The inauguration of its Chennai plant is still a couple of months away but Yamaha is already contemplating its third facility in India.
The Japanese automaker has a unit in Surajpur, Uttar Pradesh, which can produce one million bikes and scooters annually. Capacity at the second plant in Chennai will be increased in phases to 1.8 million units by 2018.
“By this time, we should have a third unit coming up to take our overall numbers to over four million units by 2020,” a top company official told Business Line. In the process, India will emerge Yamaha’s largest region for production of two-wheelers, ahead of Indonesia and Vietnam.
According to the official, the western region of the country would be the ideal location for the third plant. “We already have operations in the north while Chennai will fill up the void in the south. The west is the best bet going forward,” he said.
It is here that Gujarat could end up bagging the Yamaha mandate for the new plant. It is already gearing up to play host to top brands such as Ford, Suzuki, Honda (two-wheelers and cars) and Hero MotoCorp. Gujarat is also quickly emerging as an alternative to Maharashtra as an auto hub in the west.
Yamaha is keen that its Indian operations play a big role in the new business plan for Africa, its next big market of the future. This also puts in perspective the role of its affordable motorcycle (estimated to be priced at around Rs 30,000) which will be produced in Chennai and shipped out to Africa.
For the first half of this calendar, Yamaha’s sales in India totalled 2.6 lakh units (from 2.03 lakh units in H1 of 2013) with Vietnam marginally ahead at 2.91 lakh units, a steep fall from last year’s 4.3 lakh units.
Numbers in Thailand for January-June crashed to 98,000 units from 2.11 lakh units in 2013 while Indonesia was at the forefront with sales of 1.3 million (1.27 million) units in H1 of this calendar.
From Yamaha’s point of view, the buoyancy in traditionally strong markets like Vietnam and Thailand is a thing of the past. And though Indonesia is chugging along without any hiccups, it is only a matter of time before India takes the top slot. This is thanks to its large base of young buyers coupled with a new role to service markets like Africa.
Clearly, the status of India has changed dramatically for Yamaha since the time it set up shop in the mid-1980s. What began as a dream run gradually turned awry after parting ways with the Escorts group. Today, Yamaha has identified India as an important sourcing hub for its global operations where the business will jump to Rs 360 crore (from Rs 60 crore) by end-2016.