Two of Japan's best-known motorbike companies have announced plans to join forces.

Kawasaki and Suzuki have seen their market share around the world fall, in part because of increased competition from US giant Harley Davidson and Germany's BMW.

On top of that, an aging population in Japan and around the world has meant that there are fewer young people to buy the bikes that symbolise youth and rebellion.

The deal covers product development, procurement and production.

"We decided to join forces to raise our profitability by reducing costs amid increasing competition in Europe, North America and Asia," a Kawasaki spokesman said.

Crowded market

Suzuki and Kawasaki are the third and fourth largest bike companies in Japan.

Honda and Yamaha are the top two bike companies respectively.

All four companies have seen their share of the European market fall from 80% to 50%.

Overall Japanese bike shipments have dropped from a peak of 3.3 million a year in the early 1980s to 744,000 in the past year.

This can in part be attributed to the aggressive marketing of rivals such as BMW and Harley Davidson.

Motor Cycle News editor Rob McDonald said that the "global motorcycle market is healthy", it is just the Japanese share of it that is falling.

"This is all about reducing their cost base, so they can compete globally," he told the BBC's World Business Report.

"They will keep separate identities, motorcycling is a very passionate subject, people are very passionate about the bikes they ride," he said.

Saturation point?

Only last week, the manufacturer of the iconic US motorbike announced plans to build its market share in Europe.

After going bankrupt in the 1980s, Harley Davidson is now prospering.

However it fears it could be approaching saturation in its home market and wants to build exports, which account for only 25% of its sales.

The Japanese companies are also pinning their hopes on markets in countries such as China and India.

Many of the 11 million motorbikes sold in China last year were copies of Japanese designs.

Last year, Suzuki saw its sales in China fall by 70%.

Other Japanese companies are struggling to keep apace with competition.

Yamaha has promised to cut costs by 30% by the end of the 2004/05 business year to improve its cost efficiency.