New Delhi: Halfway through its turnaround plan, Yamaha’s Indian subsidiary says it’s on track to achieve a 10% share of the two-wheeler market by 2012.
The company’s market share stands at 2.7% at present.
To get to 10%, India Yamaha Motor Pvt. Ltd had planned a three-pronged approach that included focusing on the 125 cc (by engine capacity) segment, launching a gearless scooter and ramping up its exports of motorcycles to South America and Africa.
“The premium segment, while doing very well for us is not going to give us numbers alone,” says Yukimine Tsuji, managing director of India Yamaha Motor.
On the fast track: The Yamaha bike plant at Greater Noida, Uttar Pradesh. Bikes such as the Fazer and the FZ-S have helped the firm to grow the fastest among two-wheeler makers in the country this fiscal. Ramesh Pathania / Mint.
So far, Yamaha has been known mainly for its offerings in the premium segment.
These products such as the Fazer and the FZ-S have allowed Yamaha to show the fastest growth among all two-wheeler makers in the country this fiscal, albeit on a low base.
The new launches have helped the company move its average monthly sales to about 18,000 units a month from 11,000 units a month last year. In August the company sold 19,508 motorcycles.
Last fiscal India’s two-wheeler market totalled 7.2 million units. Motorcycles made up 80% or 5.8 million of the two-wheelers sold.
Yamaha expects this number to climb to 10 million by 2012 and would have to sell a million units to get to a 10% share of the market.
“It’s a little ambitious,” says Hormazd Sorabjee, editor of Autocar India, referring to the target. “But what we’ve seen is they’ve come up with fantastic products which compensate for the lack of marketing muscle of the company.”
While Yamaha does not plan any new launches in the 125 cc segment, the company says it could refresh some of its models during the festive season. Tsuji declined to provide specific numbers on how many bikes the company aims to sell in the 125 cc segment.
It also plans to expand its dealerships in smaller towns and cities where buyers are more likely to prefer cheaper bikes. After adding 100 dealers last year, Yamaha will add 150 more in 2009, taking the total to 550 across India.
Exports would also see growth. Yamaha’s India plants have a combined capacity of 600,000 units annually. The company utilizes only a third of this. Tsuji says exports from India are very competitive when compared with China and so plans to ramp up exports partly to make use of this excess capacity.
At its plants, Yamaha has also rationalized manufacturing processes saving the company an estimated Rs30 crore annually. Manufacturing defects have reduced, resulting in 93% of bikes passing quality tests compared with 82% two years ago.
Last year, the company exported 38,537 bikes. Tsuji aims to take this up to 150,000 by next fiscal.
In addition to motorcycles, Yamaha also plans to ship between 8,000 and 10,000 engines every year to Indonesia.
Last year Yamaha has also announced plans to enter the scooter segment. The company now says the gearless scooter would have “Yamaha DNA” code for sporty, stylish looks and would be targeted at women. The scooter would be built on an existing platform and Tsuji hopes to sell 200,000 units a year within five years of the launch.
Hero Honda Motors Ltd’s Pleasure and Honda Motorcycle and Scooter India Pvt. Ltd’s Activa operate in this segment. Profit margins in the scooters business are anywhere between 3% and 5% higher than in the motorcycles business.