Economic Pain

The global recession just keeps on hurting.  Yamaha Motor Company announced that they have some problems, financially, and they substantially cut their profit forecast for the year.

Yamaha Motor Co., the world’s second- largest motorcycle maker, fell the most in nine months after the company quadrupled its forecast to a full-year loss of 182 billion yen ($1.9 billion).

The company dropped 9.9 percent, or 120 yen, to 1,096 yen at the close on the Tokyo Stock Exchange. Yamaha, based in Iwata City, Japan, had previously forecast a net loss of 42 billion yen. It posted a loss of 74.7 billion yen in the first half.

The motorcycle maker cut its sales forecast by 12 percent as rising unemployment and falling wages reduces demand for Royal Star cruising bikes. Yamaha plans to close three factories in Japan over the next three years. The company cut its forecast for motorcycle sales in North America this year by 35 percent and lowered its prediction for European sales by 8 percent.

On top of the news from Yamaha, Honda also released some bad news today.

Honda Motor Co.’s domestic production of motorcycles is expected to fall 40 per cent on the year in fiscal 2009 as a result of stalled demand in Japan and delayed inventory adjustments overseas.

Honda’s Kumamoto plant, now its sole domestic manufacturing base for motorcycles, plans to produce 181,000 units this fiscal year, compared with slightly more than 300,000 units in fiscal 2008. The fiscal 2009 figure is also less than half of the facility’s annual output capacity of 460,000 units.

About 50 per cent of the motorcycles manufactured at the Kumamoto plant are for the domestic market, while 90 per cent of the units shipped overseas are for the North American and European markets. Owing to the global economic downturn, overseas and domestic demand has dropped sharply since last autumn, with midsize and large motorcycles among the hardest hit.

It’s a tough time to be in the pleasure/recreational vehicle business.

Author: Dale Franks

Dale Franks is the former host of The Business Day, ”a daily, four-hour business and financial news program on KMNY Radio in Los Angeles. From 2002-2004, he was a contributor on military and international affairs for TechCentralStation.com. Currently, he a publisher and editor of the monthly political journal The New Libertarian, as well as an editor of the popular web log, Q and O. Dale served as a military police officer in the United States Air Force from 1984 to 1993, in variety of assignments both in the United States and Europe, where he also was assigned to the staff of the Headquarters of Allied Forces Central Europe. In addition to broadcasting, writing, and speaking on various topics, Dale has also been a long-time technical training instructor on a variety of computer software and technology subjects. Dale has also long been involved with information technology as an accomplished web designer, programmer, and technologist, serving as the corporate knowledge specialist for Microsoft Outlook at SAIC, the nation's largest employee-owned corporation. Additionally, he is the author of a number of software user guides used for classroom training by one of Southern California’'s premier computer training and consulting firms. His book, SLACKERNOMICS: Basic Economics for People Who Find Economics Boring, is available from Barnes & Noble.