MUMBAI: Even as Bajaj Auto tries to get its act together in the motorcycles segment that matters most, Japanese rival Yamaha is betting on a category that the Pune-based bike maker has abandoned production of: scooters. Better known for its stylish and power-packed bikes, India Yamaha Motor is looking to break even operations in a year or two and become a volumes player by riding on scooters.
"With the entry into scooters, which are high-margin products, we should be able to break even our operation in 2012 or 2013," says Jun Nakata, director sales & marketing, India Yamaha. The domestic subsidiary had a loss of Rs 241.66 crore in 2011, which was almost 60% lower than the Rs 632.61 crore loss of 2010.
The target for 2016 is to sell 2 million vehicles (scooters and bikes) - from 460,815 in 2011 -- and attain a 10% market share. India Yamaha plans to get there by consolidating its position in the deluxe and premium 150 cc segment; roll out three to four scooters across categories that appeal to young women, families and elderly people and thereby build volumes; explore the emerging 250 cc segment with either the R series or FZ series of bikes; and finally bring in mass market products by 2016 developed out of India.
On Monday India Yamaha announced it has signed Bollywood actress Deepika Padukone as brand ambassador for a yet-to-be-launched scooter called 'Ray'. The senior officials of the company said Ray will target women in the 16 to 24 year age group.
Hiroyuki Suzuki, CEO & MD, India Yamaha Motor told ET: "We had the option of introducing either a mass-market motorcycle or a scooter; we chose the latter because the scooter segment is growing at over 20% annually." Suzuki added that India Yamaha is adopting a top-down strategy, and the company will roll out more scooters in a market that is expected to hit 3 million units by end-2012. The CEO is aiming to sell at least 300,000 scooters in the first two to three years.
Like Yamaha, Hero MotoCorp, Honda Motorcycles and Mahindra Scooters have big plans for this till recently moribund segment. In 2011, scooters accounted for a fifth of all two-wheelers sold in the country. Yamaha expects this segment to contribute to over 30% of sales by 2016 and over 40% by 2020.
Yamaha's volumes grew by 32% growth in 2011 and it expects to clock a 25% increase in sales in the current year. To keep pace with this current growth in demand, plans have been implemented to boost the existing factory's annual production capacity of 600,000 units to 1 million units by investing roughly 750 crore in 2012. With a third factory in Chennai expected to come up by 2014 - in addition to one in Surajpur in Uttar Pradesh and Faridabad in Haryana - India Yamaha Motor will have a combined two-wheeler production capacity of 2.8 million units by 2018.
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