Yamaha Plans Largest Mobike Unit

Yamaha president Takehiko Hasegawa and Escorts vice-chairman Anil Nanda told reporters here yesterday that the venture, which is now a collaboration with the sights focused on India, would grow to seek global markets.

"We have reached an agreement to establish the biggest motorcycle factory in the world sometime in the early part of the 21st century," Hasegawa said.

The two collaborators signed seven agreements for an expansion plan at an investment of about Rs 525 crore, introduction of new vehicles and the setting up of a new scooter plant in Gurgaon under a joint venture company called Escorts Yamaha Motor Ltd.

 

Hasegawa said this was the first time that the Japanese major had signed a joint brand agreement under which the products would carry the hybrid Escorts-Yamaha name in the domestic market. However, exports will be under the Yamaha brandname.

At a press conference convened after the board meeting of the company, Anil Nanda announced the transfer of Escort's existing 30-year-old motorcycle manufacturing plant at Faridabad -- which currently manufactures Rajdoot motorcycles and Toro Jazz mopeds -- to the joint venture company in which the two collaborators hold equity stakes of 50 per cent each.

After the transfer, the equity capital of Escorts Yamaha Motor Ltd will go up to Rs 27 crore through a rights issue. A public issue slated for mid-1997 will boost the equity capital to Rs 50 crore, after which Escorts and Yamaha will hold 26 per cent each in the joint venture.

The company has already applied to the government for permission to float a $15 million ECB issue to finance the expansion of its Surajpur plant. It has now decided to submit a fresh application for another $15 million to fund the upgradation of the Faridabad unit.

Escorts Yamaha Motor has decided to introduce four new vehicles in the market, including a four-stroke motorcycle by 1998 and a four-stroke scooter for the first time in the country by 1999.

The four new products are the Yamaha RXZ motorcycle, a performance four-stroke motorcycle, a four-stroke scooter and a utility four-stroke motorcycle.

The first product slated for launch is the 125 cc Yamaha RXZ by the first quarter of 1997. This will be followed by the performance four-stroke motorcycle in 1998 and the other two in 1999.

The seven agreements signed yesterday related to the formation of the joint venture company, business transfer agreement, approval of expansion plans, export agreement, trademark agreement and the technology transfer for the bikes and scooters.