The Indian
two-wheeler industry is evolving and maturing at a very fast pace. Do you see
this evidence in terms of the changing pattern of product preferences and
choices among buyers? Is the market now getting more skewed towards automatic
scooters or do motorcycles still have a great future?
Yes, you’re right. India is changing
and you can see the two-wheeler industry, the way its growing, this year we
should be closing around 16 million. What I see is, in 2020, we should be at 20
million. There is a shift in preferences and people are looking at more stylish products.
This is happening in terms of not only scooters or motorcycles, it’s happening
across all segments.
People are shifting from motorcycles
to scooters now, which is quite evident, this is happening mostly in cities and
also in tier II and tier III cities as well because more and more females have
started working or are going to colleges and they want personal mobility. Earlier
the contribution of scooters was 25%-30%, now it is at 35%. What I feel is in a
year or two you’ll see scooters contributing to more than 40%. Already some
states have crossed 60%, like Kerala scooters are more than 60-65%. Tamil Nadu
is at 60%. Entire west, if I talk about Maharashtra, is more than 50%. This
change in trend that we’re able to see, it hasn’t come to the North at the
moment but I believe eventually it’s going to come to the North as well.
Commuter
bikes have always been the bread and butter products for any mass market
vehicle maker. Now do you feel that this segment is being redefined by the
commuter for perhaps more stylish and more technology savvy products and that
he is ready to shell out more for this?
India is basically a commuter
segment market only, by and large. Even the scooters people are buying, they
are majorly commuter. Around 70-80% are commuter segment customers. They are
tech savvy. They want more and more in their products. Indian customers don’t
want ‘world class’ products. What Indian customers want is a ‘high tech’
product which is having features of a ‘world class’ product at a bare minimum
price. Looks wise, style wise, everything should look like a world class
product having all the features, but the price should be very low.
When you
talk about world class, does it mean world class in terms of performance or the
build quality?
I’m talking about build quality. The
quality of things or parts which are used in products has to be world class.
Even the cable wire I am talking about, such a small thing, should be world class.
Because there is microchipping happening
every time inside a motorcycles engine. When you talk about world class
products you don’t see these kinds of things happening in those big bikes or
worldwide.
Here people are interested in their
bikes but they will only use the product for two or three years and then switch
to a new one. Those days are gone where people used to buy one motorcycle and
keep it for generations, it’s not like that anymore. They want to use it for
some time and then change it. What they are looking for is after 3 years will
they get an appropriate price for it or not.
Coming to
India Yamaha Motor, how will you describe the growth of your company? Do you
feel the company has an exciting portfolio of products that addresses every
segment of the market? And when it comes to marrying performance and mileage,
do you feel your Blue Core technology has delivered big time?
Satisfaction is very relative. In
this context, I’m happy to see that Yamaha has grown in the last couple years
and today we’re clocking some 70,000 bikes a month. And this number has come
from just a time span of two-three years. We we’re hovering around
20,000-30,000, now we’re at 70,000, which means we’re gunning for 1,000,000
including exports alone this year. Next year we’re looking at 1,000,000 in
domestic sales alone. This is a very healthy sign for us. I’m not satisfied but
I’m happy, because if a sales team becomes satisfied, it’s not good for the
organisation. We have to try more, because India is a big market, a 20 million
market. If we sell anything less than 2,000,000, by 2020, its not justified.
Mileage has always been a major
concern for customers in India, and this is something we were able to crack as
people expected power and performance from the DNA of Yamaha. Besides that
people we’re always asking ‘is Yamaha able to give mileage?’ Our research team
has cracked this with the BlueCore technology. BlueCore technology is very
unique, I can say. It first came with our FZ- FI, and now you see almost all
the products are having BlueCore technology. It’s basically working on three
things, it optimizes the combustion, so fuel isn’t wasted. It’s reducing the
power loss, when the bike is moving, because of the light weight aluminium we
have used in the engine. This results in maximum mileage. We’re able to see we
are gaining attention from more customers because of BlueCore. It was never
expected that a 150cc bike like FZ, the mileage touches around 50kmpl and all
our scooters are giving around 60kmpl. Customers have started coming back and
telling us that our bikes have started giving mileage without compromising its
quality or performance. It has been a breakthrough for us. BlueCore is helping
us a lot.
With India’s
tier II and III cities and towns progressing in terms of wealth generation, how
successful has Yamaha been in tapping these areas? What percentage of sales of
your products comes from tier I and what percentage constitutes tier II and
above? Do you see the latter contributing more in the coming years?
Frankly speaking, it is coming from
tier I and some portion from tier II. We follow a top down approach and first
we attacked all the ‘A’ cities then ‘B’ cities and then further going down. We
are doing around 40,000 motorcycles. This 40,000 extra has come from scooters
and scooters are more concentrated in tier I and tier II cities. It will take
some time to go down to tier III but it will eventually definitely go. Right
now we are getting our volumes from tier I and tier II. However, we had
launched a new product, the Saluto 125cc last year and the Saluto RX this year.
This is a commuter segment product and essentially this sells in tier III.
There we have started rapid expansion of network and one by one we’re going
down to that level.