The Japanese firm aims to increase its market share to 12% in around a year’s time
Japanese auto major Yamaha Motor India, which aims to increase its market share from 5% to 12% in around a year’s time, is banking on the premium motorcycle segment for its growth. The company on Friday introduced MT 15, its 150 cc engine motorcycle. The company last year sold around 7.9 lakh units and is looking to take the figure further up to 9.13 lakh units.
Speaking to DNA Money on the sidelines of the MT 15 launch, last week, Ravinder Singh, senior vice president (strategy & planning) Yamaha Motor said the premium motorcycles segment grew by 8.5% for the company during the current year, while its scooter segment grew by 5%.
The country’s two-wheeler market has seen the entry of several premium motorcycle companies in the past few years. While Royal Enfield has a lion’s share in the segment, almost all other existing and new players are vying hard for the space including- Bajaj Auto and Hero MotoCorp, who are majorly in the mass segment, are also trying to create a separate niche for their premium brands with several launches expected in the coming two years. Similarly, Mahindra & Mahindra (M&M) through its subsidiary brand Jawa has been attracting a lot of attention. The premium motorcycle segment is generally defined as a bike with engine capacity of 150 cc and above, costing over Rs 1.25 lakh. As per an industry estimate, India’s premium motorcycle market is expected to touch $161 million by 2023.
According to vehicle manufacturers, the premium segment provides higher margins of profitability. Though the volumes are currently low, it is set to increase in the coming years on account of rising purchasing capacity of customers, higher aspirations, etc. India is amongst the top sellers of two-wheelers with over 20 million units being sold annually.
Data available with the Society of Indian Automobile Manufacturers (SIAM), shows that within the premium segment, motorcycles with an engine capacity of 250-800 cc have been striding ahead, though on a lower base.
According to senior executives of Yamaha Motor, the company after not finding much success in the mass segment decided to focus on the premium segment by 2007. The company has invested around Rs 1,500 crore in the past five years which was mainly for capacity expansion. “Another Rs 100 crore is likely to be invested in the current year, a significant part of, which will be used for marketing and promotions,” Singh said.
Yamaha Motor initially entered the Indian market in 1985 and later in 2008 got into an agreement with Mitsui & Co Ltd for joint investments. The company has manufacturing facilities in Faridabad, Surajpur and Chennai. Though the company currently has a production capacity of about 1.7 million units which is sufficient for the next couple of years, it has plans to take it to 2.5 million units by 2023.
RACING AHEAD
Rs 1,500 cr – The company has invested over the past five years
8.5% – Growth in its premium motorcycles segment
5% – Growth in its scooter segment
ZIPPING THROUGH
- The company last year sold around 7.9 lakh units in India
- India’s premium motorcycle market is expected to touch $161 million by 2023
- Yamaha Motor India has a production capacity of 1.7 mn units
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