Friday, April 19, 2013

Yamaha: Can it fire on all cylinders?

The Japanese bike maker plans to take its sales in India to a million bikes in another two years, but its ambition could come a cropper if it fails to rack up volumes in the base segment.

Ask Hiroyuki Suzuki, MD & CEO, India Yamaha Motor, about his plans of relaunching the once iconic RX100 brand in India and you find his face crease into an impish smile. In case you haven’t caught on and are still waiting for more pronounced cues, he goes on to gently shake his head. For legions of bike lovers, during the 1980s and the ’90s, the RX100 was the hottest bike in town, and the brand continues to evoke a warm nostalgic memory even 15 years after it went off the shelf.

However, a lot of water has flown under the bridge since Yamaha took the RX100 off its production lines. Subsequent models like RXG, RX-135 and RXZ failed to live up to the promise generated by the superb RX100. While these brands failed to make a splash, competitors like Hero Honda and Bajaj Auto kept relentlessly jockeying up their market share. Around 2006, things had turned downright bleak for the Japanese bike maker and it was losing money by the barrel. As per various market reports around this time, Yamaha incurred losses to the tune of Rs.10 billion in the last six years and it was seriously considering pulling out of India altogether. But thanks to its heady success earlier, Yamaha’s Japanese headquarters decided to give the second-fastest growing market in Asia a second shot.

In 2007, soon after launching superbikes like R1 & MT01 in the Indian market, Yamaha turned to what it is best known for – making motorcycles that are technologically ahead of their times in terms of styling, performance and features. Products like R15 and FZ series were launched in the Indian market. Their initial success spurred Yamaha to continue with its game plan of introducing models that successfully attract the Gen-Y biker. As a result, in subsequent years, Yamaha launched products such as Fazer, FZ-S, SZ-R and others. Today, the company sells 14 models in the Indian market and claim that it has over 15% market share in the premium motorcycle segment. The overall market share of Yamaha in India is just around 3% even today, but considering the intensified competition in the Indian two-wheeler segment, the comeback plan has worked well for the company so far.

Continuing with its quest to pump up sales, Yamaha posted a growth of 32% in domestic sales during August 2011 as compared to its sales in August last year. The company registered sales of 29,934 units in August 2011 as against 22,683 units in the same month last year in the domestic market. The overall sales recorded were 39,490 units in August 2011 compared to 30,461 units in August 2010, a growth of 30%. But Yamaha is hungry for more and is making redoubled efforts to push its sales further. MD Suzuki claims that Yamaha will be able to tot up sales of 530,000 units in 2011 out of which around 360,000 units will be sold in the domestic market while it is looking to export over 170,000 units. Next year, the company’s target is to sell over 650,000 units and scale it up to a million by the end of 2013.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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