Yamaha gets set to pitch India on top of the world

Hiroyuki Yanagi believes it is only a matter of time before India overtakes Indonesia to emerge as his company’s largest two-wheeler market in the world.

“India is much bigger than Thailand and will be our most important market going forward. Indonesia volumes are still way ahead but India is fast catching up,” the President & CEO of Yamaha Motor told Business Line during his stopover at the Auto Expo.

Yanagi is quite familiar with India where he was part of the leadership team a decade ago. Those were hard days but the Yamaha of today is raring to go with a new plant scheduled to be commissioned in Chennai towards the end of this year. “I do think India will be really big for Yamaha in the coming years and could be our top market by 2020,” he says.

Today, this may seem a tall claim considering that volumes in Indonesia in 2013 totalled 2.5 million units, nearly four times India’s tally of 6.51 lakh units. Yet, the gap is narrowing given that Yamaha has projected 8.30 lakh bikes and scooters for India in 2014 with Indonesia up a tad at 2.6 million units.

“We can see one million units in the near future. We have done a lot of preparations for the new India factory and are ready for the future. The foundation is in place and we only need to get the right products,” Yanagi says.

From Yamaha’s point of view, the importance of India just does not stop with the domestic market but a larger global role. For instance, exports already account for over 25 per cent of its output and this component could grow even further as the company optimises the skills available here. These include an optimal mix of costs and quality from its Indian ancillary supplier base which will be part of bigger global programmes in the future.

“Indian two-wheeler models that are exported are popular across the world and people are very happy with these iconic bikes. In my view, India is becoming much more global for Yamaha. The future could see an interesting mix of bikes make their way into the world,” Yanagi says.

The role of India could get even bigger during the course of this decade as Yamaha begins plotting its strategy for Africa. There are already indications that the company is planning to produce the world’s most affordable bike in India which is likely to be shipped out to select markets in Central Africa.

Yanagi, however, believes there is a larger role ahead if things do work out according to plan. “I was in Africa recently and saw a couple of markets. It will take time for things to expand and India will then become very important in the scheme of things,” he says.

Beyond products, Yamaha is keen on exporting Indian know-how to Africa which will include skills in engineering and marketing. Yanagi says this is “the unique style of Yamaha” which will be exported from India to Africa. As he puts it, there are several segments which could grow in Africa beyond just low-cost bikes.

Even as this ambitious plan is a critical part of Yamaha’s roadmap here, the top priority would always be the Indian domestic market by virtue of its sheer size and potential. The company is only too aware of the fact that each year is seeing more and more youngsters making a beeline for fancy scooters and bikes. It is this buoyancy that is expected to see India produce over 20 million two-wheelers over the next five years.

“We want the right image for the Yamaha brand here and this means a top-class line-up of products with a high quality image. We want to show customers the unique style of Yamaha,” Yanagi says. The present slowdown, he adds, is not too worrying as trade cycles are inevitable in business.

Yamaha’s comeback script for India began with the Ray scooter which has made a mark in the commuter segment.

Though motorcycles continue to account for a lion’s share of two-wheeler sales, scooters are also growing rapidly and take up nearly 20 per cent of total numbers.

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