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Relegated to an after-ran amidst the Hero Honda’s and Bajaj’s of the Indian market, Yamaha was hell-bent on completing its India comeback before its rivals had a chance to recover from the slowdown effect. In between cat calls of a global recession in July last year, the Japanese auto major launched its YZF-R15 in the Indian market; then when the US investment banking giant Lehman was breathing its last in September, Yamaha bravely launched its FZ-16 performance bike in India. And last week when the Indian Yamaha announced that it was in talks with vendors to provide spare parts for its cult bikes like RX100 and RD350, wowing old Yamaha loyalists in the process. The bid is to “win back the confidence of Yamaha customers,” says Yukimine Tsuji, Managing Director & CEO, Yamaha India.


Now consider if Yamaha had made its comeback with 100cc bikes (remember the RX100 that was once legendary in India?). Would the bike-maker have flourished? Possibly not, considering that the segment is now dominated by the world’s largest two-wheeler maker Hero Honda, which itself had been pretty aggressive all across 2008 in its marketing endeavours. Stunning market watchers, when the auto industry was just going on its slowdown hiatus, Hero Honda even came up with a 3-minute television spot, with the who’s who of celeb endorsers. Wisely therefore, Yamaha decided to focus on the weak link in the bike market – Bajaj – and decided to upset their premium segment apple cart instead. Guess marketers at Yamaha just thought differently and needless to say smartly...

The results are already showing. Between April–December 2008, Yamaha had won some of its own back in the premium bikes segment, registering a staggering 220% growth in the category, while rival Bechara Bajaj took a heavy beating. Not one to rest on past laurels on its blazing comeback trail, Yamaha is now busy expanding its dealer network, with plans to invest a cool Rs.240 crore in 2010-11 to develop India-specific models. And the focus on Indian market is clearly visible as Tsuiji states, “India is the first priority market for Yamaha Corporation...” Even Hero Honda’s marketing overtures in 2008 are paying off. To beat sluggish demand, it even launched three refurbished variants of Glamour, Glamour FI and CD Deluxe in December last year, notching up standalone net profit of Rs.300.42 crore versus Rs.275.01 crore on y-o-y basis. Hero Honda too is winning the heated war against the painful slowdown effect in the economy.

Bajaj too is reacting now, though a little too less and a little too late… Honcho Rajiv Bajaj is now promising to launch six two-wheeler models within the next nine months. In an interview with 4Ps B&M, S. Sridhar, CEO, two-wheelers, Bajaj Auto, blamed Bajaj’s aggressive strategy for the falling sales graph (huh!) and elaborated further on their plan. “Three of the six bikes will be in the value segment, one will be the Ninja 250cc and another will be a 750cc bike. This will ensure that by the time recession ends, we will be in a very strong position,” he promises.

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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