Yamaha Motor of Japan will manufacture the world’s lowest priced two-wheelers in India as part of a strategy to grab a 10 per cent share by 2017.
These details are part of the company’s new medium-term management presentation plan recently unveiled in Japan. It has indicated here that India will grow significantly, while Asean (Thailand, Indonesia, Vietnam and Taiwan) and Latin America (Colombia, Brazil, Argentina and Mexico) will see steady growth.
New projections
Yamaha estimates that India’s two-wheeler production will reach 16 million by 2015, of which, its share will be one million units (including exports). By 2017, output in the country will have increased to 20 million bikes and scooters and Yamaha’s share doubled to nearly 2.2 million units.
Going by these new projections, the company will step up the gas in India between 2015 and 2017, which could see the country emerge as one of its key global production hubs. From its point of view, India offers a reliable vendor base which offers the best bet in costs and quality. These can be leveraged to good use at a time the company is keen on slashing costs. Asean numbers, now at par with India, will begin to trail at 15 million in 2015 and 17 million (units) in ’17. However, Yamaha will continue to maintain a higher market share of nearly 35 per cent in this region, substantially higher than its India presence.
Yamaha’s top officials here have already gone on record to say that high-end models could be exported from India to Asean and Japan. Interestingly, low-cost bikes could find their way into countries like Africa which are poised to see two-wheeler good growth in the coming years.
The mass-segment will be the pivot to Yamaha’s growth in India, which has derailed badly over the last few years. It is now betting big on gearless scooters where the recently launched Ray is part of the revival plan. This product segment has seen an average growth of 20 per cent in India with Honda ruling the roost with its Activa and Dio models.
While the Ray is expected to put Yamaha back on track and will (in all probability) be joined by other gearless scooter variants, observers believe the real action will begin when it drafts its comeback plan for bikes. The mid-term management plan emphasises on making the world’s lowest priced products in India which means customers could have a host of options in the sub-Rs 35,000 range. Honda is also expected to be an active participant here and the market could see some interesting dynamics play out in the process especially with the presence of strong local players like Hero MotoCorp and Bajaj Auto. Yamaha will also use India as one of its four regional procurement bases to source parts for its two-wheeler operations worldwide. The others are Japan, China and ASEAN which will jointly contribute to the Japanese automaker’s goal of keeping costs in check.