Date:19/08/2005 URL: http://www.thehindubusinessline.com/2005/08/19/stories/2005081902680200.htm

Back Yamaha plans second wholly-owned subsidiary — To trade in two-wheelers and parts

Neha Kaushik
Ambarish Mukherjee

New Delhi , Aug. 18

JAPANESE automotive major, Yamaha Motor Company is planning to set up a second wholly owned subsidiary in India.

The new subsidiary would co-exist with its current Indian subsidiary, Yamaha Motor India, and would engage in trading of two wheelers and parts manufactured by Yamaha Motor India.

It will also engage in trading of two wheelers and products from Yamaha's global portfolio, which are currently not available in India.

According to industry analysts, the establishment of the new subsidiary could be aimed at facilitating the launch of scooters in the Indian market.

Yamaha has been conducting a feasibility study for rolling out scooters in India, which in the initial stages are likely to be imported from the company's plant in Thailand.

The company in recent months has also hinted at the possibility of importing premium, high-powered motorcycles into India.

The company's proposed subsidiary in India has also received permission from the Foreign Investment Promotion Board (FIPB) to engage in trading of other products including all-terrain vehicles, generators, multi-purpose engines, water pumps, electric hybrid bicycles, racing karts, and golf cars among other products manufactured by Yamaha Group companies outside India.

After the establishment of the new subsidiary, Yamaha Motor India would focus on the manufacturing activities and exports of two wheelers and parts, while the proposed subsidiary would look at the marketing and distribution aspect.

The proposed subsidiary would be 99.99 per cent owned by Yamaha Motor Company, Japan, while Yamaha Motor Asia Pacific will have a stake of 0.01 per cent.

Yamaha recently announced an aggressive strategy to grow its market share in the Indian market, which includes a fresh brand identity and an increased thrust on new product introductions.

The company's sales had declined in the last fiscal year to 2,12,985 units from 2,13,767 units in the previous year.

Yamaha has also said it plans to invest about Rs 400 crore towards building a third plant and expanding capacity at its existing unit in India.

The new plant is likely to manufacture bikes targeted at the export market.

The division of Yamaha's India operations in to two (manufacturing/export and trading) would enable it to increase focus on these core areas.