Feb 26, 2007

6 Yamaha India in bad shape

Yamaha India in bad financial health. Issues notice to its employees

Yamaha India
24’th Feb, 2007: The Economic Times carries a report which says that they (Economic Times) have got a copy of an internal circular, dated Feb 12, 2007 and signed by Yamaha Motor India MD T Ishikawa.

"The Economic Times carries this story under the headline “Yamaha may shut shop if numbers don’t improve”"

The internal circular says “The top management is closely monitoring” it’s new “marketing strategy and productivity of manufacturing” indicators. “If either does not go as intended the management is ready to shut down the operation here,”.

The Economic Times carries this story under the headline “Yamaha may shut shop if numbers don’t improve”. Just reading the headline might make the reader think that Yamaha India is looking at shutting its operations in India.

"Just reading the headline might make the reader think that Yamaha India is looking at shutting its operations in India"

According to The Economic Times, Yamaha sales in January 2007 were a mere 9,904 units, which officials say is among the lowest it ever hit in India. A sharp 50% drop in sales from December 2006 sales figures of 18,136 units.


The Economic Times also states that sources in the auto industry say that in the past three-four months, Yamaha has lost several of its senior managers including VP finance, Marketing head and also head of Manufacturing.

The Economic Times also states that the management at Yamaha is trying out new products and marketing strategies to revive its sales. Despite losses of around Rs. 1000 crore since 2001 (when it bought out its partner Escorts stake and its Indian operations became a 100% subsidiary), the company is planning to invest nearly Rs. 1,600 crore over the next five years.

Yamaha Libero-G5

According to me the reason why they have accumulated losses in India after 2001 is due to their product portfolio. None of their 4 stroke models have been successful in creating impact in the market strongly. Their line of 4 stroke models introduced after 2001 includes

  • Enticer (125 C.C mini cruiser) which has been discontinued
  • Crux (100 C.C commuter) which has not been very successful in its category
  • Experiments in the form of (106 C.C) Libero-Libero Lx-G5
  • Experiments again in the form of (125 C.C) Fazer-New Fazer-Gladiator

Yamaha Fazer, Gladiator

" It needs to go back to producing “High Performance” models and therefore strongly differentiate itself from the competition"

The present 125 C.C Gladiator though a good bike have not caught the imagination of the consumers. Yamaha needs to catch the imagination of the bikers like its legendary 2 strokers RD350 and RX100 did 20 years back. It needs to go back to producing “High Performance” models and therefore strongly differentiate itself from the competition.

Yamaha India also needs to improve its dealerships which in some places cannot match the standards set by the swanky dealerships of the market leaders Hero Honda, Bajaj Auto, TVS Motos and Honda Motorcycle and Scooters.


So the above circular can be taken as a warning from the management of Yamaha India to its employees, asking them to pull up their socks and get their act together. Many biking enthusiasts including me (presently I own a restored Yamaha RX100) have high hopes from this Japanese giant.


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This is to remind that the Views or Opinions in the blog are entirely mine unless explicitly stated. The Views and Opinions published in this blog should in no way be related to any other person or organization associated -- directly or indirectly -- with me.




6 Comments:

Utpal said...

Hey Payang,
Sorry to post a non-linked context in this comment section.
Dunno where to post. Guess I should have mailed to you.
Too much enthusiastic!!!

Got a CBX 400 F mid 80s model.
Couldn't wait for Pulsar 220 or Bullet

Will get it delivered in a day or two.

Will surely send you the photos

Cé$âr said...

The guys at Yam thought they could ride the "junta" bandwagon on reputation of fairly reliable machines (like Rx series) but well - without a power laden portfolio they missed out on the performance oriented bikers and acc to me, led to an image problem as well.

I believe their only hope lies in a 150cc bike. Greater capacity bikes = more expensive = lesser sales

150 is the booming segment anyways and it'll be a while before 180 becomes the happening segment.

Payeng said...

Agree with you ce$ar, Hope the new models from Yamaha are performance oriented ones.. There are enough of 100 c.c "economisers" around



Utpal.. its great to hear about your new ride.. Congrats bro.. You can mail pics/details about your bike to me if you like

Anonymous said...

Why is this piece of news keeps coming up, first link on the first page, every time I try to look for something new about Yamaha India. This news is months old; shouldn't it be in page 2 or 3 of google?

Anonymous said...

Why is this piece of news keeps coming up, first link on the first page, every time I try to look for something new about Yamaha India. This news is months old; shouldn't it be in page 2 or 3 of google?

Cé$âr said...

The guys at Yam thought they could ride the "junta" bandwagon on reputation of fairly reliable machines (like Rx series) but well - without a power laden portfolio they missed out on the performance oriented bikers and acc to me, led to an image problem as well.

I believe their only hope lies in a 150cc bike. Greater capacity bikes = more expensive = lesser sales

150 is the booming segment anyways and it'll be a while before 180 becomes the happening segment.

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