Hiroyuki Yanagi looks amused when asked about his company’s plans to make the world’s most inexpensive motorcycle in India.
“The cheapest bike is not our goal and there seems to be some misunderstanding. We try to make good products for customers, which includes performance and values,” the President & CEO of Yamaha Motor told Business Line on a recent visit to India.
While cost and price are “one such value”, Yanagi reiterates that the company will also focus on other parameters like styling, performance and safety. “It just cannot be cost,” he said.
Yamaha had recently announced that India would be the manufacturing base for this affordable bike, estimated to cost around Rs 27,000. This is in sync with its medium-term management presentation plan under which the company hopes to grab a 10 per cent share in India by 2017.
It is more likely, though, that the proposed bike will head out to Africa over the next four years. Yanagi reveals Yamaha is keen to develop the African market where almost all demand revolves around “business use” for the moment.
“People here are slowly shifting to personal use but they require low-cost bikes. One product from India could perhaps be used for the African market,” he said. Yamaha will attempt to meet this requirement in the interim with its China-made bikes which are priced competitively.
India is also home to the company’s top-end products like the R15 and the FZ series, which score on design and performance. “They are well accepted in various global markets,” he said. Going forward, Yamaha will look at exporting more of these models to Europe and Japan.
Yanagi is no stranger to India and had spent a couple of years (2004-06) here as Managing Director. Those were not the best of times with the company struggling to stay afloat after parting ways with its local partner, Escorts. “I feel Yamaha India has changed for the better since the time I was here,” he said.
At that time, the product line-up was not very strong and the company spent time trying to understand what customers wanted. It was after this research that products like the FZ, R15 and, more recently, the Ray scooter entered the scene. “I think we took slightly long to understand what was needed but we are making the right products now,” Yanagi said.
The Yamaha CEO believes that the top priority for India is to ensure a robust product line-up. “We must have good offerings in the volume zone to build market share and we will follow this strategy each year,” he said. Building the sales network is as critical and, while Yamaha has “done this successfully” in urban areas, a lot more needs to be done in smaller towns.
India has also been identified as one of the four regions for global procurement of components, the others being Japan, China and ASEAN. “These are critical centres because of their huge industrial size and presence of good suppliers with whom we will try to work jointly,” Yanagi said. From Yamaha’s viewpoint, advanced technology and high value-added businesses will be developed in Japan while local adaptation can be carried out in regional centres like India.