Since its iconic brand RX100 came to India in the 1980s, Yamaha Motor has emerged as one of the oldest two-wheeler companies in the country over the last four decades. However, with the four-stroke engine norms kicking in, the company has been playing it safe by focussing on only those products — both in scooters and motorcycles — where it is confident of meeting targets. This has resulted in a drop in the overall share of two-wheeler market here. But, now that its target audience of 125cc two-wheelers is growing, the company aspires to achieve a marketshare of around 9 per cent by 2025 from around 4 per cent today.
In an interview with BusinessLine, Motofumi Shitara, Chairman, Yamaha Motor India Group Companies shared his plans for India. Excerpts:
How do you see the market for two-wheelers shaping up now?
Within the personal mobility space, two-wheelers prove to be the most viable option of commuting due to low maintenance, easy manoeuvrability and the convenience of riding over multiple terrains. As markets open up, we are expecting the industry to ride on a positive growth curve. Retailers are also using various digital initiatives to make the most of the upcoming festival season, which will prove crucial in meeting this year’s industry targets. We are also driving most of our product publicity and campaigns over digital mediums for an enhanced reach targetting young Indians.
Will this year be better than last year in terms of sales?
Definitely. Unlike last year when the markets were completely shut due to a pan-India lockdown, the situation was a lot better this year since the State governments have been directing lockdowns. Some markets had business continuity, allowing companies to plan and channel their economic activities in a better way. So the economic condition isn’t as badly hit as it was before. Hence, we are expecting a fast-paced market recovery and stability from the festival season onwards.
What is Yamaha’s long-term plan in India from now?
Yamaha aims to achieve an 8.7 per cent overall market share in India by 2025. To achieve this target, Yamaha’s strategy for India, under “The Call of the Blue” brand direction, is to continue to strengthen its product portfolio in the 125cc scooter, and the 150cc and 250cc motorcycle segments. To meet the requirements of the youth, emphasis will be more on the digital medium to promote our brand, especially in the metro cities and the surrounding districts. Going forward we will rev up the excitement by introducing connected mobility solutions in our models.
The launch of the feature-loaded, and technologically advanced new FZ-X and Fascino 125 Fi Hybrid is a significantly important step towards strengthening our market share in the premium segment. We also aim to set up 300 premium retail outlets called “Blue Square”, in the next two-three years, and we will also be organising on-ground activities that allow new customers to test ride and understand our product features better.
Have your planned investments in India been affected due to the pandemic? Although Yamaha has two plants in India, it has limited sales. Is it because you have limited products? Do you plan to expand your portfolio?
Yamaha has made a total investment of around ₹1,600 crore in India, since 2015. We will continue to consider new investments going forward.
Yamaha has one of the most diverse product portfolios in the industry. We will continue to strengthen and expand our product portfolio by introducing new models that are in sync with evolving market demand of our target audience.
Our scooter models like the Fascino 125 Fi, the Ray ZR 125 Fi and the Ray ZR Street Rally 125 Fi are highly popular. The motorcycle line-up targeting the deluxe and premium segment is also very diverse including the 149cc FZ Fi, FZS Fi and the newly launched FZ-X. The premium 155cc space consists of the high-performance street fighter MT-15 and the flagship supersport YZF-R15 V3.0, whereas the 249cc premium street naked offering consists of the FZ 25 and the FZS 25.
What is your total capacity right now and what is your expansion plan? What is your export strategy?
Our installed production capacity at both the plants is 1.55 million units per annum, of which we are utilising up to 60 per cent per annum. Hence, the current installed capacity is sufficient to meet future market demands and there is no expansion plan as of now.
Currently, we export between 25 to 30 per cent of our total production to countries in Latin America, Africa, and South Asia. The demand for our products here’s growing year by year. Yamaha’s top export countries are Nepal, Colombia, Bangladesh, the Philippines and Mexico, and we will continue to keep our focus on these markets in the near future as well.
How much does Indian R&D contribute to your global portfolio?
Globally, we have five R&D Centres–one each in Taiwan, Thailand, Italy, China, and India. All the R&D centres have their own strengths but share the tools of technology. The role of R&D centre in India is to achieve cost development targets and develop affordable models that match global quality and standards.
We also aim to expand our export business for both completely built unit (CBU) and components. In fact, we have already started sharing parts, components and CBU with foreign Yamaha sites. Though not so large at present, in the future Indian R&D will be one of the key contributors for Yamaha’s global business.
What about plans for launching a product in the commuter segment (100-110cc)? Do you think your premium segment would bring enough market share that you aim to achieve?
Motorcycling is now becoming a part of the lifestyle for most millennials. Customers today want a two-wheeler with advanced features and technology and don’t mind spending more if the value for money quotient is justified. As of 2021, Yamaha holds a 3.7 per cent market share in the Indian two-wheeler market. However, if you look at the premium segment motorcycles, which is our key focus area, the company enjoys a 19 per cent market share (149cc -155cc). In India, 51.6 per cent of the total two-wheeler purchases comprise commuter segment models up to 125cc segment, and we feel that this section of buyers will aspire to own a premium product that’s exciting, stylish and sporty, eventually making a shift to the 150cc class. Hence, we will continue to build a strong presence in the premium 125cc scooter, and the 150cc and 250cc motorcycling space, which is also our target market.
What would be your Scooter strategy in the Indian market?
The 125cc scooter market is estimated to grow at 10 per cent between 2020 and 2025. This segment consists of passionate riders who are young and dynamic, and love to experiment. This is a vibrant representation of Yamaha’s target audience and the company has much to offer through its existing line-up. The elements that bind our scooter portfolio together are their unique features like hybrid technology, in-built side stand engine cut-off switch, stop and start system and smart motor generator. In the current scenario, we will continue to strengthen our market in the 125cc segment scooter range. Simultaneously, we will also be taking feedback from our customers and closely monitoring competition in order to identify the scope for new segments.
The Indian motorcycle market is getting competitive in 250cc to 500cc segments. What are your plan for the category?
The Indian superbike market is still at a nascent stage. However, increased purchasing power, improved lifestyles, and aspirational levels of today’s generation towards owning luxury brands indicate immense growth possibilities. The shift in lifestyle along with growing competition will undoubtedly make India a flourishing market for big bikes. That said, our focus is on strengthening the 125cc scooter portfolio, along with expanding our premium 150cc and 250cc motorcycle range. Nonetheless, we have been analysing the big bike market and trends related to it very closely and may introduce a wider range of superbikes when the market is mature enough.