Yamaha gears up to compete for the rural market

Japanese automobile Yamaha Motor plans to rev up its India play and hopes to grow two-wheelers sales in rural areas
Yamaha gears up to compete for the rural market

Japanese automobile major Yamaha Motor plans to rev up its India play and is pinning hopes on the growing demand for two-wheelers in rural areas to boost sales. Last month, the company launched the Saluto, a motorcycle for the mass market that has been pitched as cheaper and more fuel efficient. It has lined up more such products in the category.

With its focus on the mass commuter segment, the company plans to double sales to 1.2 million units by 2017 from 549,000 units now. A management overhaul has also been undertaken and heads have been appointed for each segment, including sales and manufacturing, to align the company to its new goals

Both motorcycles and scooters will have equal importance for Yamaha. At present, motorcycles account for 55 per cent of total sales but the company is working to close the gap. “Sales ratio between scooters and motorcycles would be equal in the years to come,” says Roy Kurian, vice-president (sales & marketing), Yamaha India.

After witnessing a 23 per cent jump in sales in 2014-15, Yamaha is targeting a 30 per cent growth  to reach 800,000 units this financial year. The additional production capacity will come from the newly-built Chennai plant, which is set to be commissioned next month. The plant’s  production will be scaled up from 400,000 units annually to 1.8 million units by 2018.

Although a late entrant in the rural market, Yamaha hopes its fuel-efficient range will help it make quick inroads. The rural market currently constitutes nearly 70 per cent of all two-wheeler sales in the country but for Yamaha  it  stands at 30 per cent. So far Yamaha two-wheelers have been a popular choice among urban commuters. The Saluto, a 125cc motorcycle launched last month, is the first product aimed at the rural market.

Kurian says the top-down strategy of moving from urban to rural consumers is working well for the company. Having lined up a range of products, expanding the sales network is next on the agenda. About 150 new sales outlets will be added in 2015 and 70 per cent of these outlets will come in Tier III towns and rural areas. Currently the company has 400 sales outlets.

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