January 23, 2002

Medium-Term Management Plan Review

YAMAHA has carried out a review of its medium-term management plan, Kando Creation 21, which was drafted last year to set guidelines and targets for the three-year period ending March 31, 2004. The review afforded an opportunity to revise medium-term performance targets in line with international economic developments and changes in the Company's operating environment. It also enabled YAMAHA to ensure that its business practices remain in compliance with the three broad themes set forth in the plan: "striving for growth," "consolidated Group management," and "increasing corporate value, enhancing the YAMAHA brand." Based on the review, YAMAHA has revised its performance forecast downward for consolidated net sales from ¥610 billion to ¥560 billion and consolidated recurring profit from ¥30 billion to ¥20 billion.

Outline of the Medium-Term Management Plan Review

Striving for growth
In YAMAHA's core sound- and music-centered operations, the Company is consolidating its resources and promoting a media synthesis strategy, which seeks to employ synergies generated through the fusion of hardware, software and content as a means of achieving growth.

Core Business Group (sound- and music-centered operations)
In the Core Business group, the performance forecasts for YAMAHA's semiconductor and content businesses have been revised upward to reflect the rapid expansion of the ringer melody distribution market. However, the markets for musical instruments and AV/IT products have deteriorated as a consequence of stagnation in the domestic musical instrument market, decelerating demand growth in North America, falling prices for CD-R/RW drives, and other factors. In light of these considerations, the performance forecasts for musical instruments and AV/IT products have been revised downward.

YAMAHA is making a strong effort to boost the profitability of its operations by strengthening the products comprising its primary earnings base. In addition, the Company is working to broaden its product line by developing new products, which will serve as additional sources of revenue.

Primary policies by product category are as follows:

[Musical Instruments]

-	Establish a investment holding company in China (see attached sheet)
-	Strengthen operations in the market for music production equipment
-	Take measures to stimulate demand in the market for adult music education
-	Strengthen the competitiveness of existing products

[AV/IT]

-	Implement strategy to become number one in home theaters (strengthen visual entertainment products)
-	Shift to high-value-added business model for CD-R/RW drives
-	For routers, shift to business model designed to provide solutions for enterprises as well as small offices and home offices (SOHOs)

[Semiconductors]

-	Maximize mobile phone audio chip business

[Content Business]

-	Globalize content delivery services, including the ringer melody distribution service

Lifestyle-Related and Leisure Group (business units sharing the YAMAHA brand)
The Lifestyle-Related and Leisure group is facing severe market conditions with little prospect of significant medium-term growth. However, in accordance with the medium-term management plan, YAMAHA is sustaining a process of selective resource allocation to strengthen its business structure and boost profitability.

Electronic Parts and Materials Group (business units working to link technologies)
YAMAHA has revised its performance forecast for the Electronic Parts and Materials group in line with recent economic developments, including major market changes precipitated by the bursting of the IT bubble. In the midst of this background, YAMAHA is focusing on the efficiency of its investment activities and working to maintain a competitive advantage in terms of both cost and technological quality. This will enable the Company to achieve renewed growth as the market gradually recovers.

Consolidated Group Management
In line with the medium-term management plan, YAMAHA is introducing a new management system that reflects the structural changes attending the Company's shift from non-consolidated to consolidated Group management. In addition, the Company is reforming staff working practices to improve efficiency, rebuilding its main frame information system into a globally connected network, and promoting supply chain management (SCM).
YAMAHA aims to achieve substantial cost reductions, which will involve a review of the Company's business locations from a global perspective. Furthermore, the Company will implement policies calling for human resource development as well as more flexibility and diversity in its human resource structure and working practices.

Increasing Corporate Value, Enhancing the YAMAHA Brand
During fiscal 2002, YAMAHA has continued to emphasize the importance of internal corporate communications by issuing an in-house brand book, Kando Press, and organizing an event called "Kando of the Year." The Company is making a concerted effort to achieve a deeper understanding and heightened awareness of the YAMAHA brand among Group members. Externally, YAMAHA is focusing on IR activities and has made changes to the way in which the shareholders' meeting is held.
Plans are on track to establish a product strategy that will enhance the YAMAHA brand, implement a brand strategy covering both YAMAHA CORPORATION and YAMAHA MOTOR CO., LTD., and thoroughly outline the rules governing the use of the YAMAHA brand.

Performance Forecast

Performance Forecast for the Period Ending March 31, 2004

	Revised Forecast	Initial Forecast
Net Sales	¥560 billion	¥610 billion
Operating Income	¥25billion	¥34 billion
Recurring Profit	¥20 billion	¥30 billion
ROE	6.6%	9.5%
FCF	¥7 billion	¥17billion

For further information, please contact

Yamaha Corporation

Public Relations Division
Corporate Communication Group
TEL. +81-3- 5488-6601

2-17-11 Takanawa, Minato-ku,
Tokyo 108-8568


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