Yamaha to build big engines for motorcycles, ATVs in Indonesia
Sharing parts also planned to improve productivity and margins
TOKYO -- Yamaha Motor is repurposing idle capacity at Indonesian production facilities to churn out large engines for motorcycles and all-terrain vehicles.
The Japanese company plans to invest billions of yen, or tens of millions of dollars, between 2017 and 2019 to prepare lines with the capacity for some 10,000 to 20,000 large engines a year.
These will be exported to the West, where leisure demand is strong for large motorcycles and ATVs, also known as four-wheelers.
In Japan, Yamaha uses facilities in Iwata, Shizuoka Prefecture, to build roughly 200,000 engines a year for motorcycles and around 50,000 engines a year for four-wheelers.
The company plans to shift a portion of the production for engines larger than 700cc from there to Indonesia, where a cooling of motorcycle demand has left plant facilities with unused capacity. The Southeast Asian nation's motorcycle market has declined since hitting a peak of 8 million units in 2011.
Yamaha plans to use the Indonesian facilities to make motorcycle engines starting this year. It has already begun making parts for four-wheeler engines and expects to also begin full assembly of these engines there in 2019.
Efforts to boost productivity are also progressing. The company plans to add more models of motorcycles in 2018 but at the same time intends to use about 20% fewer types of engines compared with 2015.
The goal is for 60-70% of ATV-use engines to also be usable for snowmobiles and personal watercraft. Sharing parts across product lines in this manner will enable Yamaha to raise unit profit margins.