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- Mitsui & Co., Ltd.
Corporate Communications Division
Mitsui & Co., Ltd. (Headquarters: Otemachi, Chiyoda-ku, Tokyo; President: Shoei Utsuda) (hereafter Mitsui) and Yamaha Motor Co., Ltd. (Headquarters: Shingai, Iwata, Shizuoka Pref.; President: Takashi Kajikawa) (hereafter YMC) announce today the agreement that Mitsui will become a joint investor in the new motorcycle manufacturing company India Yamaha Motor Private Limited (IYM) established by YMC in October 2007.
Mitsui's investment will take the form of an allocation of new stock shares to a third party issued by IYM for the equivalent of 30% of the company's capitalization. In this way, IYM will increase its total capital to a planned 5.6 billion rupee (approx. 14.6 billion yen) and utilize the same factory and office facilities used by its predecessor, Yamaha Motor India Private Limited (YMI), to take over YMI's manufacturing and business operations beginning from April. Based on this, YMI will promptly begin the closing of its books and corporate liquidation.
Through the "Yamaha-Mitsui Strategy Committee" that was established following Mitsui's acquisition of 3% of YMC stock (announced May 2007), YMC and Mitsui have reviewed the possibilities for Mitsui's participation in various areas of YMC's business activities with the aim of strengthening its overseas business and cooperative ventures in other areas of business. The decision announced today is a result of these reviews and repeated discussions with a focus on a "comprehensive joint business venture in India."
In 1996, YMC established a joint venture company with local investment to begin the manufacture of motorcycles in India. Since 2001, the company has been operated as the 100% YMC-owned subsidiary YMI. Then in 2005, a separate sales company, Yamaha Motor India Sales Private Limited, was established, after which the Yamaha motorcycle business in India was conducted by two companies specializing in manufacturing and marketing respectively.
With the stable growth of the Indian economy as a whole, the Indian motorcycle market has grown to 7.3 million units in 2007, making it the world's second largest market in terms of demand.
The aims for the future are for YMC to aggressively introduce new high value-added models and promote a sales network strategy that includes expanding the establishments of directly-run showroom/dealerships and for Mitsui to use its strengths in logistics and dealer network development to achieve a synergistic effect that will stimulate a growth in sales of Yamaha motorcycles from 120,000 units (sales amount: 18.2 billion yen) annually in 2007 to 650,000 units (sales amount: 63 billion yen) annually in 2010 and improve the brand's presence in India.
|Location||Surajpur, Uttar Pradesh (utilizing the present Yamaha Motor India Pvt. Ltd. factory and office facilities)|
|Founding date||Oct. 17, 2007|
|Start of Operations||Apr. 1, 2008|
|Headed by||Tsutomu Mabuchi, President|
|Capital||1.5 billion rupee (approx. 3.9 billion yen) (as of Mar. 5, 2008), with plans to eventually increase capital to 5.6 billion rupee (approx. 14.6 billion yen)|
|Capital ratio||Yamaha Motor group 70%
Mitsui group 30%
|Business||Manufacture of motorcycles|
|Scale of operations||First year (nine months beginning Apr. 2008) projected sales of 10 billion rupee (approx. 26 billion yen)
* conversion rate: 1 rupee = 2.6 yen
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest annual report on Form 20-F, which has been filed with the U.S. Securities and Exchange Commission.
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