the same period of the previous fiscal year to 45.7 billion yen. Due to factors such as the effects of the accrual for product liabilities (9.9 billion yen last year, 1.0 billion this year), operating income decreased by 95.4% to 0.3 billion yen.

In the Industrial Machinery and robots segment, demand for surface mounters remained strong in Japan where the market for products like smartphones and tablet devices is steady, but an overall trend towards tightening facility investment in Asia, Europe and North America led to a decrease in net sales. As a result, net sales as a whole decreased by 2.4% from the same period of the previous fiscal year to 17.5 billion yen, while an increase in development costs and other factors contributed to a 17.2% decrease in operating income to 3.1 billion yen.

In the Other products segment, net sales of automobile engines rose due to the effects of last year's earthquake and tsunami but sales of electrically power assisted bicycles decreased compared to the same period of the previous fiscal year. As a result, net sales for the Other products business overall rose 12.5% from the same period of the previous fiscal year to 40.7 billion yen while operating income decreased 13.4% to 2.3 billion yen.

The forecast for consolidated business results for the full fiscal year ending December 31, 2012 is based on the assumption that the business environment for Yamaha Motor will continue to be an extremely harsh one in which the exchange rate of the yen will remain high, the economic crisis in Europe will be prolonged and the pace of growth in the emerging markets will slow, among other factors. In the motorcycle business, we have experienced a decrease in sales due to tightening of sales finance in emerging markets and the delay in the spread of new models in the Indonesian market. In response to these circumstances, Yamaha Motor will continue to introduce new models and more to strengthen sales as well as make inventory adjustments with the aim of swiftly achieving sound conditions in our distribution inventory. In addition, despite decreasing raw material prices, cuts in company expenses and the increased income we expect in the marine and power product businesses, the negative effects of the decreasing sales of motorcycles in the emerging markets will be great enough that we expect net sales, operating income and ordinary income for the full fiscal year to fall below the initial forecasts announced on February 15^th of this year.

Consolidated business forecasts for the fiscal year ending December 31, 2012 have been revised downwards as follows: net sales of 1,200 billion yen (76.2 billion yen decrease from the previous period, 200 billion yen lower than initial forecast); operating income of 28.0 billion yen (25.4 billion decrease from the previous period, 17.0 billion lower than forecast); ordinary income 34.0 billion yen (29.5 billion decrease from the previous period, 13.0 billion lower than forecast); net income of 17.0 billion yen (10.0 billion decrease from the previous period, same as initial forecast).

The exchange rates forecast for the full year are 78 yen to the U.S. dollar (two yen higher than the previous period and 1 yen lower than the initial forecast) and 102 yen to the euro (nine yen higher than for the previous period and 2 yen lower than the initial forecast).

Recognizing that shareholders' interests represent one of our highest management priorities, Yamaha Motor has been striving to maximize its corporate value through a diversity of business operations worldwide.

With regard to dividends, our basic policy is to answer the expectations of our shareholders by maintaining a long-term viewpoint on dividend payments that takes a broad range of factors into account such as consolidated business results in determining dividend payment ratios.

As for the year-end dividend for the fiscal year ending December 31, 2012, we envisage a year-end dividend of 10 yen per share (5 yen at the end of the second quarter and 5 yen at year end) based on a dividend ratio of 20% of consolidated net income for the full fiscal year. (No change from the forecast announced on February 15, 2012.)

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