The Chairman of Yamaha Motor India Group of Companies tells the hybrid scooter is Yamaha’s first step towards entering the electric vehicle market in India even as the Japanese major develops an all-new EV platform.
15 Jul 2021 | 8162 Views | By Murali Gopalan
The new FZ-X and Fascino 125 Fi Hybrid scooter are cues to India Yamaha Motor’s aggressive new product strategy. The Chairman of Yamaha Motor India Group of Companiestells the hybrid scooter is Yamaha’s first step towards entering the electric vehicle market in India even as the Japanese major develops ...
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The new FZ-X and Fascino 125 Fi Hybrid scooter are cues to India Yamaha Motor’s aggressive new product strategy. The Chairman of Yamaha Motor India Group of Companies tells the hybrid scooter is Yamaha’s first step towards entering the electric vehicle market in India even as the Japanese major develops an all-new EV platform. He also details the many efforts at cost rationalisation and why IYM can play a bigger role for Yamaha in the coming years.
June 18 saw India Yamaha launch the new FZ-X as well as the Fascino 125 which packs hybrid technology. What is the significance of these new products and do they mark another strong statement of your vision to be in the premium space?
It’s quite significant. The launch of the FZ-X and the Fascino 125 Fi Hybrid reiterates our commitment to Indian customers. As regards the Fascino 125 Fi Hybrid (which was developed at YMC Japan), we will be coming up with more models with similar technology this year.
When we launched ‘The Call of the Blue’ brand campaign in 2018, our focus was to position Yamaha as a brand which embodies the global spirit of motorcycling culture. Since then, we have continuously made efforts to introduce models in the Indian market which carries the Yamaha racing DNA and are a perfect blend of style and power.
Currently, Yamaha holds a strong position in the premium space with a 19 percent market share. This has been due to the strategically planned product portfolio designed to cater to both new and experienced riders alike. Yamaha’s target customers are young Indians, whose priority is to find their own identity and riding style along with exciting performance. Our new products launched on June 18 — the FZ-X and Fascino 125 Fi Hybrid — will further strengthen our position in this space by fulfilling the requirements of a diverse range of customers.
A recent press statement from India Yamaha Motor indicated passing on the benefits of cost reduction measures to your customers. How was this exercise achieved from the viewpoint of localisation?
At India Yamaha Motor, we follow a multifaceted approach to improve operational and production efficiency with better processes. This is a regular exercise which involves collaboration with suppliers, maintaining a full-proof inventory management system, upskilling employees, implementation of automated solutions to deal with complex processes and optimising the cost of raw materials through R&D efforts. It is a combination of all these important factors which has helped us to achieve the cost reduction targets in production activities.
As a customer-centric company, it becomes our duty to pass on the benefits of the cost reduction measures to our customers.
Are you concerned about the rising input costs, especially steel? Does Yamaha have a strategy to counter this like using alternative materials or further localisation?
Yes, of course, it’s a matter of concern . . . and it’s not only the rising input costs in steel but also other precious metals. After the implementation of BS VI norms, the usage of precious raw materials like palladium, platinium and rhodium has increased. These are expensive metals and such steep increase in prices impacts the overall project cost to a great extent.
We have started our study in this area and are trying to see if we can reduce the usage of such raw materials in our products and can develop an alternative to them.
Are you also working on some product initiatives on electric since many manufacturers are now part of this segment?
The Fascino 125 Fi Hybrid is Yamaha’s first step towards entering the EV space in the Indian market, on a small note. The Fascino 125 Fi Hybrid with electric power assist is just one of many technological advancements achieved in the field of electric mobility by Yamaha, which we plan to introduce in the Indian market over time. Besides, we already have a dedicated team at our Japan headquarters, working on an all-new electric vehicle platform for India and other global markets. In fact, we have been manufacturing EV models in Taiwan for the past two years in association with Gogoro. So, the technology and the expertise to develop and manufacture EV models is in already in place.
However, we are contemplating factors like pricing, performance and infrastructure before we roll out any products for the Indian market. This is because the success of EVs solely depends on the acceptance of customers at large, which is only possible with proper availability of infrastructure, charging stations, battery production and swapping infrastructure for electric vehicles. Currently, there are bigger challenges related to investments and they cannot be addressed unless the Indian government lays down a clear roadmap and a stable policy.
Having said that, we will continuously progress with globally competitive research and development activities. Once all the aforementioned factors are addressed by the government, we will introduce such technologies for our customers in India at a large scale.
What are your concerns on the second wave of Covid and the impact it has had on the supply chain?
The economic damage from the second wave of Covid-19 is significant for our dealers and suppliers. We have already supported them as much as possible and have made efforts which helps us recover together. The second wave was at its peak in April and May in different parts of the country. The rising cases of coronavirus infections led to localised lockdowns due to which the suppliers were forced to halt their production. Even the logistics operations were severely restricted. This resulted in total disruption in the supply chain, impacting the overall production and demand.
India Yamaha Motors started launching Blue Square showrooms across India based on its strategy of transforming its retail outlets to unique, concept-driven centres.
Are there any lessons from Covid you would like to incorporate for Yamaha like rotational work from home / office?
In the past year, the working style across geographies has undergone a rapid change due to the external factors (Covid-19 pandemic situation). Working remotely has emerged as one of the viable options in the current scenario and has even yielded productive results.
What we have learnt during this period is that we should always be prepared to face any challenge and should be flexible to adapt to any kind of situation. We need to keep transforming and innovating to manage critical business situations.
Do you believe that companies like Yamaha need to have extra office space after Covid or will you look at a smaller corporate setup in the future?
We would consider downsizing of office space and respond to the changing working style in the current scenario as well as for the future. It also becomes important for us to utilise our resources effectively. It gives us an opportunity to reduce operating costs and invest more in technology to make work from home more productive and efficient.
When do you expect growth to pick up in the Indian two-wheeler market this year and the numbers Yamaha could be looking at?
I believe that the Indian economy and the automobile sector will be back to normal once the whole of India is vaccinated. The large-scale vaccination drive run by the government authorities and the corporates will surely play a vital role in the recovery of the Indian economy.
The auto sector will witness growth gradually once the festival season begins. If you compare this year with 2020, you will observe that in 2021, state governments have been directing lockdowns with a clear time frame which has helped companies to plan and channel their economic activities in a better
manner.
Finally, are you keen on India playing a larger global role for India in terms of shipping out components and vehicles to other parts of the world?
India is a very important market for us. We want to make the most of every opportunity here. In terms of shipping out components and vehicle to other parts of the world, we would want India to play a bigger role in coming years. We have a strong R&D function here and a good collaboration with the suppliers who understand our requirements and who are open to innovation.
Currently, we export between 25 to 30 percent of our total production to countries in Latin America, Africa, and South Asia. Our products are well accepted in these countries and the demand for them is growing year by year.
This interview was first published in Autocar Professional's July 1, 2021 issue.