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.
Given its size and annual sales of over 15 million motorcycles and scooters, India represents a significant two-wheeler market for international brands. While Yamaha’s market share in India is currently only 5%, it still trails industry leaders Hero MotoCorp, Honda, TVS Motor, and Bajaj Auto. However, the company’s management is optimistic that a renewed emphasis on premium offerings will help customers rediscover Yamaha’s essence.
“Yamaha has always been the aspirational brand for youngsters,” stated Eishin Chihana, Chairman of Yamaha Motor India, in an interview with this writer in May. “In the way RX 100 established our brand image decades earlier.” We’re going to keep moving in this direction and focus on the 18–25 age range.
Although the company has been in operation for over thirty years, it was not until recently that its management realized it could not compete in the commuter motorcycle market and turned its attention to higher-end products. In India today, Yamaha’s top models are the MT and FZ series, while the Aerox 155 has become a premium option to be considered in the scooter market.
Chihana emphasized that the company’s future plans include offering electric options to the market, but they must be “unique and aspirational along with performance.” Developing a distinctive electric value and positioning that aligned with the Yamaha brand image and its intended Indian audience was the ultimate objective.
The legendary RX100, which made its debut in the 1980s and completely changed the market, is what the Japanese company is still known for. It was evident from Chihana, though, that this was easier said than done. Despite being a 2-stroke, 100 cc motorcycle, customers lined up for the RX100 because of its style, sound, and portability. The task, he said, was to figure out how to duplicate this image on a 4-stroke bike.
At least 200 cc of engine displacement is required, in addition to the proper amounts of acceleration, sound, and style. “I’m always searching for solutions. The RX100 is desired by many, but Chihana stated that a 2-stroke engine is not the solution and a 4-stroke engine is needed, but how can this be achieved without damaging the brand and image?
Situation in other developing markets in which Yamaha is present
The other major player for Yamaha in emerging markets, besides India, is Indonesia. During the conversation, management stated, “Increased production of premium segment models in India and Indonesia in the second half of the (current) year is proving effective, but the need to replenish inventory will continue into next year.”
The new retail registration system’s confusion has led to a long-standing inventory shortage in the Philippines in recent years. Additionally, the nation suffers from high inflation, which makes it challenging for two-wheeler companies to operate. Thailand and Vietnam are two markets that are unstable because of their high rates of inflation.
From Yamaha’s management perspective, however, things were going well in Brazil up until the Amazonian drought affected the supply chain network. Although it will probably take until next year for us to meet the demand for premium models, “water levels are expected to return to normal within the year,” the statement stated.
Moreover, the management noted that there were prospects in the emerging markets for more production of premium segment motorcycles and scooters. “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.”
Yamaha’s other significant market, after India, is Indonesia, and the company’s management is upbeat about the future. “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,” said management.
Yamaha acknowledged that the global semiconductor supply situation has improved, despite being severely impacted by the COVID-19 pandemic. This is good news for motor companies.