Photo/Illutration Musical instrument maker Yamaha Corp. revised downward its annual operating profit forecast. (Asahi Shimbun file photo)

HAMAMATSU, Shizuoka Prefecture--Yamaha Corp.'s sales in China of equipment including pianos have hit a sour note following Beijing’s educational policy changes aimed at reducing extracurricular activities.

The musical instrument giant, based here, announced a downward revision of its operating profit following sluggish sales in China. 

Yamaha's annual operating profit, expected to increase by nearly 10 percent, is now predicted to be nearly 10 percent lower than the previous year, according to a company forecast announced on Nov. 1.

Compared to its forecast in August, the Japanese manufacturer expects sales to decrease by 5 billion yen to 465 billion yen ($3.1 billion). This is a 3 percent increase from fiscal 2022, which ended in March this year.

Operating profit is expected to decrease by 8 billion yen to 42 billion yen, down 8.4 percent from the previous year.

“We need to be less optimistic about the Chinese market,” Yamaha President Takuya Nakata told investors on Nov. 2.

In a marked contrast to growing sales in Japan, North America and Europe, Yamaha anticipates a 16 percent decrease in its sales in China compared to last year, driven primarily by a slowdown in sales of lower-priced pianos and electronic instruments.

China has seen strong growth in travel and other services, while sales of durable consumer goods such as cars and home appliances have been sluggish.

"Sales of services are not bad, but situations with goods are tough,” said Nakata. “This trend will continue into next fiscal year and beyond.”

In addition, the musical instrument industry is starting to feel the impact of China's "double reduction" education policy, which was launched in 2021.

The policy aims to reduce homework and after-school tutoring to curb the nation's intense academic competition. As a result, extracurricular activities such as music lessons are also facing setbacks.

“We can no longer take ever-growing sales for granted,” said Nakata, referring to the Chinese piano market, which has been thriving thanks to the country’s emerging middle class.

Outside of China, there are signs of recovery for Yamaha, such as sales of wind instruments, which were shunned during the COVID-19 pandemic.

The semiconductor shortage that plagued audio equipment production has also been resolved.

The manufacturer's domestic factories are now operating near full capacity.

"We need to find ways to boost sales of instruments other than pianos in China,” said Nakata. “As the products we sell change, we need to adapt our production processes accordingly."

He also announced that Yamaha would soon revise its midterm management plan for the period ending in March 2025.