Business news : Yamaha Establishes a New Motorcycle R&D Company in India

According Business Standard Japanese two-wheeler giant Yamaha said it is working on to roll out a motorcycle priced at around $500 from India with the setting up of its fifth global research and development centre.

Claiming that the bike will be "the world's cheapest motorcycle", the company said India will become the global hub for development of low-cost bikes, which will be exported to other countries in Africa and Latin America.

The company's new entity Yamaha Motor Research and Development India Pvt Ltd (YMRI), which was established at Surajpur in Uttar Pradesh in February this year, has already started its work to develop the product that will be first launched in India.

In order to enhance its position in the Indian market, the company will launch a new scooter model each year till 2016, apart from setting up its second R&D centre by 2015 at its upcoming Chennai facility.

"Our objective is to develop the lowest cost model in the world and lowest cost parts. Our target is to develop the cheapest bike at around $500 for both India and export markets," YMRI Managing Director Toshikazu Kobayashi told reporters here.

Without sharing any timeframe of launch, he said the company is developing the bike with an engine capacity of 100 cc or more as "smaller bikes with smaller engine do not have good balance".

"We will first launch the bike in India. There are also other markets like Africa and Latin America where such bike can be sold. We will export the product to such locations in future," Kobayashi said.

As per the plan, the first step will be to develop the world's cheapest bike, followed by an India-specific model. This will be followed by a global model in future, he added.

Yamaha's move is part of strategy to expand presence in the commuter segment, specially in the Indian market.

"We have been focussing on sporty, stylish and performance bikes in India so far. Now we are looking to increase our presence in the commuter segment. Developing the product in India will give us a substantial cost advantage and enable us to price it competitively," India Yamaha Motor (IYM) Chief Executive Officer and MD Hiroyuki Suzuki said.

He said the company is looking to sell 7.1 lakh units of motorcycles and scooters this year, including 2.1 lakh of exports. IYM had sold a total of 4.9 lakh in 2012.

"Our long-term target is to sell a total of 28 lakh units by 2018. We are aiming to sell 10 lakh units in 2015 that will include exports," he added.

Suzuki said the Indian two-wheeler market is expected to touch 25 million units by 2020. In the mid term, the company is eyeing a market share of 10 per cent by 2016, when the market is pegged to be around 18 million units.

"By 2020 we expect scooters to be half of the two-wheeler market in India. Our aim is to introduce a scooter model each year to help us achieve overall 10 per cent market share by 2016," he said, adding the IYM would launch scooters targetted at men and for family usage.

At present the company has a lone scooter model, Ray, which is targetted at women customers.

On motorcycles, Suzuki said the company will continue to offer new models both in performance and commuter segments without specifying details.

Commenting on the new R&D centre, Kobayashi said: "We have around 80 engineers at the Surajpur centre. We will set up another R&D centre by 2015 at our upcoming Chennai facility. The Indian centres will be used for developing low-cost models, while the high-end bikes will continue to be developed in Japan."

The Chennai facility will be used for exporting its products to other parts of the world, he added.

Besides India, Yamaha Motor Co currently has four R&D centres in Italy, Taiwan, China and Thailand. The Surajpur unit is the second integrated development centre after the Thailand one.

Last year, Yamaha had announced to invest Rs 1,500 crore to set up its third facility in India. The production of the new plant near Chennai will start by 2014 with an initial annual capacity of 4 lakh units, which will be expanded to 18 lakh units by 2018.

IYM has two manufacturing units at Surajpur in Uttar Pradesh and Faridabad in Haryana. While the Surajpur plant produces motorcycles for both domestic and export markets, the Faridabad unit makes two-wheeler parts.

Source Business Standard