Yamaha Motor India has been gradually building its product portfolio in recent years to regain consumer confidence in its brand, as well as share in a promising market. 2015 has been full of action, with the company launching multiple products across different segments. The recent YZF R3 launch has reaffirmed its commitment to the performance segment, which it is known for. We spoke to Roy Kurian, Vice President, Sales & Marketing, Yamaha Motor India Sales Pvt Ltd to know more about the company's future goals and the roadmap to get there.
Roy Kurian has been with Yamaha for over 10 years now, and has held various positions in the company through these years. A management graduate with a Post Graduate Diploma in Marketing, Kurian started his career with Godrej GE Appliances in 1994. In 2000, he moved to the automotive industry and three years later, joined Yamaha as Marketing Manager for South India. Rising through the ranks, he has held key business positions in both Madhya Pradesh and Uttar Pradesh.
His fast-paced performance and rigorous growth focus helped him in growing to the next level as the Zonal Business Head – South, where he spent four years and two months to plan and monitor the development of primary and secondary dealer networks along with successful marketing initiatives. Kurian has been successful in establishing a strong image of the brand during the revamping period and has also executed new policies in line with change of industry trends.
ATR _ With the newly-launched R3, Yamaha seems to be bringing in the excitement back. How has the response been so far, and what numbers are you looking at?
ROY KURIAN _ The response from all dealerships is positive but especially in larger cities, the response is higher than expected. We're aiming to sell about 200 motorcycles per month to start with, which translates into about 20 % of this segment pegged at around 1,000 units per month in the country.
On an otherwise nicely equipped motorcycle the omission of ABS seems odd. What was the reason and can we see it in the future?
We're presently considering offering ABS in future models as an option. We plan our products based on customer requirement and we found that customers aren't keen on inclusion of ABS. Even on checking with our R&D team, we found out that ABS is more important on wet roads and a few other low-grip conditions. As an option, it's alright to have ABS but the same is not mandatory. We're offering a product based on customer preferences.
You announced 100 new dealerships, which will sell the R3 in addition to other Yamaha products. Any growth plans here?
We're starting with 100-plus dealerships for the YZF R3, but will eventually increase this number as required.
Give us an overview of the strategy the company is undertaking in terms of products.
Since 2008, we've been following a top-down approach and have been launching the superbikes, followed by their smaller versions such as the R15 and the FZ. Next up are the scooters, which as was expected, is growing. Presently, scooters command close to 30 % of the total two-wheeler market in the country. We saw this coming and had hence launched the Ray, Ray Z and Alpha to capitalise on this trend. We're doing well in the scooter segment and have recently launched a fashion scooter too in the form of Fascino.
The most important thing to support good products is the right network. We're working on improving the same and are looking at adding about 150 new dealers in 2015, taking our total network of dealers to about 550. This equates to a growth of roughly 40 % over last year. Hence, growth in our product portfolio is going to be complemented by a growing network. At the same time, we'll focus on ATL (above the line) & BTL (below the line) activities to improve our performance.
What is the marketshare and volumes you're looking at and where are you placed right now?
We're targeting 10 % marketshare between 2018 and 2019, which would translate into volumes of about one million vehicles per annum. In comparison, our present marketshare is close to five per cent and we're expecting to close 2015 between 620,000 to 630,000 units. This would be a healthy growth of about 20 % over our last year's numbers.
Can we have a further split in terms of vehicle segments?
In terms of scooters, our marketshare would be higher than motorcycles at about seven per cent. In motorcycles, we're not having a significant presence in the 100 cc segment, which is the volume generator. Hence, it would be too much for us to expect any considerable marketshare in such a large volume market at this point. We, however, do have a strong presence in the 150 cc segment, where we're performing well. In addition, bulk of the 100 cc sales come from the rural market, where we still need to build up our network. Getting our network to offer us adequate coverage would take another two to three years.
In all the major cities and Tier II cities, we have good presence and a decent marketshare in both scooters and motorcycles. In the Tier III cities, we either aren't present through network or do not have the right products. We know this is an improvement area for us and are working towards it.
By when can we expect a competitive product from Yamaha in the 100 cc segment? We've been listening about the work going on in R&D for long now.
I can't comment on it right now but our R&D team is working on the required set of products and we'll let you know once the product is ready.
Let's talk about the Fascino. An interesting product, but why that segment when there aren't great volumes to be gained?
Scooter consumers are normally family people, who have been used to conventional vehicles in India. What was missing was a good-looking, fashionable scooter at an affordable price. We spotted this gap early and launched the Fascino and adopted a marketing approach to highlight it as a fashionable scooter. The acceptance of the product has been good and we already have bookings for 30 to 45 days across the country. In absolute numbers, we're doing about 10,000 units a month but the demand is significantly higher than that.
Coming back to your earlier question on future products, Fascino is one such product we planned a long time back in a segment that did not exist. Not having the luxury of being a large player in the market, it is imperative for us to identify such segments and hence we do not speak about any future products. The approach for us will be to identify new segments or those that aren't crowded since we do not want to have 'me too' products in overcrowded segments.
Your take on the market right now and how do you expect things to shape up?
I do not expect any major action taking place in the motorcycle segment anytime soon and the segment is expected to remain flat this year with a bit of growth from the upcoming festival season. Scooters are expected to grow to about 30 % or a bit more of the two-wheeler segment by next year and to about 35 % by 2017. Scooters, hence, are expected to account for majority of the growth in the coming years. In terms of policy-making, there has been an update on the entire country shifting to BS IV emission norms for four-wheelers, but there still isn't any clarity available for two-wheelers. That, however, is a matter of time and should happen after the four-wheelers.
I also expect the 150 cc market to grow faster, while the 100 cc segment will struggle as those customers are shifting to higher displacement motorcycles or scooters. The economy is expected to revive from next year at least and when that happens and customers opt for higher displacement bikes, we should benefit. At the same time, we'll continue our focus on the 100 cc and 125 cc segments, since the majority of sales in rural areas still comprises of 100 cc motorcycles.
The 125 cc segment too is quite crowded and you mentioned not having a 'me too' product. What makes the Saluto so different?
First of all as a brand, customers are happy with Yamaha, with reliability
and durability of our motorcycles. Somehow though, they do not attribute fuel-efficiency with us although bikes such as the Crux deliver good fuel-efficiency. This is where our Blue Core technology comes in and given the right pricing and positioning of the Saluto, it should fare well. Customers are happy about this and the fact that the reliability and styling continues to be what they expect from Yamaha. We're getting decent results so far and we still have a long way to go since customers in this segment aren't that open to experimentation.
Any specific numbers on the Saluto?
Since May this year, we're looking at total sales of about 70,000 in 2015.
With performance being synonymous with Yamaha, do you think it will be hard to turnaround things in the 100 or 125 cc segment?
Racing is our heritage and we will continue to work on that image. But India is an evolving market with a wide range of varying demands. Hence, we need to satisfy customers from multiple segments and not just the ones looking for performance. While that is a 'cool' image, which we want to retain, we're also looking at building a 'warm' image. The cool image gets us the young boys but it's the warm image, which will get the family members step into our dealerships.
While striking this balance is a difficult task for any brand, we're trying to do that. From a technical perspective, this is where Blue Core steps in as it reflects a warm image and is related to efficiency, comfort and value. Hence, more of our upcoming products associated with this warm image will get the Blue Core technology.
How is the superbike or large motorcycles segment faring for you presently?
In this segment, we aren't as aggressive as some of our competitors, who primarily sell such products only. Our present numbers range between 50 to 60 units a year. We're taking the route of increasing our numbers in the higher displacement segment with the R3. The focus for us right now is to establish our position in the commuter segment or the mass-production two-wheelers. The superbike customer has totally different expectations, which demands for a different set-up as well if we plan to increase our numbers significantly. For the present scenario, we're there in the market for our customers and are managing a sales & service system capable of taking care of the present numbers. We'll focus on this segment and an adequate supports system but that is for the future.
Interview: Arpit Mahendra