Yamaha Will Bet Big On Premium Category Bikes In India

In an interview with this writer in May, Eishin Chihana, the Chairman of Yamaha Motor India had said, “In the way RX 100 established our brand image decades earlier, Yamaha has always been the aspirational brand for youngsters."

Yamaha Motor has reaffirmed the importance of India in its two-wheeler business, the top management told analysts at a question and answer session in Japan this month. The discussion with company analysts was held following Yamaha's third quarter (July-September) results for the calendar year.

India is an important two-wheeler market for global brands due to its sheer market size where more than 15 million motorcycles and scooters are sold each year. Even though Yamaha has just 5 percent market share in India currently and lags behind the biggies like Hero MotoCorp, Honda, TVS Motor and Bajaj Auto, its management is confident that renewed focus on premium offerings will reconnect customers to its core Yamaha DNA.

In an interview with this writer in May, Eishin Chihana, the Chairman of Yamaha Motor India had said, “In the way RX 100 established our brand image decades earlier, Yamaha has always been the aspirational brand for youngsters. We will continue in this direction and will target the 18-25 age group.”

The company has been around for more than three decades but has shifted its focus to premium offerings only in recent times when its management realised that there was no way it could cope with competition in commuter motorcycles. Today, the MT and FZ series are the frontrunners for Yamaha in India while the Aerox 155 has emerged a high-end offering to reckon with in the scooters segment.

Going forward, the company plans to bring in electric options for the market though Chihana reiterated that this would have to be “unique and aspirational along with performance”. The ultimate goal was to create a unique value and positioning in electric while being in sync with the Yamaha brand image and its target audience in India.

The Japanese brand is still remembered for the iconic RX100 which took the market by storm way back in the 1980s when it made its debut. Chihana, however, made clear that it was easier said than done. Customers queued up for the RX100  because of its lightweight, styling and sound but this was a 2-stroke 100 cc motorcycle.  “How to replicate this image with a 4-stroke bike is the challenge,” he said.

The engine capacity will have to be at least 200 cc along with the right levels of acceleration, sound and styling. “I am constantly looking for answers. People do want the RX100 but 2-stroke is not the answer and in 4-stroke, the question is how can it happen without ruining the brand and image,” said Chihana.

Scenario in other emerging markets where Yamaha Operates
Beyond India, Indonesia is the other big player for Yamaha in emerging markets. “In India and Indonesia, increased production of premium segment models in the second half of the (current) year is proving effective, but the need to replenish inventory will continue into next year,” the management said during the discussion.

The Philippines has long witnessed inventory shortages in recent years due to the confusion of the new retail registration system. Also, the country is a victim of high inflation, making it difficult for two-wheeler companies to do business. Among others, Thailand and Vietnam are shaky markets due to high inflation.

But in the view of the Yamaha management, Brazil was doing well until the supply chain network was affected due to the drought situation in the Amazon. “Water levels are expected to return to normal within the year, but it will likely take until next year for us to meet the need for premium models,” it said.

The management further observed that there were opportunities for increased production of premium segment motorcycles and scooters in the emerging markets. "Strong net sales have been forecast for India, Indonesia, and Brazil along with lower logistics costs, a lull in soaring material costs and, finally, a weaker yen."

Apart from India, Indonesia has been Yamaha’s other big market and the management is optimistic of the road ahead. "There are plans to increase production of the NMAX and XMAX models, our main offerings in this space, as part of the strategy for Indonesia," the management said.

The improving scenario in the global supply of semiconductors that was hugely affected due to COVID, has brought good news for motor companies, Yamaha acknowledged.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house

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