CKD kits of both motorcycles are being readied at the company’s Chennai plant.
28 Jul 2016 | 9110 Views | By Shobha Mathur
Two-wheeler manufacturer India Yamaha Motor (IYM) is steadily expanding its export basket year on year. This year will witness the addition of a new market – West Africa. Yamaha, which has already established its presence in Nigeria, Kenya and parts of East Africa and central Africa, now plans to grow its footprint further in the African market.
It can be revealed that currently CKD kits of Yamaha’s newest models in India – the 125cc Saluto and 110cc Saluto RX commuter motorcycles – are getting readied for shipment from its Chennai manufacturing plant. This is the first time that the Saluto bikes will be shipped out of the country.
Africa offers a growing potential for selling lower displacement two-wheelers. The company already exports the 106cc Crux motorcycle to Africa from Yamaha’s Surajpur plant; this model has been discontinued in the domestic market.
“We are now building the CKD kits in Chennai. The strategy is to use the feasibility of ports within close proximity to initially export scooters from the Chennai plant. Scooter exports began last year to Sri Lanka and Mexico. We will keep adding motorcycles to our export product range,” Takashi Terabayashi, managing director of IYM, told Autocar Professional.
The two-wheeler market in Africa has limited potential and demand there is mostly for the commuter segment as the industry is not so well established and the parts manufacturing business environment is also somewhat unstable.
In FY2015-16, India Yamaha Motor exported a total of 154,485 two-wheelers, down 9.79% over the previous fiscal year. In Q1, FY2016-17, the company has shipped 37,995 units, up 1.74% year on year.
Saluto sales on the upswing
In the first full year of sales of the Saluto, Yamaha has sold 60,000 units which it claims is as per its target. In the last two months, the recently launched Saluto RX 110cc has sold 13,000 units averaging sales of 7,000-8,000 bikes a month.
“We hope to continue with these numbers as with the monsoon improving, we are bullish of increasing sales in rural India. During the past two years, the monsoons were not too good and the rural markets experienced slow growth. Now at the macro level, the situation is improving and we plan to capitalise on it with both these models,” adds Sanjiv Paul, VP (Manufacturing), IYM.
Compared to ASEAN countries, penetration of two-wheelers in rural regions is still low in India; they account for 100 two-wheelers per 1,000 population compared to 300-400 two-wheelers per thousand in the ASEAN.
In line with this growth strategy, IYM plans to expand its reach in rural areas in Rajasthan, Madhya Pradesh, Maharashtra, Tamil Nadu and Andhra Pradesh with various sales promotion campaigns including teaching safe riding skills.
With an expanded reach in rural areas, the company is optimistic of garnering a larger chunk of Saluto sales. In CY2016, IYM is targeting a million two-wheeler sales with 218,000 contributed by exports and 800,000 from the domestic market. At present, the scooter and motorcycle portfolios contributes an equal proportion to the product sales basket.
In the last few years, Yamaha claims it has launched products in different categories of the market starting with the rollout of the 150cc motorcycle and from 2012 onwards in the scooter segment with a new scooter rolling out each year.
The manufacturer has also launched products in the commuter segment as well as strengthened its 125cc portfolio while entering the 110cc motorcycle market this year. “We believe we have a good portfolio of products and are studying other market segments as well. In future, depending on the study, we will definitely launch some new products,” says Terabayashi.
Strengthening the commuter segment is an important focus as it delivers the numbers. Therefore, the two-wheeler maker is stepping up its customer touch-points in Tier 1 and 2 cities, as the bulk of the market for the commuter segment is present here. This year, the network will be expanded sizeably from 2,300 to 3,000 touch-points, enabling greater sales penetration.
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