Yamaha Motor Company believes India will play a critical role in its global two-wheeler business as the company enters the second year of its medium-term management plan.
Unveiled in December 2012, this initiative focused on reducing costs and expanding those markets critical to Yamaha’s two-wheeler growth. India, in particular, was identified as a region with tremendous potential even though the company’s market share here is little to write home about, when compared with Indonesia and Vietnam.
The Ray scooter has helped Yamaha begin its revival in India’s commuter segment, while the next big step is commissioning the second plant in Chennai, in early 2015.
In his message to shareholders this week, Hiroyuki Yanagi, President & CEO of Yamaha, referred to the India Integrated Development Centre, which has “proceeded with designs that meet local quality standards”.
Product development This year will see the two-wheeler maker plan a “rapid build of a development structure”, which will involve headquarters in Japan, to focus on advanced technology research and basic platform development.
Product development, on the other hand, will be dealt overseas to “tailor products to local markets”. Eventually, Yamaha hopes that in the next two years, 30 per cent or more of its products will be developed outside Japan.
This is where India will play a critical role as a manufacturing hub. The bikes produced here will not only be sold in the local market, already the biggest in the world, but also meet the needs of countries in Africa and other regions that are seeking low-cost options.
On the other end of the spectrum, India’s supplier base can work on a competitive cost structure to make high-end bikes a reality for Yamaha’s markets in Europe and Japan.
Affordable bike Yamaha has already indicated in its medium-term plan that India will be home to its most affordable two-wheeler in the world. Yet, during a recent visit to India, Yanagi played this down in an interview with Business Line, insistingthat making the “cheapest bike is not our goal and there seems to be some misunderstanding”.
On the contrary, he added, it was Yamaha’s endeavour to make good products for customers, which meant parameters such as performance, styling and safety were as important as the final cost.
In his message to shareholders, Yanagi says the second year of the medium-term plan will focus on “driving initiatives to anticipate economic and demand trends”. This is particularly important given that it is not the best of times in Europe and some emerging markets.
The essence of this change within Yamaha lies in Monozukuri (a Japanese term for engineering, manufacturing and marketing). As part of this effort, the company will focus on generating innovative concepts, superior technology and, as its President reiterates, achieving design that epitomises “refined dynamism”.
This year will see Yamaha launching new products that will combine high-quality manufacturing with innovation. This is intended to break out of “current work norms in the aspects of planning, development concepts, design specs, environmental technology and cost”.
As a result, the motorcycles produced will be full-scale global models. Interestingly, this year will also see the launch of a multi-wheeler, which “suggests a new kind of mobility”.