Monday, April 16, 2012

Yamaha’s Plans For Future

Yamaha is now well aware of the Indian market and the huge potential that is literally second to none which unfortunately still remains untapped here in this sub – continent. The Japanese giant who is reputed worldwide for its performance bikes is now all set to use India as one of its four regional procurement bases to source parts for its operations all across the globe. The other 3 bases are Japan, China and ASEAN which together aids the company in constantly having a check on the rising prices owing to various reasons in the present scenario.
Business Line had reported recently that, ‘The target is to bring these overheads down by nearly Rs 5,000 crore in 2012 as part of a larger recast exercise.’ The company just manages to perform decent enough and is not very strong in the Indian market as it is more inclines towards the youth segment. The bikes in the premium segment range which includes the YZF – R15 or the FZ series are live examples.
The company has recognized the responsibility and the potential which its suppliers need to have for their Indian operations as their components should be sound when it comes to quality and innovation but still has to be priced competitively. This is the mantra for a company to operate steadily in India and to have long term projects in hand. Business Line also reported that ‘This will allow headquarters in Japan to focus on technologies while the global operations (primarily its ASEAN integrated development centres) will play a far more proactive role in product development.’
The company is right now shifting its focus to India to attract more customers thereby increasing its customer base here. Yamaha has been doing extremely well in few markets like Vietnam, Indonesia and Thailand where it managed to sell a whooping 4.6 Mn units for the year 2011. For the year 2012, the company has set an internal target of selling 5.5 Mn units in this region which comprises of the above mentioned 3 markets. Also, out of these 5.5 Mn units, close to 40 per cent of the models will now feature FI (Fuel Injection) technology thereby moving away little by little from the convention al carburettor usage. Once all the models get converted to FI, then the company is planning to set a target of 6 Mn units for itself.
Coming to the scenario in the Indian market, Yamaha managed to wrap up 2011 with five lakh units and odd, out of which one – third was exported. The company has targeted 6.4 lakh two – wheelers for the year 2012 wherein exports will account for a total of 1.9 lakh units. When it reaches its one – million mark milestone by 2015, exports will constitute 20 per cent and will head out largely to the markets in Central/South America and Asian region.
Yamaha currently has a market share of around 20 per cent in the 150cc bike segment. As mentioned above, the R15 and the FZ series contribute the major chunk besides the SZ series playing a minor game. This makes the company to currently concentrate on this particular segment which will take the company to great heights if carefully executed and played upon. Also, equally concentrated for future business is the 125cc segment where the SS125 (which was the ‘Gladiator’ earlier) plays a decent game in India. This segment has also seen a steep rise in terms of sales as riders in the 100cc segment expect a much more powerful bike without compromising much in terms of the bike’s Fuel Efficiency as it plays a vital role in choosing the right bike.
The business newspaper also reports that ‘Over the years, Yamaha has struggled to get its India act in place despite the fact that it has been around for over 25 years now. Valuable time was lost in putting its house in order after the split with the Escorts group. Industry observers say the company also erred in its product strategy by trying to compete in the numbers game in motorcycles. It has since figured out that its DNA lies in powerful bikes which first drew India customers by the droves in the 1980s.’
Yamaha is almost all set and ready to mark its presence in the scooter segment too. It is one of the major players in most of the Asian markets but still preferred making a late entry into India. Probably, it goes by the adage ‘Better late than never.’ Companies like HMSI and Suzuki have already managed to mark a strong foothold in the scooter segment with Activa and Access125 respectively. The other players out here include TVS and HMC besides Mahindra which is working day in and day out to grasp a considerable market share.

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