Yamaha wants India to step it up

Hiroyuki Yanagi looks thoughtful when a colleague updates him on the number of engineers working in India’s R&D operations. “There are 40 engineers and this is not enough,” says the President, CEO and Representative Director of Yamaha Motor Company who was visiting last week.

And even while more hiring is planned for India, Yanagi makes it known that the company’s largest offshore R&D is in Taipei, Taiwan, with 250 engineers. “Indian R&D should be bigger than them,” he reiterates. The Taiwan team develops scooters for Yamaha across its global operations.

Yanagi believes India needs to accelerate the development of functions especially when it is already the Japanese automaker’s second largest production hub after Indonesia. Thus far, the India team has been focusing on competitive costs and quality while the next step will be more to do with the complete product itself. This is where all the years of training and experience will matter as Yamaha gets set for the next phase of growth.

“Many Indian engineers are experienced in motorcycle development and I expect them to play an important role and take the initiative,” says Yanagi. This becomes even more relevant in the context of the world’s most affordable motorcycle being developed in India and expected to carry a price tag of around ₹30,000.

Yanagi hopes India will continue to grow and become a strong business base for the company’s R&D, manufacturing and sales functions. “Lots of Indian products could be exported to other countries and from now on even to advanced markets also,” he says.

The Yamaha CEO is equally categorical about younger India developing global models and, hence, more R&D skills. In his view, the local management should take leadership positions eventually and this could even include holding key responsible positions in Yamaha’s overseas operations. “Indians are already global and doing well in the US and Europe and this could extend to Yamaha too,” says Yanagi.

The next big thing from Yamaha is, of course, the low-cost bike scheduled to roll out of the Chennai plant in 2017. It will be exported to Africa which has been identified as the next big growth lever for the company. “For us to make better business operations in Africa, support from India is critical. Product needs in the two countries are also similar,” says Yanagi.

While a section of industry is still sceptical about the low-cost bike’s price tag of ₹30,000 being in sync with quality, the Yamaha chief insists that the intention is not to be cheap but affordable. “We must create the best value for customers,” he says.

According to Yanagi, India will become Yamaha’s top market by 2020. At present, its output is a third of Indonesia’s tally of 2.5 million two-wheelers but with the ASEAN region slowing down, India is poised to get even stronger.

While scooter sales have been growing by leaps and bounds in India, Yanagi is not entirely convinced that motorcycles will end up taking the backseat eventually. It is his view that there will still be demand for sports motorcycles. “One of the benefits of scooters is automatic transmission but manual transmission in sports bikes is more fun. So you have the choice of convenience and fun and I think young Indians love (sports) bikes with manual transmission while others may seek automatic scooters,” says Yanagi.

Yamaha also launched its Tricity three-wheeler scooter in Thailand, Europe and Japan last year. According to its CEO, the feedback indicates that people in Europe are looking for new mobility options in the Tricity but are not traditional bike customers with a large chunk coming from the four-wheeled space. “They need diverse mobility solutions like the Tricity,” he says.

Likewise, Yamaha has been working on the Motiv city car which is scheduled to be unveiled at the Tokyo Motor Show later this year. Global trends show a need for diverse mobility solutions and this explains why the company has launched options like the Tricity with the city car due to follow.

According to Yanagi, mobility solutions are needed in markets characterised by urban design challenges. It is also his belief that a company like Yamaha has more flexibility than a carmaker in developing a four-wheeler. “Maybe we can offer a different value proposition in terms of styling and other characteristics,” he says.