Yamaha Motor is preparing to release an all-new line-up of scooter models in India “in anticipation of the introduction of BS VI (emission standards equivalent to Euro 5) in 2020”.

The company made this information known during a recent analysts Q&A session in Japan following its first-half results. In a specific reply pertaining to the Indian motorcycle business, Yamaha admitted that it has been “struggling to grow our retail sales... only growing by four per cent compared with the previous year”.

Even when the scooter market growth has been high, the company’s retail sales “have only grown a little”. “We keenly understand that we need to work tirelessly to make many improvements to increase product competitiveness in this segment,” Yamaha stated in its response.

The silver-lining in the cloud is that sales in the motorcycle premium segment (where it is revamping its models) are growing and significantly contributing to profitability improvements in the India business. The company refers to the 20 per cent market growth in bikes and scooters during the first half of this calendar which only puts in context why it needs to step on the gas in a hurry.

Betting big on India

In a host of earlier interactions with BusinessLine , the Yamaha top management has reiterated that India is critical to its business, especially when it is the world’s largest two-wheeler market. Even while Indonesia is still its top-selling region, the potential in India is a lot greater by virtue of its sheer size. By the end of this decade, total production of two-wheelers in the subcontinent is expected to be 25 million units.

However, Yamaha just has not been able to make any significant impact in India for a host of reasons. It is up against stiff competition from Hero and Honda, which account for nearly two-thirds of all sales. Additionally, TVS Motor and Bajaj Auto are formidable rivals while Royal Enfield and Suzuki Motor are surging ahead strongly.

Yamaha was quick to realise that scooters were critical to its India growth story but even here it has had to contend with the likes of Honda, TVS and Suzuki.

Its Fascino has made a mark for itself in the market, but the need of the hour is volumes to keep dealers and customers proactively engaged.

The company has been doing a lot better in the premium motorcycle space with models such as the R3, R15, Fazer25 and the FZ-25 even though competitive pressure is intensifying here too. For Yamaha to make an impact in India, the key is to ensure that its core DNA of power and performance is present loud and clear in its bikes and scooters.

Focussing on an attribute of strength will still help the company stand out in a competitive arena like India as has been shown by Suzuki. By deciding to focus on 125cc scooters and premium bikes, the company has been growing rapidly and is now targeting sales of a million units by 2020.

Yamaha can likewise make a strong statement in technology when BS VI norms become a reality 18 months down the line. It will perhaps pull out a surprise in electric scooters too though no official statement has been made thus far. Clearly, this period will be a make-or-break situation for the Japanese two-wheeler maker.

Till about three years ago, things seemed a lot more upbeat with big plans to service markets like Africa. But this vision was thwarted by the collapse of markets like Nigeria. Going forward, there could be more global opportunities in the new BSVI era where Yamaha products can be shipped out to developed markets like Europe and Japan.

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