Yamaha Motor Escorts pumps in fresh investment
By Venkatachari Jagannathan | 08 Jan 2001
The New Delhi-based motorcycle manufacturer, Yamaha Motor Escorts (formerly Escorts Yamaha Motors), has drawn up plans to invest Rs. 200 crore over next two years to shore up its lean product portfolio. The company's plants are located at Faridabad and Surajpur near Delhi.
According to Mr. S.K Taneja, executive director, the company plans to introduce at least one new model/variant every year so that a `Yamaha' bike is present in all the market segments. The additional investment will increase the company's manufacturing capacity to 5 lakh bikes a year. "The funding will be a mix of internal accruals, fresh equity infusion and loans," he said.
It may be recalled that the Yamaha Motor Company had increased its equity stake in the Indian outfit recently from 50 per cent to 74 per cent. The balance is with Escorts group. "The rationale behind the hike in the stake is that the technology partner should be in control of the company's day -to-day activities," said Mr. Taneja.
All these years, Yamaha Motor Escorts was only operating in the power bike segment while new entrants like Hero Honda stormed the market with its fuel economy bikes. The other major players, TVS Suzuki and Bajaj Auto, gained market share with their sleek, sturdy and economy models.
The new emission norms also had an impact on the company as it took sometime to roll out bikes conforming to the new norms. The company recently stopped the production of `Yamaha RX 135' model, Mr.Taneja said.
"Four years ago, the power and fuel economy segment shared the market equally. Nobody expected the fuel economy bikes' segment to grow like it did. It is against the global trend," Mr. Taneja reasoned to the Chennai press corps at the launch function of the company's economy model, `Crux'.
"With `Crux', we are now present in the fuel economy segment," he added. Priced at Rs. 40,640, the company's new offering has a 7.6 bhp, 106cc engine with 4-speed gearbox. According to officials, it will give 65 kms/litre of petrol.
New models and additional funding plans apart, Yamaha Motor Escorts is now in the process of rationalising its vendor base from 250 to 200. "We don't have any plans to increase our distribution network. On the other hand, non-performers will be weaned out," Mr.Taneja said.