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With India cementing its position as Yamaha Motor’s second-largest global market after the ASEAN region, the Japanese two-wheeler giant is shifting its strategy to focus more on the premium market under its new Chairman and MD for India, Itaru Otani.
“Our target is Gen Z and upper-middle-class customers. We are strengthening our premium strategy as these two customer segments expand,” says Otani. “We are looking to get more of those customers to buy our products by enhancing their lifestyle and fulfilling their aspirations.” India’s two-wheeler market, once dominated by affordable commuter models, is undergoing a structural transformation. The share of entry-level motorcycles (sub-125cc) has declined from 75.9% to 75.5% in FY25, reflecting a consumer shift towards higher displacement, feature-rich models.
“We are not just selling products; we are aligning with the aspirations, lifestyles, and market values of India’s Gen Z and upper middle class to create a deeper brand connection,” Otani said in an exclusive conversation with Autocar Professional. This strategy already reflects in Yamaha India’s portfolio, which includes: Premium motorcycles: R Series, MT Series, and FZ Series (149cc to 321cc) and Premium scooters: Fascino, Ray, and Aerox (125cc to 155cc).
In FY25, Yamaha captured nearly 10% of India’s 150cc+ motorcycle segment and led the 150–200cc scooter segment with an 80% market share. Despite holding a modest 4% overall share of the two-wheeler market, Yamaha’s bet on premium positioning appears to be paying off.
“India has the highest demand and the fastest growth among global markets—no other country matches its scale,” Otani adds.
Yamaha’s earlier forays into the entry-level market with models like the Crux and Saluto met with limited success. Otani is clear: That chapter is closed. “We have no plans to re-enter the lower displacement segment,” he confirms.
Instead, Yamaha is focused on leveraging India’s combined demand for motorcycles and scooters, unlike ASEAN countries, where scooters dominate. However, he points out that the shift to premium is not just restricted to India. “Our premium strategy is a regional strategy, including ASEAN,” he notes.
From Emerging Market to Export Powerhouse
Besides tapping the fast-growing demand for premium motorbikes in India, the Japanese firm will also use the country as a base to export to Europe and the United States. Yamaha Motor sold 6.93 lakh two-wheelers in India in FY25 and exported 2.96 lakh units—making it the fourth largest exporter of two-wheelers from India. But Otani sees even greater potential.
“Previously, we developed products country by country. Now, we are considering the global market while creating a product,” he says. The company already exports to 58 countries, and the goal is to expand into northern hemisphere markets, including Europe and Japan. “India’s emission norms are now comparable to those of Europe, and they position us well to export to developed markets.”
Yamaha’s investor presentations in 2024 echoed this. India has introduced emissions, brakes, and ethanol fuel regulations that are on par with Europe’s. The company’s global management noted during an investor briefing, “We expect India to become Yamaha Motor’s second major global manufacturing hub after Indonesia.”
Yamaha’s Global Outlook
India isn’t just a manufacturing base. Yamaha is also betting big on local R&D, to create a world-class development center. “We have already taken on the same development, testing, and evaluation standards as the headquarters in Japan,” says Otani. “We want to make the quality of development world-class as well.”
The company outlined advantages of developing locally, such as close-to-market feedback loops, cost reductions, abundant engineering talent and institutions and access to engineering service firms. Yamaha believes this setup can significantly boost its QDC (Quality, Delivery, Cost) metrics and help it deliver globally competitive products.
Multi-Fuel Vision
While peers like Hero MotoCorp, TVS, and Bajaj have already entered the EV race, Yamaha takes a more measured, performance-first approach. Otani confirmed Yamaha’s intention to launch EVs in India but declined to offer a timeline. However, he laid out two active areas of exploration: Developing an in-house localized EV platform and collaborating with River, a Bengaluru-based EV startup in which Yamaha and Toyota are investors. “We are actively developing models that contribute to reducing carbon emissions. This includes EVs, e-fuels, and hydrogen solutions,” says Otani. “We are not limiting ourselves to EVs alone; instead, we are exploring a multifuel approach.”
According to Otani, Yamaha is evaluating whether its investee company River’s performance-focused scooter platform can serve as the basis for Yamaha’s premium EVs. “We are assessing the feasibility of using River’s platform, but nothing is finalized. Performance means larger batteries, higher range, which comes at a cost, which remains a challenge in India,” he says.
Yamaha had introduced an EV in Europe in 2022, but Otani admits that replicating that success in India isn’t straightforward. “Electric two-wheelers still face constraints in price, range, and speed. Mass adoption is a challenge, and we want to enter with a differentiated, high performance product,” he adds.
Platform-Based Approach
Yamaha’s product development philosophy has evolved. Otani explains: “In the past, we designed products country by country, resulting in an extensive lineup. However, evolving regulations have created engineering complexities. We’ve adopted a platform-based approach— designing once and adapting across markets.” This shift enables Yamaha to balance compliance with efficiency, while addressing India’s unique consumer needs—where two-wheelers serve as both daily transport and lifestyle products.
Financial Performance and Market Growth
As the shift towards the premium end of the market started bearing fruit, it was clearly reflected in the company’s financials. The company files its annual earnings on a calendar year basis, as opposed to the fiscal year. As per last financial year’s data accessed by Autocar Professional, Yamaha India recorded a profit of Rs 697.51 crore in 2023, up from Rs 472.03 crore the previous year. Revenue rose nearly 7% year-on-year to Rs 9,671.43 crore, and total dispatches grew to 9.17 lakh units. Otani sees this as a sign of momentum. “With both motorcycles and scooters contributing to growth, India offers more promise than any other region,” he says.
Challenges and the Road Ahead
To meet the demands of developed markets, Yamaha India must adhere to global safety, emissions and quality standards. “Expanding to developed markets exposes us to stricter environmental and exterior quality expectations. However, achieving those standards also raises our competitiveness in India,” Yamaha’s global team noted at the investor meet. As Otani defines the EV and mid-size portfolio for India, Yamaha’s strategy becomes sharply focused: premium positioning, global ambition, and engineering excellence rooted in India.
This article first appeared on Autocar
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