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YAMAHA COUNTS COVID COST

Alongside Q1 2020 results, Yamaha provided a remarkably detailed breakdown of Covid-19’s impact on its motorcycle sales volume in key markets around the world, plus forecasts until the end of Q2. BDN financial editor Roger Willis reports.

The staggered pace of coronavirus infection meant a complicated picture, with sharply falling sales in some regions matched by rapid recovery in others.

Yamaha’s main developed markets in Europe, the USA and Japan were actually prospering overall in January and February with an averaged 18% rise. But then they flipped to 26% down in March and plummeted by 45% in April. The forecast for May and June is a 20% decline.

However, China escaped. In January and February, when the whole area around the huge city of Wuhan where the virus originated was locked down, it was apparently pretty much business as usual for Chinese elsewhere in the country. Yamaha sales were only 4% lower. They rebounded significantly in March as the epidemic subsided, climbing by 52%, and then more than doubled with an amazing 103% improvement in April. The prediction for May and June is a relatively modest 15% gain.

Yamaha Motor India took the most severe punishment. Owing to the Indian economic downturn, sales were already weak in January and February, 16% down. As the virus spread, March posted a 38% retreat, followed by a catastrophic plunge to absolutely zero bikes sold in April, when the whole country was locked down. May and June are forecast to be 50% in arrears.

South-East Asian markets were mixed. Vietnam was only 1% down in the first two months and 13% lower in March. Its spanking came in April with a 63% dive. But the May and June forecast is for a mere 5% loss.

Indonesia initially followed a similar trajectory — 4% up in January and February, 20% down in March and then plunging by 79% in April. The big difference, though, was a predicted even worse 80% shortfall in May and June.

The Philippines started from a lower base, 16% in arrears during January and February and falling by 56% in March. Sales in April were almost non-existent, diving by 96%. May and June are set to be 75% down.

Thailand hardly did better. Owing to both economic woes and the virus, sales had slumped by 18% in January and February. They then fell by 32% in March and 56% in April, and are forecast to halve in May and June.

In Latin America, where coronavirus was a late-comer. Brazil boasted 14% and 9% increases, respectively in January and February, and then March. By the time Brazilians were thoroughly diseased too in April, sales sank by 69%. But they are expected to recover, losing just 20% in the final two months of Q2.

Yamaha’s data also featured coronavirus-induced full factory shutdown periods and losses of working production days. European operations, at the former Motobécane motorcycle and scooter assembly plant in France and Minarelli bike engine plant in Italy, were shuttered completely for 33 days and lost 60 working days in total. That could mean inventory shortages going forward, of best-sellers like the French-built XTZ700 Ténéré.

Although actual shutdowns varied widely, average 60-day production standstills also affected Yamaha factories in Japan, South-East Asia and Brazil. India was 70 days adrift and listed as “partially operational” — as were locations in Japan, Vietnam and the Philippines. 

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