Aug 7, 2007

2 What's ailing the Japanese in India..?? [Part I: Yamaha India]

A look at what's wrong with the Japanese Companies in India.. Part I: Yamaha India

A picture is worth a thousand words..

The above graphic shows how Honda, Yamaha and Suzuki don't even together account for 10% of the Indian two wheeler market.

So what's wrong for these Japanese companies who once taught Bajaj and TVS the trade of making two wheelers. What's ailing these Japanese Two wheeler maker..??

Part I: What's ailing Yamaha India

The mere mention of the brand name "Yamaha" evokes a feeling among bike lovers which is diffcult to describe. The legend of its yesteryear superstars namely the RD350 and the RX100 still manages to overshadow the fact that Yamaha India has made straight losses since 2001.

There are many bikers around in the country who still venerate the Yamaha brand. It wouldn’t be surprising if many of them have never owned a Yamaha Before. Such is the equity of brand Yamaha in India.

Yamaha happens to be the World number two in terms of two wheeler sales after Honda. But in spite of having its presence in India since the mid eighties, Yamaha at present has a market share of just around 3 %.

Needless to say that so far Yamaha has performed below expectations in India.

Lets try to find what has gone wrong for Yamaha India..??

Product Lineup

Lets first look at the Yamaha Products in India.. We have the

    100 C.C (economizers)

  • Crux
  • Libero G5
  • Alba (recently launched)

    125 C.C

  • Gladiator (with its “Type J.A” variant)

Nothing else.. at least till now..!!

Ask any Tom Dick and Harry on any Indian street to associate the first word that comes across his mind with "Yamaha". I can safely bet my money that the answer will invariably be “Speed, Power, Performace”.

After the RX100 and the RD350, by no means can Yamaha make us believe that its 100 cc and 125 cc bikes are the best that it can do in India.

Administrative Problems.

In 2001, Yamaha India bought majority stake in Escorts, its erstwhile JV partner and started on its own as fully owned Japanese subsidiary. But it did not mean that Yamaha India got a fresh start in 2001. Yamaha India had to carry along the Escorts legacy in the form of its workers who previously used to work under Escorts. This is a problem that Yamaha India hasn’t been able to sort out even today.

If you don’t understand how that can be a problem, just try to teach computers to your grandpa and you will understand what I mean. Times had changed since Escorts-Yamaha used to churn out the RX100. Changing times means a different approach to work which requires a change in the mindset of the workers at Yamaha’s plant. And this is one aspect which the new Japanese Bosses at Yamaha India haven’t been able to address so far.

Inefficient and Archaic Dealerships:

Compared to the new and swanky showrooms of its competitors, majority of the dealers and showrooms of Yamaha India looks like it still belongs to the “Licence Raj” days. These dealerships have been in operational since Escorts-Yamaha days. With concepts like “Pro-Biking” showrooms of Bajaj which have been designed to provide a rich experience to the biker, Yamaha India still has a lot to pick up.

Marketing Disaster:

Similar to the how (according to me) the Honda Unicron, has been a marketing failure in India, virtually every product from Yamaha can be a case study for failed Marketing effort.

After marketing research the next steps of marketing can be summed up as

  • Segmentation
  • Targeting and
  • Positioning

First of all Marketing Dept. of Yamaha picked up the wrong Segment (100 cc segment) to play in, targeted the wrong customers (actually it beats me to decipher who is Yamaha’s 100 cc target customer) and doesn’t have a strong and clear Positing statement for its products.

Lets try to figure out “What is the positioning statement of Yamaha India’s motorcycles..” From the wheelie popping Gladiator 125 cc ads featuring , John Abraham and the latest ad of the 100 cc Alba here a Girl gets the tattoo of the 100 cc Yamaha Alba on her back, we can say that Yamaha India’s bike are positioned as fast and with sexy designs.

Sexy looks for a 100 cc commuter..?? Wheelies from a 125 cc executive commuter..?? Yeah, that's what we need. Probably you have the answer now.

What can we expect from the future..??

No matter how miserably Yamaha’s offerings’ have performed in India so far, Indians still have and probably will always have respect for any products from any Japanese Bike maker.

The day Yamaha India launches a proper performance bike, “desi” bike enthusiasts will sit up and take notice. There is no reason to believe that the World’s Second largest Two Wheeler maker can’t pull it off in India. According to me its just the matter of application and letting go of the past.

What is required is to think and start afresh. Let’s see for how long can Yamaha India keep us waiting.

Inputs from: Business World

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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.


Anonymous said...

You forgot one more thing: Language Barrier, few years ago I was watching YMIL CEO talking to one reporter at Auto Expo on the launch of mulicolour Libero on TV, and I could hardly understand what he was saying. He was struggling for every single word, and the pronounciation wasn't good either. It was a matter of couple of minutes now imagine what would happen in the office/factory where he has to talk a lot, lot more .... only 15-20% will be understood, may be less, may be more, and the result is Libero, Alba, and Gladiator.
Things could very easily be reversed if they plan to launch V-IXION and 250cc Virago with proper modification and improvement, but no use banging your head on the wall or is it?
Do Reply

Payeng said...

Yes, you are right about the language problem.

But the launguage problem is just an indication of the problems that the Japanese Bosses might have been facing working in a Foreign country amidst a different culture with different people.

First they have to understand our (Indian) culture and our people and then our (Indian) market before they can plan effective strategies.

Problem for Yamaha and other foreign companies operating in India is that; India is changing at a fast rate socially and economically and so is the Indian market.

Lets see how fast can the Japanese companies understand the Indian market.

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