Tomotaka Ishikawa, CEO, Yamaha Motor India
Yamaha Motor India’s CEO tells P Tharyan that the road ahead for his company is going to be extremely rough.
What did you mean by your recent statement that you are not looking at the numbers game and that market share is secondary?
Our market share is around 4-5 percent. If we were to go for the numbers game, it is difficult to win. This is common sense in marketing. I would much rather go by the book and target the niche market. It is important to gain a foothold in the market and then think of a strategy for the future.
When do you hope to break even in your operations in India?
If you want my honest answer, Yamaha Motor India is in trouble as far as its financial status is considered. Fortunately, we have a big company behind us and the commitment from the top management in Japan to this market is quite considerable. Whenever we need financial support from our parent company in Japan, they will give it to us. So that is not a worry at all. Yamaha Japan is bullish about India. India and China are the two biggest markets in the world for two-wheelers. However, as China has this problem of copying designs and bikes, it is going to be very difficult for a good Japanese company to get into the Chinese market successfully. But here in India there is no such problem. There are no issues of copying and it is a pretty fair market. I do believe that this is the market for Yamaha to attack fiercely.
What then is your strategy for India?
At this point, we are not so confident of getting into the mass market for bikes and will only contemplate this when it makes sense. When we think it is the right time, we will get in more products. Yamaha Motor India needs a lot more in terms of investment and development of products. It would, otherwise, become very difficult for us to survive in India. I have been in this country for only four months and it will take some time for my plans to fructify.
What, in your view, has gone wrong with Yamaha in India?
There are two major reasons for our poor performance here. In the first place, there was not enough attention coming from Japan until recently. The parent’s focus was to re-establish the South Asian market which has been done. Secondly, the management before me possibly forgot the theory of business. I do not mean to offend my predecessors. We established our image through the RD and RX100 models. However, when the world moved over from two to four-strokes, we did not follow suit and opted for the mass market instead. We paid the price for this. I have no knowledge of the partnership Yamaha Motor India had in the past and do not wish to comment on that.
How are exports doing?
We have business with Nepal, Bangladesh, Sri Lanka, the Philippines and Colombia. However, my emphasis is on the Indian market. I would not go out with my product for the sake of exports.
How would you prioritise your retail strategy here?
Yamaha would like to be in the hinterland markets. From our research, we have realised that the aspirations and tastes of the youth are similar across the country irrespective of the region they belong to. The image is urban but there are so many youngsters in rural areas with similar tastes and aspirations. We will, therefore, be targeting this consumer category in the rural, semi-urban and urban segments of India.
What are the expansion plans underway?
Our plant can produce about eight lakh units per annum. Once this is done and demand grows, we may need another factory for our motorcycles. This will, of course, need more investment. The assembly line as well as some machining lines and welding are being done at Surajpur. Machining for certain parts is carried out at Faridabad. As of now, we have no plans on the future course of action for Faridabad and will maintain the status quo.
Do you think the 15 percent market share in 2010 is achievable?
No, I am not confident this can be done. It is mere wishful thinking on our part and very tough achieving that figure.
How would you rate competition from Indian companies like Bajaj Auto and TVS Motor?
They are great companies with a certain kind of technology. However, Yamaha has superior technology and can compete better, especially on the hardware front. In terms of hardware, our engineers are much better. It is our marketing strategy that will determine future growth.
Will Yamaha transfer critical R&D work from Japan to India?
It may not be that easy yet. We have many things to do using our own R&D facility in India. But I definitely see a lot of knowledge-based services sourced out of India by our Japanese parent company. However, this will take time and will be done in a very slow manner. But yes, definitely more R&D will be transferred to India over a period of time.
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