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Yamaha Motor of Japan will use India as one of its four regional procurement bases to source parts for its two-wheeler operations worldwide.
The others are Japan, China and ASEAN which will jointly contribute to Yamaha's goal of keeping its costs in check. The target is to bring these overheads down by nearly Rs 5,000 crore in 2012 as part of a larger recast exercise.
Yamaha may not be doing big vehicle numbers in India yet but has been quick to recognise the potential its ancillary supplier base has to offer in terms of top quality parts at competitive costs. This will allow headquarters in Japan to focus on technologies while the global operations (primarily its ASEAN integrated development centres) will play a far more proactive role in product development.
Bike volumes
While its India bike volumes are slowly starting to build up, Yamaha has been more successful in Indonesia, Thailand and Vietnam where it closed 2011 at 4.6 million units. The target for this calendar is 5.5 million units of which nearly 40 per cent of its two-wheelers will have fuel injection options. This conversion (from the carburettor alternative) is expected to be complete by 2015 when production in these three countries will be over six million units.
As for India, Yamaha wrapped up 2011 with a little over five lakh units, of which a third was exported. The company has targeted 6.4 lakh two-wheelers for 2012 where exports will account for 1.9 lakh units. When it reaches its one-million milestone by 2015 (which has already been made public), exports will constitute 20 per cent and will head out largely to Central/South America and Asia.
India strategy
The Yamaha strategy for India is to build its brand presence in 150cc bikes where it has a market share of 20 per cent. The volumes for the future are expected to be generated from its new 125cc scooter keeping in mind the growth witnessed in this product segment over the last few years.
Over the years, Yamaha has struggled to get its India act in place despite the fact that it has been around for over 25 years now. Valuable time was lost in putting its house in order after the split with the Escorts group. Industry observers say the company also erred in its product strategy by trying to compete in the numbers game in motorcycles. It has since figured out that its DNA lies in powerful bikes which first drew India customers by the droves in the 1980s.
Scooters could just end up doing the trick for Yamaha in the coming years as it sets about working towards its targeted one million units in India. HMSI (Honda Motorcycle & Scooter India), TVS Motor Company and Suzuki have seen their gearless scooter businesses grow rapidly over the years and this will be the best bet for Yamaha too.
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