Yamaha plans to invest Rs 400 cr to up share

Yamaha Motor India, a 100 per cent subsidiary of Yamaha Motor Company, Japan, is looking at investing Rs 400 crore over three years to corner a 20 per cent market share of the two-wheeler market by 2007.

"The investment will primarily be in manufacturing, engineering, marketing and branding segments. We will also be consolidating in terms of downsizing workforce and phasing out some Yamaha models," A V Srinivasan, executive vice-president of Yamaha India, said at the sidelines of the launch of its new bike 'Fazer'.

Yamaha India had its first round of voluntary retirement schemes (VRS) earlier and is again looking at bringing down the number of employees from 2,400 to about 2,000.

"The cost for this would be around Rs 50 crore and the downsizing will continue till the time we break even," Srinivasan said.

The two-wheeler major also aims to break even next year against the earlier target of 2006. "We are looking at breaking even at a sales of 3.60 lakh units and will wipe out our accumulated losses of Rs 150 crore," Srinivasan said.

Yamaha will also phase out 'RX135' and 'Rajdoot' in six months as the two-stroke models will not meet the new green norms.

The company is looking at bringing in new models. The 125 cc four-stroke Fazer, priced at Rs 43,990 (ex-showroom Delhi), is the first in the series.

"At present, we hold the fourth position in the Indian bike segment with a share of only 7 per cent. We aim to get to the second spot so we will bring in new models," H Yanagi, CEO and managing director, Yamaha Motor India said.

The 'self-start' and 'disc brake' variants of the new motorcycle 'Fazer' will be available by October this year. Initially, Yamaha is targeting 'Fazer' sales at around 6,000-8,000 units, which will go up to 20,000-25,000 units.

Overall, Yamaha sales is expected to touch 3 lakh units this year on a sales turnover of Rs 1,250 crore against Rs 1,000 crore last calendar year. Sales of Yamaha dipped 20 per cent last year. In the first six months this year, the company sold 1.2 lakh units, including 10,000 units in exports.

It is also looking at introducing scooters in the market as well as bringing in high-powered bikes as completely built unit (cbu) imports as and when the import duties are relaxed.

"The scooter project is currently under study, while for high-power bike imports we are waiting for duties to come down by 2007 in line with the WTO stipulations," Yanagi said.

The company also exports components from India and this year, these are expected to contribute about $20 million.