They were bitter foes in the 1980s whose ‘H-Y’ war became a reference point for a slew of management case studies. Today, Honda and Yamaha have decided to work together in a niche area of 50cc scooters whose presence is shrinking rapidly in Japan. The two made public their intent in October last year.
In an exclusive interview with BusinessLine , Hiroyuki Yanagi, President and CEO of Yamaha Motor, said the arrangement made perfect business sense. “The 50cc scooter market is very limited right now and exists only in Europe and Japan. Both Honda and Yamaha are struggling with this business and we thought of creating the best marriage this way,” he added.
According to Yanagi, the 50cc scooter in Japan is actually a case of “minimum mobility” since it forms a minuscule share of the market. It is in this backdrop that Yamaha and Honda are coming together to think of the best way to continue this product range going solely for the Japanese market.
For former rivals to bury the hatchet is pretty significant but Yanagi reiterated that not too much should be read into the famous Honda-Yamaha, or H-Y, war. “All this happened over 30 years ago. That was during the old generation management but we represent a new generation that thinks differently,” he said.
Beyond working together in the 50cc scooter space, the two companies will explore the possibility of collaborating in electric motorcycles and examine areas relating to range, charging time, performance and cost. Yanagi said electric bikes represented an important mobility initiative for the future.
“However, in the case of e-motorcycles, there are technological difficulties compared to four-wheelers. We will try and make a good alliance with Honda as each of us has some know-how in this space. If we can put that together, there will be better technology in the process,” he said.
Whether this will result in the creation of an all-new electric bike from Honda and Yamaha remains to be seen. “We don't know the future style yet but we do want to collaborate. In the motorcycle industry, while competition is very important, harmonisation is as critical,” he said.
Bringing these two elements together for the perfect mix would be the best bet forward for a successful partnership. Yanagi also made it clear that the collaboration with Honda should not be misinterpreted as the beginning of a stronger association in other areas. “I don’t know yet what could happen but we will have to wait and see if there is some outcome with this harmonisation,” he said.
Consolidation waveThe Yamaha CEO felt that too much was being read into the current wave of consolidation in the Japanese auto industry.
The last few months have seen Nissan picking up a stake in Mitsubishi while Toyota and Suzuki have also declared their intent to collaborate. Likewise, a coming together of Honda and Yamaha would have been inconceivable a couple of years ago. “I don’t think this is the case and there is really no consolidation happening in Japan. Each of these is a case-by-case issue in my view. As I have already said, harmonisation is the way forward with true competition remaining intact,” he said.