Yamaha bets big on scooters to drive India sales

Yamaha's plant at Noida has a capacity to produce 1 million two-wheelers annually

Japanese two-wheeler major Yamaha has set a target to sell 500,000 units this year as against 350,000 units in 2012, with half the sales expected to come from scooters.

"India is an exciting market, for the next 20 year it will continue to progress," says Asano Masaki, managing director, Yamaha Motor India Sales, a new company which was formed recently for marketing and sales of the company's two-wheelers.

To achieve the target, Yamaha will have to compete with established Indian brands such as Hero, Bajaj and TVS, as well as with Japanese companies, says Masaki.

He says the company is closely observing and studying the potential of India which is an important market for Yamaha. "Not only short-term strategy is required for India, it also needs both medium-and long-term strategies", says Masaki.

One of the major challenges for the company is how to communicate with the society and the customer. In India, Yamaha has adopted a three-pronged marketing strategy which includes reaching the customers directly through advertisements, through deals and by way of CSR (social initiatives), he says.

"At present our market share is only 3 per cent; we need to work on addressing this challenge to increase this percentage," he adds.

Yamaha also hopes to export around 210,000 units in 2013 as against 140,000 units in 2012. In the future, Yamaha's focus will be on developing scooters in the 110-150cc segment, which account for a majority of the sales. "At this point we are not focusing on high-end bikes; rather we would create new segments. We also see exports an area which we cannot afford to miss, " Masaki says.

The company has around 400 dealers and 250 bike stations and it plans to double the total touch points (both dealers and bike stations included) to 1,200.

Yamaha says its new plant that is being built near Chennai will begin production from mid-2014. The plant will have the capacity to manufacture both bikes and scooters with an annual production capacity of around 1.8 million units. It may be noted, at present the company has a manufacturing facility at Noida with a capacity of 1 million units units.