Yoshihiro Hidaka insists that he is optimistic about his company’s prospects in the Indian market.
“We have to fight,” the President & CEO of Yamaha Motor Company tells this writer while jocularly clenching his fist. “We would like to expand the Yamaha brand penetration in India,” he adds.
Hidaka has just wrapped up a press conference at the recently held Tokyo Motor Show and as crowd of local journalists literally swarm around him, he is gracious enough to take a question or two from a couple of Indian journalists present.
“India is one of the most important markets for Yamaha where we can expect future growth,” says Hidaka. He admits that there is bit of a struggle right now because of the economic slowdown but remains “hopeful about the future of India”.
The electric consortium
Hidaka also makes a point to elaborate on the electric consortium that has been formed among the Big 4 — Honda, Suzuki, Yamaha and Kawasaki — with the aim of working towards common standards. “One manufacturer cannot manage everything for electric vehicles across the world,” he says.
For now, this initiative is limited to Japan where electric mobility is one of the top priorities for the following decade. India is as keen on embracing this concept aggressively though there are obvious limitations in terms of charging infrastructure and fiscal sops.
The Yamaha chief also expresses his desire to offer the best of kando to Indian customers. This Japanese term loosely means ‘sensitivity’ that could be extended to be interpreted as reaching out to people emotionally. From Yamaha’s point of view, as quoted in its latest Integrated Report 2018, it is about realising “people’s dreams with ingenuity and passion, and to always be a company people look to for the next exciting product”.
Hidaka has, in fact, reiterated the importance of kando in his message to shareholders. “Our overarching corporate mission is to be a kando creating company and we have grown by creating new value. This kando is originated by blending technology/engineering and art. Generating kando has always been our tradition, pride, and strength.”
Focus areas
Hidaka has also mentioned in this note to shareholders that the world is changing significantly at an unprecedented speed. This is where the new Yamaha credo of ART will translate into three focus areas toward 2030: Advancing Robotics, Rethinking Solutions, and Transforming Mobility. “Through these three fields of initiatives, we aim to expand human possibilities and create a better society and lifestyles,” says Hidaka.
Asked about the alliance with Honda which was forged over a couple of years ago for a specific product category, Hidaka does not quite comment on this even while speculation is rife that the two could think of other opportunities going forward.
The two companies were sworn rivals in the 1980s and the Honda-Yamaha ‘H-Y’ war became a reference point for management case studies. Today, Honda and Yamaha have decided to work together in a niche area of 50cc scooters whose presence is shrinking rapidly in Japan.
Hidaka’s predecessor, Hiroyuki Yanagi, had told this writer during a visit to India that the arrangement made perfect business sense. “The 50cc scooter market is very limited right now and exists only in Europe and Japan. Both Honda and Yamaha are struggling with this business and we thought of creating the best marriage this way,” he said.
Yanagi also made clear that too much should not be read into the famous ‘H-Y’ war. “All this happened over 30 years ago. That was during the old generation management but we represent a new generation that thinks differently,” he said.
It remains to be seen if the two companies will explore the possibility of collaborating in electric motorcycles and examine areas relating to range, charging time, performance and cost. Yanagi said electric bikes represented an important mobility initiative for the future.
“However, in the case of e-motorcycles, there are technological difficulties compared to four-wheelers. We will try and make a good alliance with Honda as each of us has some know-how in this space. If we can put that together, there will be better technology in the process,” he said.
Honda-Yamaha collaboration
It is too early to say if this will lead to the creation of an all-new electric bike from Honda and Yamaha. “We don’t know the future style yet but we do want to collaborate. In the motorcycle industry, while competition is very important, harmonisation is as critical,” said the former Yamaha President.
He also also made it clear that the collaboration with Honda should not be misinterpreted as the beginning of a stronger association in other areas.
“I don’t know yet what could happen but we will have to wait and see if there is some outcome with this harmonisation,” he said.
In its Integrated Report 2018, Yamaha has indicated that it will pursue future growth by realigning its planning, development, and manufacturing capabilities. Additionally, it will bring in strengths from outside the company, and “through management based on a system that promotes agile decision making to shift to create new value”.
The company states it is pursuing R&D in its fields of technological focus. “By integrating the growing world of personal mobility, our electric products already in the market, and our unique style R&D, we aim to offer smaller forms of mobility with a new type of uniquely Yamaha innovation,” it continues.
According to this report, Yamaha has also been playing a contributory role by selling various electric products that have less environmental impact. A representative example of this is “our introduction of the world’s first electrically power-assisted bicycle, aggregate production of which has surpassed five million units”.
The company says it will continue to address environmental issues going forward with products such as electric vehicles and electrically power-assisted bicycles, and by developing ways to relieve traffic congestion.
There is some resonance in the Indian context where Yamaha has tied up with Hero Cycles precisely for this initiative. The idea is also to build the brand and it will be interesting to see how this relationship progresses in the coming years.
For now, Yamaha will doubtless be keen on building its India two-wheeler business which has been floundering for many years and has only lately turned its focus to premium motorcycles and scooters. The company is only to aware that it is up against stiff competition from Honda as well as local players like Hero, Bajaj and TVS.
Apart from this, Royal Enfield and Suzuki are also going flat out to build their presence and in this fierce tug-of-war, Yamaha will really have to think of something special to reconnect with buyers all over again.
The company’s top management is now working on a plan which will ensure that it steers clear of the mass commuter space and stick to its competencies in the premium space.
This message comes through loud and clear from Motofumi Shitara, Yamaha Motor India group Chairman. “Every time we come out with a product, we should provide the Yamaha uniqueness to customers and that differentiation is very important,” he said in an interview earlier this year.
As he put it, Indian customers are very well informed about motorcycling, which is now a lifestyle, and are looking for models to suit their requirements.
Brand overhaul
“Motorcycle customers need a different sense of lifestyle from the routine work they do. During weekends and holidays, they need something new and unique,” said Shitara. It was of little help that only the RX 100, launched over three decades ago, continued to enjoy top recall.
“The image of Yamaha in India was still about RX 100 and customers did not have much of an idea of other contemporary models,” he said. This perception clearly had to change and Shitara decided to go in for a complete brand overhaul or, as he puts it, “integrate totally, each model one by one under one umbrella”.
Thus was born ‘The Call of the Blue’ brand campaign where Yamaha quickly set about associating itself with this colour that is also part of MotoGP. This message was extended to its employees as well as within the corporate office and factories where blue literally became the calling card across the ecosystem.
From Shitara’s point of view, brand promotion was just not the responsibility of the sales workforce but of all employees. “Everyone must provide the same answer related to Yamaha and carry the same attitude,” he reiterated. This was not the case till recently when there were divergent views coming in from people at the factory, sales or the corporate office.
“Everyone was having different views but since I took over, I have ensured that there is just one identical view related to our company,” said Shitara.
He admitted that there was stiff competition in this market and constant pressure on pricing. Despite this, he was confident that the company’s products were right on top when it came to quality and reliability. “Yamaha is different and this has been borne out by the gradual increase in sales volumes and also profitability,” said Shitara.