Yamaha Plans to Sell $500 Motorcycle in India

NEW DELHI, INDIA – June 25, 2012 – (Motor Sports Newswire) – Yamaha Motor Co. plans to develop its cheapest motorcycle globally in India, to be sold for about $500, as the Japanese two-wheeler maker battles with rivals such as Honda Motor Co. for a bigger share of the market.

“We have so far done well with our premium motorcycles in India and now we think is the time to address a bigger part of the market where volumes are high,” Hiroyuki Suzuki, chief executive of India Yamaha Motor Pvt. Ltd., said in a recent interview.

Indian Bollywood actor John Abraham with a new
Yamaha motorcycle during a 2010 unveiling.

The new model will likely help Yamaha expand sales in India, where two-wheelers are popular because they are cheaper and more fuel efficient than cars and utility vehicles. The company has a target of a 10% market share by 2016 from 3.5% now.

Motorcycle sales in India, the world’s second-biggest two-wheeler market by volume, grew 12% to 10.1 million units in the fiscal year through March. About 70% of sales comprise entry-level motorcycles with engine capacities of 100-125 cubic centimeters.

Hero MotoCorp Ltd., India’s largest two-wheeler maker by sales, has six entry-level motorcycles, while companies such as Honda, Suzuki Motor Corp. and Yamaha are expanding their presence in the segment.

Yamaha currently sells its 110cc motorcycle models Crux and YBR in India, priced at 36,300 rupees ($635) and 43,500 rupees ($760), respectively. Almost all competing brands are in the same price range.

“Just about one in every 25 people in India owns a two-wheeler,” Mr. Suzuki said. “There is a huge scope to attract more buyers with a fuel-efficient product that is priced reasonably.”

Mr. Suzuki said India Yamaha wants to strengthen its research and development capabilities to develop low-cost models without its parent’s support. He didn’t specify any timeline for introducing the new entry-level motorcycle, but said it will be exported as well.

Yamaha is investing 23 billion rupees in India in the next five years to develop new products, build a new factory and raise output to meet the expected surge in demand. By 2018, it plans to make about 2.8 million vehicles a year in India, up from about 600,000 now.

The company aims to boost its sales in India to two million vehicles by 2016, from 520,000 in 2011 and a targeted 640,000 in 2012.

Mr. Suzuki said Yamaha will sell at least three new scooter models in India in the next two years, one of which will be introduced by October.

SOURCE: Wall Street Journal