Yamaha rides the evolution of personal mobility on two wheels

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By: Jayashankar Menon

The Indian two-wheeler market has been witnessing a tremendous growth in recent years. The two-wheeler market was dominated by motorcycles for the last three to four decades.

But after 2010 scooters became immensely popular among Indian two-wheeler buyers. From a nominal market share of 14% in 2007-08, scooters now command over 31.9% of the total two-wheeler sales in the country.

India offers enormous potential as the world’s largest two-wheeler market whose production could exceed 20 million units by the end of this decade. It is the overall evolution of scooters in terms of greater convenience, tubeless tyres, unisex appeal, fuel efficiency equalling that of motorcycles, and the comfort of automatic transmission that has made them increasingly popular.

The introduction of several new models by different manufacturers also boosted this upward growth curve in scooters. Another factor that works in favour of scooters is women empowerment. Customer preferences are shifting towards scooters owing to the convenience of driving.

Yamaha Motor India, a heavyweight in bikes, entered the scooter segment in 2012 with its Ray, followed Ray Z, Alpha, Fascino and Ray ZR brands. Yamaha infused a lot of new design elements into its bikes and it became an instant hit in the market, especially among the male riders.

Keeping women in mind the company introduced the brand Fascino. All these models offer a perfect mix of style and technology. With better road infrastructure and more women joining the work-force, the primary requirement of Indian riders has evolved from the mileage and price conscious 110cc motorcycles to the more convenient and unisex automatic scooters. The domestic sales of scooter stood at 5.6 million units for FY17.

Domestic scooter sales have grown at 16% CAGR during FY14-17. The share of scooters in the domestic market in FY17 is 32 percent, in FY11 it was at 21 percent.

Scooters are popular in the rural markets as well. With the government focusing on rural infrastructure development, the scooter manufacturers are hopeful that the rural market will contribute greatly to sales.

We recently met Roy Kurian, the Senior Vice President (Sales & Marketing) of Yamaha Motor India. The cool headed and a seasoned player in the Indian market said Yamaha is ready to face any kind of challenges and the brand is continuously brining products for the needs of the Indian customers. “We are trying to understand the changing customer needs and are proactively meeting them,” he added.

Roy Kurian joined Yamaha in 2002, where he was with network development and brand building assignments, which was the fast developing decade of the pre millennia.

A business graduate in Marketing Management, he took great steps in consolidating Yamaha’s business operations across various Indian states. He spearheaded the brand’s business in the growing economy and was posted as the National Business Head of the Yamaha India in 2011.

Roy helped to establish the strong image of the brand during the revamping period and executed new policies which are in line with the change of trends in the industry.

Currently, he is determined to keep Yamaha’s legacy intact, albeit in a different role of Senior Vice President. His enthusiasm in social research of customers’ expectations and industry strategies has endowed the brand with an edge to increase its market power in India.

Roy is confident that the company will succeed in strengthening the brand image in the Indian two-wheeler market. Like an astute marketing professional, he has set his priorities which include Sales and Marketing planning, Network development, Product strategy and launch followed by sustaining and improving the best products, developing Human Resources and refining customer experiences through excitement and innovation.

The evolution and emergence of the scooter industry in India and the transformation from a male-dominated family-oriented scooter to the sure sign of the identity of a woRoy-Kurian,Senior Vice President(Sales & Marketing), Yamaha Motor Indiaman in the contemporary times, the discussions criss-crossed several topics.

Yamaha in India

The latest achievement of the Chennai plant of Yamaha is that in over two years, the facility has manufactured 8.5 lakh scooters and motorcycles for the Indian market, in addition to 1.5 lakh units for exports.

Fascino is the largest produced scooter and it was the same brand that rolled out of the factory as the one-millionth scooter.

Other two-wheelers that had contributed to the achievement include Yamaha Ray Z, Ray ZR, Alpha in the scooter segment and Saluto and Saluto RX in the motorcycle segment.

Yamaha’s Chennai plant went on stream in March 2015 with an annual initial production capacity of 4.5 lakh units. The company has set a target of making nine lakh units a year, starting from 2019. For this, Yamaha has invested around Rs 1300 crore at the Oragadam plant.

It is pumping in another Rs 200 crore for capacity expansion. Yamaha’s Oragadam facility has a Vendor Park with nine vendors in its campus itself, one Thai firm and the rest, Japanese.

Collectively, these vendors have invested around Rs 760 crore to set up units and have given employment to 1900 people. Thanks to the Vendor Park, Yamaha has been able to minimise production and distribution loses, besides improving efficiency in the manufacturing process.

Yamaha has produced around 3.7 lakh units of its Fascino scooters. The production ratio between scooters and motorcycles is 7:3. However, Yamaha’s highest export models are FZ series, being made at the Faridabad plant, besides Ray ZR and the  Fascino, made in Oragadam plant in Tamil Nadu.

The Oragadam factory also acts as a manufacturing base for largely African as well as ASEAN and Latin American markets for Yamaha and its total production from facilities at Chennai and Surajpur is projected to reach 1.6 million units a year by 2019.

One of the niche players in the scooter segment, Yamaha has laid lot of emphasis on scooter as a segment, made by women for the women. The company, in fact, started its North Indian plant with an exclusive all women assembly line called Pink Line.

Personal Mobility

More number of scooters are being used areas, where women are more educated, employed and independent.

According to Roy, South India is leading the chart in terms of widespread use of scooters by women in the country. As the scooter has become a vehicle for personal mobility, it is no longer an old product anymore, says Roy.

The reintroduction of scooters in the Indian market by a crop of new manufacturers with their state of the art technologies is very young. “From 2001 to 2017, I will call it 16-17 years old only. It is still in the teenage,” he says with a smile.

Miles to Go

Lot of innovations have to happen in the two-wheelers and scooters segments, he agrees.

“In the motorcycle segment the evolution process was quick. Starting from 100 cc engine motorcycles in the 1980s, a decade later, the 125 cc vehicles were followed by 150 cc with a fuel efficiency of 70-80 KMPL. The scooter paled into insignificance. We now have motorcycles beyond 1000 cc engines. Similarly, the radical shift of motorcycles with two-stroke engines to four-stroke engines changed Yamaha the dynamics of this segment. In scooter segment, the evolution was painfully slow,” he says.

During the License Raj, only limited numbers of scooters were allowed to be produced, thus, necessitating years of waiting period. Even scooters were bought in foreign exchange by paying in US dollars.

“The scooter was like a family car on two wheels, where parents and kids on the move was always a common sight then,” Roy pointed out.

Redefinition of Scooters

When the waiting period was narrowed down to a few weeks instead of years, the scooter buyers continued their purchases, while majority of them started moving towards motorcycles.

The sales of scooters started tapering down and the segment was almost over. By 2000 99% of the purchases were in the motorcycle segment. From 2001 onwards, the advent of geared scooters started. The country was undergoing major transformation and the personal mobility need was more pronounced. Only 50% of men were owning scooters and motorcycles and the other half of the female population were depending on their men for the personal mobility.

For the first time, mobility has started to become a need for women especially, because of the rising education. More and more girls started getting educated and Yamaha taking up jobs.

With that development, women now want independence. She wants to have mobility before establishing her identity. She should have her own scooter. That is how the choice came into being and of late, the scooter has become unisex, says Roy.

India is a young country as 70% of the people is below 30 years.

“With scooter, you can go a short distance, park it anywhere, buy breakable things like eggs, put it under the seat or put it on the holder in front of your foot rest and bring it back home safe. This is only possible in a scooter and anyone in the family can ride it. This is why the scooter is getting popular now. Certainly, a scooterisation is happening in India. These trends, if I try to link it, it is starting from south.”

Correlation

There is definitely a correlation between the selections of scooters along with the education of women. In Kerala, around 70% of the population is driving scooters and 30% use motorcycles.

Pan India, the scooter market is around 30% and 65% motorcycle. In Tamil Nadu, it is 55% scooters and 45% motorcycle users. The cities, where women have more freedom and education, the scooter market thrives.

There is a correlation. For instance, take Kerala. The state has 100% literacy. Precisely, girls go to school, colleges, and women go for work and even family members use scooter. Similarly, the entire south has the same scenario, he says. Other markets like Maharashtra, Gujarat, Rajasthan and east India are using scooter.

“I personally feel that scooters should be 50%. May be in 8-10 years time the number of scooter and motorcycle users will become 50-50,” Roy says.

“The motorcycle growth in rural segments is gaining strength. Going forward, Tier-I and Tier-II cities will be dominated by scooters and Tier-III cities will be dominated with motorcycles,” he adds.

Urbanisation

Worldwide, urbanisation happened only like this. But the way urbanisation or industrialisation happened in all the western countries, they might have taken 100 years to evolve from one level to the next.

Today, India will not take that much of time. We are going to be changing very fast. Today if a vehicle is launched anywhere in the world, it is launched in India too in tandem.

But in India, things are changing pretty fast. So, when we talk about BS-VI coming in 2020, that means, it is like two years ahead of Europe. Things are happening in frenetic pace and it is called disruption.

Transformation

Yamaha“You had scooters, very conventional looking ones, and we also had very conventional way of selling scooters. Yamaha came out with a difference. We came in 2012. We always thought of introducing our scooters in a different way and we know our customers. We don’t have one product for all.

Ray and Ray Z are basically for college going girls and for personal mobility. Then we launched Alfa in 2014, which was meant for the family, with bigger seats and features. We launched Fascino in 2015. We have tied up with Miss Diva and Miss Universe in the title sponsorship. Now you can see all the Miss Divas, they are increasing the aspiration quotient of the product.

Rising Aspirations

Aspiration is there everywhere, Roy-san says. Today, if you go to a rural area, the girl or the boy might not be talking to you in English, but in a common language, but they know what fashion is because everyone watches movie, they see television programmes and they are aware of the changes that are taking place.

Today, if you look at the mobile phone, it has not left anything. So, aspiration is something which is there and we at Yamaha are trying to add to that. We launched a roduct for boys, Ray-ZR.

We have taken a route of music and tied up with Shah Baadsha and we have launched Badshah – Ray ZR Mera Swag official music video.

Different Positioning

Again, we are trying to give a different kind of positioning to the scooter segment. The Scooter Boutique is a new concept.

Now we have three such boutiques. Soon, we will have more boutiques coming up at strategic locations. When we talk about scooter boutiques, we try to again give a next level of satisfaction and surprise to the customers.

There again, we are reinforcing our statement, don’t buy a motorcycle or a scooter for the heck of it. A lot depends on the scooter or the bike you choose, while they impact your prosperity and people look at you in a different way altogether. They make the perception about the two-wheelers you are riding.

So, we are trying to help people who come to us to the Scooter Boutique and how it can again enhance your overall personality and style,” Roy says.

Corporate Social Responsibilities

Laying emphasis on the role of women employees, Roy-san says, “We have about 3,000 employees in Chennai. Out of that 237 or 8-10% of them are women. We have our CSR goal set on two directions.

The first one is to fall in line with Government’s Skill Development India Programme. In order to develop skills, we have opened Yamaha Technical School (YTS), where we forge alliance with several educational institutions across the country, where we take over their laboratory. We offer one-year Diploma course on Yamaha maintenance.

The advantage here is that once they finish their course, these youth can either be absorbed in our company or they can take up jobs with our dealers or they can even open their own Yamaha Specialist workshops in which they are authorised to get Government loans as well.

We have tied up around 32 such institutions pan India. The second is related to our own CSR activities including Yamaha Children Safety Programme (YCSP), creating awareness about the need to wear helmets.

“I am a rider too and I am getting my helmet soon from Japan. I own Yamaha MT09 motorcycle. I take time off on Sundays to take my bike out,” says Roy-san.

“Sometimes, when we get three or four days holidays at a stretch, I drive my motorcycle to Bangalore from Chennai and from there to Kochi and back. I have done that. We are bikers and whenever we get time, we will somehow make good use of it and go for a long drive. I had an MT01, which I disposed and recently bought the new bike. Recently, I went to Coorg with that bike from Bangalore to Coorg I had a wonderful drive,” Roy-san signs off with a personal note.

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