Wednesday 25 July 2012

Yamaha goes for bottom of the pyramid



Yamaha India, a subsidiary of Yamaha Motor Cop of Japan, on Monday became the latest to join the race for market share in the volume segment, or the commuter segment, announcing it will roll out gearless scooters and commuter bikes starting this year.
The company will launch a range of scooters, starting with ‘Ray’, which will hit the market later this calendar, said Hiroyuki Suzuki, CEO and managing director for India Yamaha Motor Pvt Ltd.
“The scooter market has grown over 20% last year and by 2013, it is expected to grow over 30%. Globally, scooter segment is strong for YMC. We want to get deeper into the low-cost segments and scooters will help us in understanding the same,” he said.
Commuter bikes, or bikes in the 100cc category, will follow by 2016, said Suzuki. According to him, the new products could even replace existing ones such as YBR 110 and Crux, which have failed to rake in the numbers.
To be sure, the commuter segment constitutes about half of overall motorcycle sales in the country. Sales are booming as inflation pushes commuters towards fuel-efficient and affordable bikes.
Yamaha’s entry heats up competition for the current leaders in this segment --- Hero MotoCorp and Bajaj Auto.
As such, Honda Motorcycles and Scooters India and Suzuki Motorcycle India have recently entered the segment with their Dream Yuga and Hayate offerings, respectively, while Mahindra 2 Wheelers is set to ride in on a refurbished Stallio, which it had pulled out a year-and-a-half ago.
Going that extra mile, Yamaha is also setting up a research and development centre in India that will work on development of future low-cost products for the country.
Ray, incidentally, has been developed by parent Yamaha Motor only for the Indian market.
The company is also ramping up capacity at its Surajpur (Uttar Pradesh) and Faridabad (Haryana) plants, to take the total to 10 lakh units a year from 6 lakh units now.
It is also investing Rs1,500 crore on its new facility in Tamil Nadu, which will have a capacity of 18 lakh units by 2018.
But of course, it won’t be an all-commuter fare for Yamaha.
To maintain its hold on the sportier bike segment, the company is also studying a possibility of a bike above 250cc category, though no timeframe has yet been given for the launch.
Yamaha currently has a market share of 15-16% in the 150cc and above category of bikes.
Incidentally, the company is also looking to export its products from the Chennai facility, due mainly to its proximity to ports.
“Chennai is a lucrative location for low-cost operations. By 2018, our target is to export 30% of our overall sales. Currently, we are exporting R1 to advanced nations like America and Crux is exported to Africa,” said Suzuki.
According to him, the company expects to sell more than 4 lakh units this year, though for the Indian operations to break even, it will have to sell 5-6 lakh units a year.

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