Yamaha’s Indonesian Motorcycle Sales Probably Met Target

Yamaha Motor CEO Hiroyuki Yanagi
Hiroyuki Yanagi, president and chief executive officer of Yamaha Motor Co. Photographer: Akio Kon/Bloomberg

Yamaha Motor Co., the world’s second-largest motorcycle maker, said it probably met a reduced 2013 sales target in Indonesia and expects to at least maintain the level of deliveries in its largest market this year.

Yamaha cut its 2013 sales estimate for Indonesia by 200,000 units to 2.55 million in August. The motorcycle maker will probably also beat its forecast for unit sales in India, according to Chief Executive Officer Hiroyuki Yanagi.

Motorcycle sales are recovering in Southeast Asia’s largest economy after the government tightened restrictions on down payments for homes and vehicle loans to reduce the risks of default. Industrywide two-wheeler deliveries slumped in 2012 before rebounding for the biggest annual gain in three years, according to Indonesia’s automotive industry association.

“Until a while ago, we were a bit conservative in our outlook, but it seems our results landed at a better level,” Yanagi, 59, said in an interview in Tokyo last week, citing preliminary sales figures. “It’s been a year since the loan restriction program and we’ve overcome that.”

Yamaha fell 4.2 percent, its biggest drop since Aug. 20, to 1,398 yen at the close of Tokyo trading. The benchmark Nikkei Stock Average dropped 2.5 percent.

The company, based in Iwata, Japan, may raise its internal midterm profit forecast on increased sales of more profitable models and cost reductions, he said. Yamaha has said it plans to introduce 250 new and updated models globally through 2015.

Sluggish Outlook

Sluggish investment, weaker external demand and higher interest rates mean Indonesia’s economic growth will slow to between 5 percent and 5.5 percent this year and next, the International Monetary Fund projected in an annual assessment on Dec. 16. The Southeast Asian nation is relying on investment to make up for flagging exports as it seeks to narrow a current-account gap that led the rupiah to be Asia’s worst performing currency in 2013.

“Considering how Indonesia’s economy is not in a situation where you can expect motorcycle sales to grow much, the fact that they’re considering even a slight increase is positive,” said Issei Takahashi, a Tokyo-based auto analyst at Credit Suisse Group AG. “If their plan through 2015 to implement cost cuts starts appearing, and if positive impacts from new models become apparent as well, we can look forward for more later in the year.”

Yanagi said the company has established a unit to begin development of four-wheel vehicles and will come up with a “rough idea” for the project this year. The final product will be suitable for both developed and emerging markets, he said.

The company is scheduled to report its full-year earnings on Feb. 12.

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