As semiconductor shortage persists, Yamaha focusses on making premium products

S Ronendra Singh | Updated on: Jul 25, 2022
Eishin Chihana, Chairman, Yamaha Motor India

Eishin Chihana, Chairman, Yamaha Motor India | Photo Credit: KAMAL NARANG

Affecting market share, but only way of survival, says Chairman Chihana

Yamaha Motor India has said the semiconductor shortage still continues, even though it is improving, and that is why the company is focusing on manufacturing premium motorcycles and scooters, which are more profitable as well.

“So far, our company is managing by optimising the best option in a very tight supply of semiconductors ... In January, it was very low, but each month it is improving by 5-10 per cent. It is not perfect yet and we are suffering a bit because the premium models are using more number of semiconductors because of LCD meters or other devices,” Eishin Chihana, Chairman, Yamaha Motor India, told BusinessLine recently.

That is, the company is managing production based on the number of available semiconductors every month and using them in more profitable models which are more in demand, especially in the motorcycle segment.

Market share affected

“For instance, last year, if we had 100 pieces of semiconductors, we were using 60 per cent for motorcycles and 40 per cent for the scooters. Producing motorcycles is more profitable than manufacturing scooters for Yamaha, not only for us but for the dealer network as well. This year, we are changing the model mix — if there are 100 pieces of semiconductor, we are putting 70-80 per cent to motorcycles and only 20 per cent on scooters,” Chihana said.

Having said that, he also added this is affecting the company’s market share partly, but that is the only way to survive because of the limited supply of the semiconductors.

Production capacity

Yamaha Motor India has two plants situated in Surajpur (Uttar Pradesh) and Kancheepuram (Tamil Nadu), where it manufacturers motorcycles, including R15 and FZ series, and Fascino and Rayzr series of scooters. Both the plants put together, the company has a capacity of 15 lakh units per annum, including for exports and the company is utilising only 55 per cent of the total capacity right now, Chihana said.

“Up to 2025, I think we don’t need to make a new investment (on expansion of capacities), as we may reach up the maximum level of production capacity by then, and we may have to invest after 2026,” he added.

Published on July 25, 2022
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