Our focus, as of now, is the 150-cc segment: Hiroyuki Suzuki
While the two-wheeler market shows moderation in growth, Japan’s Yamaha Motor Company has announced an investment of Rs 1,500 crore to set up a new factory and nearly treble production capacity in the Indian market. Known here for its premium motorcycles, Hiroyuki Suzuki, managing director and chief executive officer of India Yamaha Motor Pvt Ltd, tells Sharmistha Mukherjee the company is stepping up efforts to indigenously develop a low-cost motorcycle to build volumes. And, to corner a 10 per cent share (it is now 2.6 per cent) of the world’s largest two-wheeler market by 2016. Edited excerpts:
At a time when the two-wheeler market in the country has been showing signs of moderation in growth, Yamaha has announced an investment of Rs 1,500 crore to expand capacity. Where will the numbers come from?
We have production capacity of 100,000 units at our existing plant. The new plant coming up in Tamil Nadu will add another 1.8 million units over the next five years. We are targeting sales of around two million units by 2016, of which 30 per cent would come from scooters. The 150-cc models will account for 40 per cent of overall volumes, while entry-level products such as the YBR110 and Crux will bring in the remaining numbers. We want a 10 per cent share of the two-wheeler market here by 2016.
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In a market where over seven million motorcycles are sold in the commuter segment annually, Yamaha, with monthly sales of 5,000-odd units at the entry-level, has marginal presence in the category. Are you working on strengthening your portfolio there?
Our focus, as of now, is the 150-cc segment. Next on line is a gearless scooter for female customers that is scheduled for launch around the festive season this year. At present, we have no capacity for a mass market product. All additional capacity is under investment, both at the existing plant and in the new plant. From the new plant, I would like to develop a low-cost commuter motorcycle. This product would be sold not only in the domestic market but also be exported from Chennai to countries in Africa.
Honda has developed a bike priced below Rs 30,000 for the African market. Would Yamaha look at doing something similar in India?
The Crux, priced around Rs 38,000, is the cheapest in our portfolio. There would be a vendor park near our new facility in Chennai which will help us improve localisation and reduce production costs of Yamaha products. The target is to make a bike that will cost $500 (Rs 27,500). Such a bike will have a lot of demand in Africa, as well as in India.
How big a role would the Indian R&D team play in developing such a product?
Until this year, basic development of products was being done by Yamaha at our headquarters in Japan. We have an R&D centre to make minor changes on models in India. The R&D team here has 70 engineers. In future, our R&D team should be independent for developing the new motorcycle in the commuter segment. The investment for scaling up R&D work in India is under consideration. We already have a test-track near Chennai.
How much of your total production would you earmark for sales abroad when the new plant comes onstream?
The Chennai plant is the biggest in Asia. It is close to the port. A fifth of our total production would be exported from India by 2018. We already export bikes from the R15, FZ and SZ zeries to over 40 countries in Latin America, Africa and Southeast Asia. The new scooter, too, will be exported from this year. The plan is to export premium products to countries in South America and the Asean region, while entry-level products would be shipped to Africa.