(Pic by Satheesh Nair)

Bruised and cornered, when Yamaha India began revitalising its sagging operations in 2006, then CEO Tomotaka Ishikawa decided to avoid the ‘herd’ (100-125-cc category that comprised 79 per cent of the bike market then, and 70 per cent now) in order to revive his company’s spirit. He saw the ‘niche’ in performance bikes in the 150-250-cc segment, which accounts for about 20 per cent of the bike market.

Ishikawa’s strategy has worked in the interim as Yamaha has seen some revival recently. It has sold over 10,000 vehicles a month — mostly its new performance bikes, the FZ-16 and R15 — over the past nine months in the 150-250-cc segment, taking its share in the segment to more than 7 per cent in the first quarter of FY10. Together with Hero Honda and Honda — whose shares have risen from 8 per cent and 12 per cent, respectively, in FY07 to 11 per cent and 21.5 per cent in FY09 — Yamaha has eaten into segment leader Bajaj Auto’s market share, which shrunk from 60 per cent in FY07 to 50 per cent in FY09. Now, Ishikawa’s successor Yukimine Tsuji (appointed CEO in 2008) has the daunting task of making this comeback work for Yamaha.

“I met our suppliers and distributors last August and showed them two new bikes,” says Tsuji, adding that they were initially sceptical, but turned converts after they saw the Fazer and the FZ 16. Sachin Mathur, head of Crisil Research, says that the change in salary profile and aspirations in tier-I and tier-II cities have altered consumer preferences. “There will have to be new strategies for the 150-cc segment with changing urban dynamics because it is such a small base,” says Mathur. He also says that while people in cities go for fuel-efficient cars, they prefer bikes that are sporty and trendy.

Over the past 10 years, Yamaha announced grand plans and brought in new products, such as the Fazer 125-cc, the Libero, the Gladiator and the Crux, all of which sizzled for a while and then fizzled out. Ishikawa, for instance, took over in early 2006 when Yamaha’s sales were plunging in the 150-250-cc segment. Sales went down to an astounding 71 units in April 2006. Through his strategy tweak, Ishikawa managed to take sales to an average 4,000-plus units in FY07. But thereafter, sales began to slide again, and in December 2007, when he quit, Yamaha sold a mere 1,358 bikes in the 150-250-cc segment. Also, Ishikawa’s strategy to push the niche market sent Yamaha’s sales in the 100-125-cc segment crashing — in April 2006, Yamaha sold 19,935 bikes in that segment; and in December 2007, a mere 4,161. Tsuji now intends to position Yamaha firmly in the 150-cc segment and upwards through performance bikes.