Yamaha prepares India R&D for big global play

The initiative was Japanese but the name distinctly Indian. When Yamaha Motor kicked off ‘Project Indra’ some years ago, it was largely assumed that this was part of its endeavour to produce the world’s most affordable motorcycle in India.

As an acronym, Indra actually stood for Innovative and New Development based on Responsible Analysis, which in a sense has nothing to do with affordability and the inherent risk of the ‘cheap’ label. This is precisely what the Yamaha leadership team has reiterated on more than one occasion when they drove home the point that the objective was to make good products for customers where, beyond price, the focus areas would be styling, performance and safety.

Today, this message has been borne out by the first product from the Indra drive, the Saluto RX, which was launched a year ago. The 110cc motorcycle was priced at over ₹45,000 and not synonymous with a ‘cheap’ price tag.

“If we focus only on cheap, we can achieve it but this is not our direction,” says Yasuo Ishihara, MD, Yamaha Motor Research & Development, India. “For Saluto RX, the price was not cheap but it was the final solution for customers with the inputs coming from Indra in terms of specs and costs. Every motorcycle in India from Yamaha will go through the Indra concept.”

He also makes it amply clear that Indra is a concept that began with Saluto RX and the idea is to work on precise specifications. “All our products will gradually come into Indra and there have been many actions already on our product range here,” he says.

Clearly, the idea is to ramp up R&D skills in India, which makes sense given that it is already the third largest two-wheeler producer on the Yamaha roadmap and could well become Numero Uno by 2020. Indonesia is currently ahead with volumes at over 1.7 million units but India will soon overtake Vietnam this year when it breaches the one million mark and can only grow stronger from that level.

In this backdrop, it is as important to increase the R&D headcount here, which is now at 80 plus but still below a region like Taiwan which has over 250 people. “We want to grow our R&D in India and certainly go beyond 200 in due course of time. Training takes time though we are rushing ahead,” says Ishihara.

From his point of view, India offers tremendous strengths in the cerebral quotient. “In our engineering workforce, we have very high potential but our operations are small and do not give so much of an opportunity. We will, however, grow rapidly and expand,” he adds.

The significant part is that India’s role will grow beyond its geographies and encompass Africa aggressively in the near future. The country offers tremendous potential for commuter bikes and it is here that Indra will also play a big role in conceptualising models that are appropriate for the African terrain. “We want to develop Africa but basically the model is originally Indian though some modifications are required. This is where our R&D will have a big role in expanding the African business from India,” says Ishihara.

Beyond products, the subcontinent will have the added responsibility of supplying parts to Yamaha’s operations across the world. This will translate into big business opportunities for ancillary suppliers here where revenues could be to the tune of over ₹400 crore by the end of this year.

These vendors have been trained by Yamaha teams, both from Japan and India, to focus on consistency in quality and competitive prices. From the company’s point of view, they are partners who work in tandem to find the best solution. It is in this context that the Chennai plant with a vendor park will play a big role in reducing costs substantially.

“Until now, our headquarters in Japan developed almost everything but we are now taking a new path in manufacturing for markets like India,” says Ishihara. “We want to see our global business grow from here and are already supporting many countries with supplies of models and components.”

At a global level, Yamaha is quite upbeat about the road ahead for 2017. President & CEO, Hiroyuki Yanagi who was recently in India, told Business Line that all markets were in pretty good shape through 2016, which gave him enough optimism about this year too. “ASEAN was good except for Indonesia but Taiwan and the Philippines were OK. India was very nice too though South America is still weak because Brazil is not in the best shape. Europe, the US and Japan were fine too,” he said.

While the African economy was “struggling”, Yanagi did not expect this to be a “permanent problem”. “In the near future, things will look up. For our African business, Indian products are important and we will work out a plan once things look up in terms of opportunities,” he added.

The Yamaha chief also conceded that there were new geopolitical realities to deal with in the new world order. With a wave of populism spreading across the West, automakers are uncertain about the new set of challenges that are gradually emerging.

“There is a new political sentiment but economics will prevail even though there will be some impact,” said Yanagi. “I don’t think the economic situation is so bad today and I am not so pessimistic. We will have to continue with our mid-term strategy and keep going.”

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