India is on its way to becoming Yamaha Motor Company’s second largest two-wheeler market by the end of 2015. In the process, it will overtake Vietnam which has been traditionally been the company’s most important region for business after Indonesia.

According to Yamaha’s projections which were made public in Japan some weeks ago, India is expected to wrap up this calendar with 7.18 lakh units, nearly 30 per cent up from 2014’s tally of 5.67 lakh units.

Vietnam will slip to third place with 6.7 lakh units even though this marks an improvement from 6.43 lakh recorded last calendar. Indonesia will continue to rule the roost with 2.5 million units, up from 2.37 million recorded in 2014.

The interesting thing about India that exports will account for an additional 1.78 lakh bikes and scooters, bringing total production closer to nine lakh units. This is quite a sizable jump from 7.39 lakh units in 2014 which included exports of 1.72 lakh units. Other markets in the ASEAN region are clearly in the flat zone for Yamaha with Thailand expected to do 2.5 lakh units this calendar (2.23 lakh in 2014) with Taiwan slightly behind at 2.36 (2.1) lakh two-wheelers. China, which is rapidly becoming a car market, has been projected to do 4.45 lakh units, almost at par with sales in 2014.

Strong contender It is all too clear that India is emerging one of Yamaha’s most important markets and could even overtake Indonesia by the end of this decade. The company’s Chennai plant begins production this year and capacity here will be increased in phases to 1.8 million units over the next three years. By this time, its overall production (along with the Surajpur facility) will be 2.8 million units bringing it very close to Indonesia.

It will also be interesting to see if the constant increase in demand will prompt Yamaha to set up a third plant. With a manufacturing presence in the north and south, a location in the west makes sense and this is where Gujarat could possibly emerge a top favourite.

Not only will this give the company easier access to important markets like Maharashtra and Madhya Pradesh but will also permit exports thanks to Gujarat’s robust presence in ports. All this will fit in with Yamaha’s plans to make India a key global hub for its two-wheeler business.

Africa has already been identified as the next important growth region and this is where shipments from its India plants will be an important part of the strategy. The most affordable motorcycle which is being planned in Chennai could be an ideal fit for markets in Africa where such products double up as ideal commuting options.

Ready for revival On a more pragmatic level, Yamaha has just about begun its revival script for India after years of being in the wilderness. Its Ray scooter helped boost numbers while the motorcycle strategy will focus on the premium segment where the FZ series is already making an impact.

In this backdrop, it will be interesting to see how the low-cost bike will be positioned. After all, Yamaha will be keen to conserve its now resurrected brand image in the Indian market. Its leadership team has constantly reiterated that low-cost does not mean ‘cheap’ and that the bike will have all the attributes of the Yamaha DNA.

India’s two-wheeler market is projected to reach nearly 30 million units by 2020 and the current momentum indicates that Honda could be on its way to grabbing the top slot. Hero is still the market leader, though, but its former Japanese ally is stepping up the gas big time with new plants and a host of products on the anvil.

Other competitors like Bajaj and TVS are as determined to stay in the race which means Yamaha will have its work cut out in the coming years.

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