Yamaha Motor opens new two-wheeler plant in Tamil Nadu, its third in India

India Yamaha Motor (IYM) today inaugurated its third manufacturing facility at the industrial park in Vallam Vadagal situated at the outskirts of Chennai, Tamil Nadu.

The plant was inaugurated this morning during the opening ceremony of the first Tamil Nadu Global Investors Meet 2015 by chief minister J Jayalalithaa in the presence of Hiroaki Fujita, chairman, India Yamaha Motor. The new factory will be the first in the Yamaha Motor group to have a vendor park in its vicinity. Spread across 177 acres, the new facility covers an area of 109 acres for IYM and 68 acres for vendor partners.

The vendor park has 9 vendors who plan to invest Rs 1,000 crores and will employ around 3,000 people by 2018. The facility will bring together the production operations of main external parts suppliers, thus enabling complete synchronization of external supplier parts production as well. This system will reduce losses in the areas of production management and distribution to extremely low levels in the overall engineering and manufacturing process, and make the new production base a highly-efficient and profitable plant.  

Speaking after the inauguration, Hiroaki Fujita, chairman, India Yamaha Motor, said: “We are pleased with the timely completion of the Chennai factory construction and start of operations in line with our mid-term plan. We also thank all the concerned Tamil Nadu government departments for their support in completion of the project on time. We plan to invest a total of Rs 1,500 crore in phases till 2018 when the new plant is expected to have a capacity of 1.8 million units.”

Yamaha signed a Memorandum of Understanding with the government of Tamil Nadu in May 2012 to construct and operate the two-wheeler factory in the state. The new facility will join the currently operating factories of IYM at Surajpur (Uttar Pradesh) and Faridabad (Haryana) to meet the rising demand for two-wheelers in India. With the new Chennai factory and the company’s plants in Surajpur and Faridabad, IYM will have a combined two-wheelers production capacity of 2.5 million units by 2018.

“The company has sold 740,000 units in 2014 and we are eyeing double-digit sales growth in 2015. The company is also targeting a significant increase in the domestic market share in the coming three years. Considering the high growth in the scooter segment at 25-30% over the last few years, the company is also looking at increasing its presence in this segment in which it currently has more than 5% market share. South (India) has been a very important market for us. The region contributes around 30% to the total two-wheeler demand while it contributes approximately 50% to total IYM sales. Chennai is also a strategic market for us due to its proximity to the sea port,”, Fujita added.

To start with, Yamaha will produce the new 125cc Saluto motorcycle and scooters including new Fascino, Alpha, Ray and Ray Z at the new plant, which will have an initial annual capacity of 450,000 units. The plant employs more than 2,000 people currently and will have 3,900 employees by 2018, out of which about 40% will be women workers.

More from Tamil Nadu:

- Ford India confirms fresh investment in state

- Mahindra signs MoU to invest Rs 2,000 crore in Tamil Nadu

- TVS Motor signs MoU with state govt for new investment of Rs 350 crore