E-cycle foray marks Yamaha’s new mobility mantra

In his first media interview since he took over as group chairman of Yamaha Motor India, Motofumi Shitara told this writer in June that the country had enormous potential for a host of mobility options.

This thought process was in line with what headquarters in Japan has been emphasising for a while now: Yamaha is a mobility company whose expertise goes beyond motorcycles.

It is in this backdrop that Wednesday’s announcement is interesting where the Japanese automaker has joined hands with Hero Cycles to develop electric-assisted bicycles in India.

Here Yamaha Motor will supply the Indian company with e-kits, the power source designed for e-bicycles. Tests will begin early next year in a few cities, beginning with Delhi where the emissions threat has been particularly severe over the last few weeks.

In an email response to BusinessLine , Shitara said, “Yamaha is a personal mobility solutions company which keeps on developing and innovating new technologies to meet the changing requirements of our customers worldwide. Our headquarters, Yamaha Motor Co has been in the business of electric-assisted bicycle since the last 25 years.”

The Yamaha India chief also reiterated that the alliance with Hero Cycles intends to evaluate the business possibilities available for electric-assisted bicycles in India. “This alliance will be only for a limited number of bicycles and future course of action will be decided later,” he added.

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Clearly, Yamaha sees potential in the Indian bicycle market, which is 15 million units annually but still behind sales of motorcycles and scooters, which are over 20 million units. E-cycles could gain ground in the coming years, though it remains to be seen if their momentum can keep pace with scooters.

Yet, from Yamaha’s point of view, this is an important foray that reflects its view on mobility solutions arising from rapid urbanisation across the world. This also explains why the company has developed products such as the three-wheeled Tricity for markets in Europe and ASEAN.

Shitara, however, made it clear in the interview that there was still some time to go before attempting to market these solutions in India. “Perhaps, we can do more with other products in the future though these are early days yet. With faster motorisation, there will be changes but nothing is decided yet,” he said.

According to Shitara, even an option like the Tricity would have to wait longer before Yamaha even contemplated bringing it here. In his view, Tricity was a “difficult option” for India because of road infrastructure and speed breakers. And even while e-kits for bicycles marks a new beginning in India, the company would rather reboot its two-wheeler business which is yet to take off in a big way even after three decades of operations.

In fact, this fact has come to light in a recent Q&A session with analysts in Japan some days after Yamaha declared its third quarter results for 2018. The company admitted that income from sales in India and Vietnam could have been much better even while Indonesia was back on track after a long lull.

“Given that the fourth quarter is the high season we are working to make as much recovery as possible, but as we now project that the original forecast cannot be reached, we have accordingly revised the forecast downwards,” stated Yamaha.

Elaborating on the subject, the company said sales of its premium motorcycles in India were healthy. However, in the scooter market, where total demand is growing, it was struggling due to competitors launching new 125cc models. “We are already making preparations for the future by working on product development,” added Yamaha.

The situation was similar in another promising market, Vietnam, where “the tough situation since last year is continuing, with sales this year again falling further than our initial forecasts”.

In the scooter segment, Yamaha is working to reverse this situation next year by planning new model launches along with active sales promotion and marketing.

However as already indicated, the energy is back in Indonesia and the company is confident that “steady progress will continue in the fourth quarter and next year”. In the Philippines, likewise, sales have been buoyant and even while “competitor initiatives are intensifying”, Yamaha is projecting a similar pace of growth will continue in 2019.

India focus on core DNA

While acknowledging that Yamaha had to make up for lost time in India, Shitara was confident that it remained an attractive brand for the Indian customer whose value now needs to be better leveraged. This is why the company will focus on its core DNA of staying true to the premium space in bikes and scooters.

“There is a lot of energy here with young buyers. Indians should eventually like buying Yamaha products and this is what I aspire for as a commitment and target,” said Shitara.

To that extent, making a foray into e-cycles is fine but the real challenge lies in the conventional two-wheeler business where competition is intensifying by the day, especially from Royal Enfield and Suzuki.

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