Yamaha eyes 20% volume growth

The company, which is expecting to close this year with sales of about 650,000 units, said it has seen strong recovery in customer sentiments after the pandemic and buoyant demand in the country would help offset weak volumes overseas, where inflationary pressures are expected to drag down numbers.

India Yamaha Motor Chairman Eishin Chihana told ET, India is a priority market for the headquarters. “We have seen good recovery in urban and semi-urban markets after the pandemic. We have only been constrained because of the chip shortage, which impacted production of our models as they are positioned at the more premium end of the market. We are making efforts to best utilise available semi-conductors to meet customer demand, fulfill back orders. We expect, with improved supplies, our domestic volumes should increase to 640,000-650,000 units this year.”

Yamaha had sold 550,000 two-wheelers in the country in 2022.

Chihana said unlike more developed markets in Europe and the United State, consumer demand in India continues to remain strong. Two-wheelers sales here are expected to grow at a fast clip over the next few years to regain peak volumes of 21 million units per annum by 2026. Sales of motorcycles and scooters in the country grew by 17% to 15.86 million units in FY23.

“Outside India, markets are under pressure due to various factors such as high inflation, steep interest rates, volatile forex movements. The Indian economy is stable. There is lot of potential for growth in the local market fuelled by demand from a young, aspirational population”, he said.

Yamaha has decided to steer clear of commuter motorcycles and fortify its presence in premium motorcycles and scooters segments going ahead. Chihana said so far, the company’s products – R15, MT15, FZS, Fascino – have been received well. “Mid-term, our aim is to increase our market share to over 20% in each of these segments we operate in”, he said.As regards electric vehicles, Chihana said globally Yamaha has products on sale in Japan, Europe, Vietnam, and Taiwan. “Electric two-wheelers comprise about 4% of the overall market for two-wheelers in India. We expect this to grow to 30% by the end of the decade. We are working on a product, which will be introduced in the next 2-3 years.” Overall, the company plans to have a couple of vehicles in the space by 2030.

However, with bulk of the market still expected to constitute of internal combustion engine vehicles, Yamaha is working on alternate technologies to reduce fuel consumption and carbon emissions. Chihana said flex-fuel technology could be a good solution for a market like India.

“It will not only help cut crude imports and vehicular emissions. Use of higher ethanol blends in gasoline will provide an additional source of income to farmers”, he informed. The government would, however, have to work on a pricing policy for fuel with higher ethanol blends to encourage adoption among consumers.

Yamaha Motor has invested over Rs 1,600 crore since 2015 in India. The company has a total installed capacity to produce 1.55 million two-wheelers.