Yamaha Motor Co., Ltd. began construction today on a new motorcycle factory in the Lima Industrial Park in Batangas State, the Philippines, having invested 960 million pesos (approx. 2.5 billion yen) for construction. Manufacturing operations are scheduled to begin in January 2009 with a starting production capacity of 150,000 motorcycle units annually and an initial workforce of approximately 270.

The new factory under construction is located approximately 75km south of Manila on a 230,000m2 lot and will have a floor space of 44,000m2. When completed, it will take over the assembly of motorcycles presently conducted at the interim factory in Laguna State.

Currently, the 100% Yamaha Motor-owned motorcycle manufacturing and sales subsidiary Yamaha Motor Philippines, Inc. (YMPH), established in May 2007, is engaged in the assembly of 105cc to 135cc motorcycles at an interim factory facility in an industrial park in Laguna State since September 2007.

In the Philippines, demand for motorcycles is growing year by year backed by a stable domestic economy. In 2007, motorcycle demand grew 13% year-on-year to 700,000 units. Considering the present motorcycle ownership rate of approximately one unit for every 40 people, it is expected that demand will continue to grow in the future and reach a level of approximately one million by 2010.

Yamaha Motor entered the Philippine market in 1962 by signing a distributorship contract with Norkis Trading Co., Inc. and until the founding of YMPH, assembly and sales of Yamaha Motor motorcycles in the Philippines had been conducted through Norkis. However, the prospect of growing demand in the market led to the establishment of YMPH as a 100% Yamaha Motor-owned subsidiary with the capability to respond to market needs in a speedy and effective manner.

In Yamaha Motor’s new three-year medium-term management plan covering the period from 2008 to 2010, a "further growth in sales and profitability in the ASEAN region" is listed as one of the goals of the company’s business strategy, and the construction of the new factory in the Philippines is one of the initiatives of this plan.

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