Yamaha 2009 Annual Report Download - page 8

Question 7
In what fields do you expect to see growth going forward?
Even in a tough economic climate, the market for electronic drums
as a new product category is expanding. In fiscal 2009, year-on-
year growth in these products was in the double digits. The
market response to our electric acoustic guitars has also been
outstanding.
In PA equipment, despite present stagnation caused by a
deteriorating economic climate, we anticipate growth in this field
over the medium term.
By market, over the medium to long term, we expect to see
growth in Asia, Latin America, Russia, and other emerging markets.
In China, along with our goal of another year of double-digit
growth in piano sales, we are expanding our activities for Yamaha
Music Schools to generate demand, and we plan to vigorously
pursue sales of digital musical instruments, PA equipment and
other products.
In Latin American markets too, particularly Brazil, we are
projecting another year of double-digit growth.
Demand in Eastern European markets, which had been
expanding relatively smoothly, has struggled over the last fiscal
year. Still, this region is home to a deeply rooted music culture,
so we expect business opportunities to blossom once the
economic climate improves, and will continue efforts to reinforce
our sales network.
We initially had high hopes for the Russian market, but the
collapse in resource prices has triggered an abrupt about-face
in market conditions. Here, we will push ahead with developing
our sales network and human resource training, and will
prioritize enhancing our business base to prepare for the next
stage of growth.
For one, our electronic drums and electric acoustic guitars are proving extremely popular.
We also anticipate growth in emerging markets.
Question 6
What is your outlook for fiscal 2010?
The global economic slowdown and the strong yen will continue
to make for an adverse market environment in fiscal 2010, so we
are projecting both lower sales and operating income year on
year. With that said, our goal is to end the year in the black. To do
this, along with continuing to pursue the performance
improvement program I discussed earlier, we plan to consistently
launch high-value-added products tailored to the needs present in
each business and region. At the same time, we will concentrate
our efforts to build a framework for future growth.
Question 5
What initiatives are you pursuing to improve earnings in the piano business?
In fiscal 2009, piano sales saw growth in the Chinese market, as
expected, of moderately priced, domestically produced products.
However, sales in Japan and the U.S. market of medium- and
premium-quality pianos made in Japan fell dramatically due to the
economic slowdown. This situation forced a massive scale back in
production at our factories in Japan, and caused earnings in the
piano business to worsen.
In reviewing our production bases from a global standpoint,
we decided to close piano factories in Taiwan and the U.K. in
order to further boost production efficiency. Yamaha piano
production will now be concentrated at three bases in Japan,
China, and Indonesia. Right now, we are focusing our efforts on
integrating and consolidating piano factories in Japan, with a
target completion date of summer 2010, and we hope to realize
integration benefits as soon as possible.
On the sales side, we will bolster efforts to expand sales in
areas of strength for Yamaha—namely the Disklavier player piano,
and our Silent Piano. In tandem, we are eyeing growth in the
domain of premium pianos, based on two key forces: recently
acquired Austrian piano manufacturer L. Bösendorfer Klavierfabrik
GmbH and Yamaha’s concert grand pianos.
We are scaling back production and integrating or eliminating production sites,
while at the same time bolstering efforts to expand sales of the Disklavier™ player piano, and the Silent Piano™.
06 Yamaha Corporation