Yamaha sees sales slump in major markets

Tokyo: Yamaha Motor Company, the world's second-largest motorcycle maker, said sales in North America and Europe may fall twice as much as forecast as a spreading debt crisis damps demand. The shares fell the most in three months.

"From May, there has been a sudden impact from the Greek crisis," Chief Executive Officer Hiroyuki Yanagi said in an interview in Tokyo on Wednesday. Combined sales in North America and Europe may decline as much as 20 per cent this year, compared with an earlier estimate for a drop of about 10 per cent, he said.

Slumping demand for motorcycles in developed countries is forcing Yamaha to slash jobs and close plants. The company will shut five factories in Japan and one making boats in the US by 2012, adding to the closure of a motorcycle plant in Italy last year. Yamaha will cut as many as 1,000 jobs this year after eliminating 1,100 positions in 2009.

The company last year posted its first loss since the year ended April 1984 as sales tumbled 45 per cent in North America and 25 per cent in Europe. Yamaha's motorcycle sales in the two markets made up 25 per cent of its global two-wheeler revenue in 2009, down from 31 per cent a year earlier. Declining demand for large leisure-oriented models in the US, such as the 1.3-litre $19,690 (Dh72,306) Royal Star Venture, contrasts with a recovery in car sales.

Sales in Asia excluding Japan this year may exceed a 14 per cent growth forecast made in February, Yanagi said. Yamaha expects to break even this year, and Yanagi declined to comment on whether it would revise its forecast before the company's second-quarter earnings announcement on August 4.

After the company posted 7.5 billion yen (Dh310 million) in first-quarter net income on May 12, "there has been expectation in the market that the company will raise its forecast," said Kohei Takahashi, an analyst at JPMorgan Chase & Company in Tokyo. A reiterated forecast "would be a negative surprise", he said.

Honda Motor Company, the world's largest motorcycle maker, said in an April presentation it expects its two-wheeler sales in North America and Europe to drop less than 1 per cent to 385,000 units in the fiscal year ending March 31.

Harley-Davidson Incorporated, the largest US motorcycle maker, may report sales in the quarter ended June 30 fell to $1.13 billion from $1.28 billion a year earlier, according to the average of eight analyst estimates compiled by Bloomberg.