Mumbai: India Yamaha Motor Pvt. Ltd (IYM), the Indian arm of the Japanese firm will only turn a profit in 2009-10, after it has wiped out its existing debt, CEO and managing director Yukimine Tsuji said. However, he declined to disclose the debt amount the privately held IYM has on its books. “We have made lot of investments and introduced new offerings that have been successful, in the last one year. We would be a profitable entity by 2010,” he said.
Tsuji was the head of IYM’s manufacturing operations for two years before he took over as CEO in October. He maintained that the changes would not impact the company’s turnaround plans as the key focus and the direction remains intact.
Sprucing up: A Yamaha office in Greater Noida. The company’s Indian arm sold 40,000 units of its new models FZ-16 and R15, and grew 16% between April and November. Harikrishna Katragadda / Mint
As part of that strategy, the firm is replacing its 40-year-old facility at Surajpur in Uttar Pradesh with a brand-new one, as well as upgrading its factory in Faridabad which produces engines and machining and casting components.
Yamaha had pledged Rs800 crore in 2008 to restructure its India operations by 2010. While 30% of the money is to be utilized for new products, the rest was earmarked for restructuring at various levels.
“A brand new manufacturing unit for bike assembling will be coming up adjacent to the existing unit. The existing unit will be utilized for paint job and manufacturing of engines and some components,” Tsuji said of the Surajpur plant, which will make 400,000 bikes annually and will be operational in April.
The Faridabad upgrade will be part of a strategy to produce at least 50% of the components the company requires in-house, and source the remaining from vendors. “This would help us create a quality benchmark for our existing 170 vendors,” Tsuji said, but ruled out rationalizing the existing vendor base. The company will also increase the number of its dealers from the current 350 to 500 by the end of 2009, said Koji Arai, director and chief sales officer at IYM.
IYM sold 40,000 units of its new models FZ-16 and R15, and grew 16% between April and November. India’s two-wheeler industry grew only 2.5% in the same period.