Sunday, April 7, 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 the Indian market 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. Known for its excellent pick-up and technological sturdiness, the brand not only was a bread-and-butter model for both Escorts and Yamaha (the then JV partners), but was also a wildly popular and successful showcase of Yamaha’s engineering virtuosity. However, changing technology and more stringent government pollution norms forced Yamaha to phase out its popular models like RX100 and RD350 in the ’90s.

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 best known for – making motorcycles that are technologically ahead of their times in terms of styling, performance and features. As a result, 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 the company takes a lot of pride in claiming 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.

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