Honda, Yamaha to Tie Up in Small-Scooter Biz

Tokyo, Oct. 5 (Jiji Press)--Honda Motor Co. <7267> and Yamaha Motor Co. <7272>, Japan's largest and second-largest motorcycle makers, said Wednesday they will tie up in the development and production of small scooters. Through the collaboration, the two firms will streamline their operations in the country's "Class-1 category" scooters with engine displacements of 50 cc or less, facing low profitability in a shrinking domestic market. Sales volume of motorcycles in Japan has dropped by more than 80 pct from the peak level in the early 1980s. In particular, small scooter sales have plunged to less than one-10th. The two companies aim to conclude a final agreement on the collaboration by March next year. Honda plans to provide Yamaha with small scooters on an original equipment manufacturer basis starting in 2018. Yamaha will outsource production of three scooter models, including its mainstay Jog, currently at its plant in Taiwan, to Honda's factory in Ozu in the southwestern Japan prefecture of Kumamoto. The two companies also plan to jointly develop scooter models to be manufactured by Honda, for use by businesses including delivery services. They will also work together to promote electric scooters. Other categories of motorcycles, such as 125 cc models, will not be subject to cooperation. "We concluded it would be difficult to address challenges single-handedly," Yamaha Director Katsuaki Watanabe told a joint news conference in Tokyo, referring to tighter environmental and safety regulations on small scooters. Yamaha first approached Honda about the tie-up, he said. "We once had cutthroat competition, but absolutely no bad feelings remain," Honda Operating Officer and Director Shinji Aoyama said of what is known as "HY war" around 1980. END