Kawasaki to Spin off Motorcycle business, Future unknown
Leading Japanese machinery maker Kawasaki Heavy Industries says it will spin off its struggling motorcycle and engine businesses next year as part of a major restructuring.
The company announced on Monday that it plans to spin off its motorcycle manufacturing and sales division and Rolling Stock division, which manufactures both conventional and bullet trains.
Kawasaki says it hopes the move will speed up decision-making and improve its financial situation.
Motorcycle sales in Southeast Asia have dropped sharply due to the coronavirus pandemic. The company expects to see an operating loss of about 5 billion yen, or 47 million dollars, for the current business year.
Kawasaki says it is strengthening intra-industry cooperation to address compliance with environmental regulations and other issues.
Kawasaki President Hashimoto Yasuhiko said at a news conference that he hopes the motorcycle business will continue to build the strong Kawasaki brand and revitalize the market through collaboration with other companies.
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Excerpt from Kawasaki statement
The Power Sports Business which comprises a part of the Motorcycle & Engine Business, includes motorcycles and off-road four wheelers, and is Kawasaki’s only mass-production consumer-facing business. Spinning off this business will speed up decision making, and by offering products and services in sync with customers – including new lifestyle offerings – Power Sports will further enhance its role as the flagship Group business building the strong Kawasaki brand.
In the short term, we will continue working to improve our financial situation. However, when taking a broad view of the industry as a whole, it faces significant issues such as an aging customer base and compliance with environmental regulations. Kawasaki is strengthening intraindustry cooperation – such as through joint development of electric drive and advanced safety technologies as well as greater commonality of functional parts – in order to catalyze growth in the Power Sports Business and achieve market revitalization.
The Motorcycle & Engine Business is also instigating innovative projects to capture new business opportunities. Its initiatives include extending corporate resources to mass-production businesses in cooperation with the Precision Machinery & Robot Business, collaborating in the agricultural machinery and turf care markets in hydraulic systems and general-purpose engines, and promoting the development of near-future mobility such as by incorporating robotics and remote technologies.
In a statement, KMC CEO Eigo Konya said:
As for operations in the United States, KMC will see no changes. All KMC’s tasks and missions will remain the same and KHI’s restructuring plan will only further enhance KMC’s ability to serve KMC’s customers by furthering KMC’s ability to be quick and efficient when studying the industry and the future of powersports. The Kawasaki brand in North America is strong and getting stronger even under the COVID-19 situation and we at KMC will continue our great mission of delivering Kawasaki products and satisfaction to our customers.”
The spin off is expected to be complete by October 2021.