2013 Two-Wheeler Special: Yamaha’s R&D centre to kick off ops in April

Production at the Chennai plant will, however, kick off in the first half of 2014 with scooters slated to roll off the production line first.

Autocar Pro News DeskBy Autocar Pro News Desk calendar 01 Feb 2013 Views icon3362 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
2013 Two-Wheeler Special: Yamaha’s R&D centre to kick off ops in April
India Yamaha Motor (IYM) is all set to intensify the competition in the local market with indigenously designed and developed two-wheeler products after its new R&D centre at its upcoming facility near Chennai goes on stream.

This initiative follows close on the heels of Honda Motorcycle & Scooter India (HMSI) which recently opened its own India tech centre at Manesar to localise its products. HMSI also re-launched its entire scooter range on a new platform. The recent announcement by Yamaha's global head on the commencement of a local R&D centre around April 2013 and export of low-cost scooters to the emerging markets from India seems to have come just in the nick of time. The centre will develop products ‘In India, for India and by an Indian R&D team’, says Roy Kurian, National Business Head, IYM. This will enable Yamaha to target 100 percent localisation which, in turn, will help it price its products more competitively.

At present, production takes place at IYM's Surajpur plant in Noida and Faridabad facility in Haryana while basic concept design and product development are still carried out at Yamaha Japan. IYM also imports select components from Japan. The localisation content varies from product to product with the Ray scooter (targeted at women buyers) having an indigenisation level of around 90 percent. Others have much lower local content, says Kurian.

Going local

All this could now change. The centre will initially cater to the needs of the domestic market and maybe later look at meeting global requirements. In six months, manpower is also expected to move into the new manufacturing unit coming up in Tamil Nadu. The facility will house around 1,000 staffers with hiring to commence this year.

Production at the Chennai plant will, however, kick off in the first half of 2014 with scooters slated to roll off the production line first. The Ray is a likely contender to start production with many other scooter models to be added this year to the portfolio including a model for men. “The Ray is targeted at women and now we will expand and launch scooters for other segments as well,” confirms Kurian.

He says that while other players are also strengthening their presence in the scooter market that is a growing segment, he expects scooters and the commuter segment to contribute handsomely to IYM's sales figures in 2013. The Ray, launched last September, is a hit with women buyers and is expected to continue to be a major revenue churner in 2013 as well. In 2012 it accounted for sales of over 35,000 units.

Meanwhile, the Chennai unit is to be developed as a major export hub with the export target rising to 200,000 units in CY2013 from 150,000 units in in CY2012. At present, IYM exports to nine destinations including Columbia, Philippines and other South American countries. It is now exploring options to tap developed markets too.

In 2012, IYM notched sales of 348,346 units compared to over 25 lakh units for Bajaj Auto and HMSI and Hero MotoCorp's 59.54 lakh units. While HMSI grew over 40 percent in 2012, IYM’s growth was just 1.42 percent over 2011's 343,470 units. It is however optimistic of closing 2013 at 500,000 units in the domestic market with scooters pitching in with close to 200,000 units.

Overall, IYM is targeting a 10 percent market share by 2016, up from the current 3.5 to 4 percent. It claims the Ray accounts for a market share of 15 percent in its segment. South India, with 40 percent, contributes the chunk of total sales for IYM, with the west pitching in with 25-30 percent.

A good dealer network, higher awareness level and understanding of technology issues among the target audience have been one of the main growth drivers for sales.

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