The Most Interesting Slide from Yamaha’s Three-Year Plan

12/18/2012 @ 10:52 am, by Jensen Beeler8 COMMENTS

The Most Interesting Slide from Yamahas Three Year Plan Yamaha Market Growth 635x440

Announcing today its “New Medium-term Management Plan” that will cover the next three years of business operations, Yamaha Motor Co.’s strategy is fairly simple, yet also very ambitious. While fighting against the global currency exchange rate with the yen, the Japanese company is hoping to release over 250 new units over its various product segments.

While this goal encompasses all of Yamaha Motors’ product lines, the most obvious additions for the motorcycle division will be Yamaha’s recently announced three-cylinder motorcycles, as well as the now confirmed Yamaha YZF-R250, a 250cc sport bike that will debut in the Indian market.

Unless you have an MBA, Yamaha’s three-year business strategy is a pretty dull read (it might still be a snoozer, even if you do have an MBA), but one Powerpoint slide struck me as interesting (you can see the full presentation here).

Outlining the growth potential of various motorcycle markets, Yamaha shows some interesting forecasting and insight into the state of the motorcycle industry, from a market perspective. Plotting GDP/capita on the x-axis, one can presume that as a market travels farther down the axis, that its willingness to purchase higher margin machines increases.

Meanwhile, plotting the penetration rate on the y-axis, Yamaha shows its ability to sell to the available motorcycle market in those regions. An increase in penetration means more units sold, and more market share gained in that region.

So in markets like India and China, where the total volume of bikes sold across all brands reaches well into the millions, a penetration rate of under 10% means Yamaha is selling only a relatively small amount of its potential in those regions.

By putting both of these metrics together, we get an interesting perspective on the margin vs. volume balancing act that occurs with manufacturers. Also of note, the box around Europe and the USA shows that Yamaha does not foresee any meaningful change in either volume or margin.

So without looking at the whole plan, which countries do you think a company like Yamaha is going to focus on for its market revival in the next three years?

Source: Yamaha

Comment:

  1. gwilo says:

    Every Yamaha dealer I have spoken to in Canada want a 250cc sport bike like the YRF or something to compete with the Ninja or CBR 250.

  2. Kevin says:

    This is wonderful news for us here in South East Asia! Thank you for reporting this!

  3. Marc F says:

    I think you’re misinterpreting – that’s not Yamaha’s market penetration, that’s motorcycle/scooter (which is maybe ownership per adult?).

  4. Why Asia is a big deal for motorcycle racing MT @Asphalt_Rubber: The Most Interesting Slide from Yamaha's 3-Year Plan – http://t.co/48hWmEoq

  5. Random says:

    Yamaha seems to be following Honda’s lead, using platforms that could be adapted into different models (CB 500 F/ CBR 500 R / CB 500 X) and centralizing production in south-asian contries. If it means people in different countries could get the bikes they want for an affordable price, it seems ok to me.

  6. Paul McMenamin says:

    Interesting chart. I would like to see it augmented with average price per sale figures. At first I thought that it was amazing that Italy was at 15% market penetration, while the USA was way down at 3% or so. But then one has to consider the absolute size of the market and the profit margin per unit. Even if Italy is at 15% the USA may be a better market if Italians are buying cheap scooters and Americans are buying high-margin cruisers and FJRs.

    But any way you slice it, it does seem like Asia, India, and South America are the big potential sales growth areas. The 30% figure for Taiwan is pretty amazing. Doubt how that could get higher as a percentage, but then again, if the Taiwanese GDP per capita grows, maybe you can sell more expensive machines in Taiwan.

  7. RT @Asphalt_Rubber: The Most Interesting Slide from Yamaha's Three-Year Plan http://t.co/7AQXZm0N

  8. Gutterslob says:

    Yamaha have been pushing for a GP in Indonesia for a couple of years now, plus they seem to have Indonesian sponsorship of some sort on their M1 (semakin de depan). I’d say Indonesia would be their prime target market, especially considering many of the islands in the archipelago are seeing considerable growth. Vietnam too seems a good prospect, but I suspect the Chinese manufacturers might give em more serious competition there.

    Most lucrative in terms of potential volume would be Brazil, me thinks. Though I have no idea what the South American markets are like right now.