Yamaha sees strong runway in India’s EV market despite delayed debut

Japanese bikemaker Yamaha has finally announced its intention to join the electric vehicle bandwagon in India, with two new scooters set to launch in 2026.

The Aerox E and EC-06 will have to reckon with the realities of a competitive landscape where legacy players like Bajaj Auto and TVS Motor Company are at the top of the list, along with Ather, Hero, Ola, and many others, including Honda. Yet, Itaru Otani, Chairman, Yamaha Motor India Group, is not deterred.

The Indian electric vehicle market, according to him, is “a kind of a commodity market” where the ₹1 lakh price point is the pivot for attracting customers.

“Our strategy is one of differentiation and our DNA of sporty, stylish and excitement will accompany our EVs. Customers who understand the Yamaha character will be the ones targeted for our offerings,” he said.

According to the parent company in Japan, the Aerox E is one of Yamaha’s high-value-added models, developed in line with its premium-segment strategy for the ASEAN region and other emerging markets.

Premium brand image

The petrol-powered Aerox 155 has already been well received in the Indian market, and its new electric sibling delivers that “same signature Yamaha sporty ride and stylish exterior design”. By launching this model, the company aims to establish a premium brand image in India’s EV market.The EC-06 electric scooter, on the other hand, is based on a production model from Bengaluru-based startup River and was developed to appeal to a broader range of customers. It features a “stylish and cool” exterior design theme, fitting customers leading an active daily lifestyle. River Mobility will handle the production of the EC-06.

In January 2024, Yamaha Motor invested in River and has since been exploring opportunities to collaborate with the company on EVs in the Indian market. The EC-06 is the first product to emerge from this alliance, the parent company has stated.

“We collaborated with River and learnt many engineering points in the EV areas. Yamaha, on the other hand, has a long history with producing motorcycles. As I said, we would not like to compete directly with Indian OEMs that have already introduced EVs but will look at niche segments akin to our premium strategy in the ICE (internal combustion engine) category,” explained Otani.

Product blitzkrieg ahead

It is in this premium space that Yamaha will strive to increase its share from the current 17 per cent to 25 per cent by the end of this decade. The company has planned 10 products, including its electric scooters, for now through the end of 2026, with more to follow in subsequent years.Its plant capacity in India is 1.5 million units, of which one million units are being used, which means there is enough “space to grow and meet the needs of the younger generation”, that is its key buyer base. The electric scooters produced in India could also be shipped to ASEAN countries, so long as there is sufficient demand in countries like Vietnam, Malaysia, Taiwan, and the Philippines.

Beyond this, said Otani, each country has its own set of regulations and would like to expand its locally produced battery businesses. They are not likely to accept batteries from outside, especially from ASEAN regions.

“Therefore, we have to watch each country’s regulation carefully. But if we have a chance, of course, we would like to expand the EV business,” he added. Earlier this year, Yamaha Japan established a specialised EV department to focus on business development in specific product categories.

“They are also watching global demand and will allocate (products) to the best countries for production and the best where demand is growing. They constantly watch the balance happening and try to use Yamaha resources in each country to maximise the EV business,” elaborated Otani.

Bullish on India’s middle class

He was hopeful that demand for premium scooters and motorcycles would grow in India, given the rising affluence of the middle class. “From my point of view, this is just the start of a new journey for us,” he said.

Yamaha Motor in Japan has also been toying with the idea of making India its export hub for shipping out premium motorcycles and scooters to advanced markets like Europe, the US and even Japan. The idea is to become the second biggest export hub factory for the parent company by 2030.

There is no indication of how far this plan has progressed, even as the Indian arm has been shipping motorcycles and scooters to many countries in Africa, South America, and parts of ASEAN. Europe was a major step forward for the Ray ZR scooter, and it will be interesting to see whether Japan and the US are added to the list.

The earlier thinking was to produce smaller-capacity bike engines in India and export them to advanced countries. This would have meant paying greater attention to quality since these markets demand the best. At present, Indonesia is the parent company’s largest export hub, serving over 100 countries.

Challenges & opportunities in India

In a recent Q&A session with analysts in Japan after its third-quarter results for this calendar year, Yamaha leadership stated that demand was growing significantly in India, even amid a mix of challenges and opportunities.

“Since the beginning of the year, financing approval rates in India have fallen against the backdrop of the country’s economic situation, and we were put on the defensive by our competitors. Considering the impact of GST and the festival season in October, we want to broaden our scope of target customers while expanding sales,” said the top management.

It added that the core premium segment strategy remained unchanged, and Yamaha would continue to push market penetration of high-profit models in India into the next fiscal year and beyond.

Globally, the motorcycle business was doing well, driven by strong performance in Indonesia, Thailand, and the Philippines, as well as recoveries in Brazil and India.

“However, with the risks afoot, such as the full brunt of tariffs, rare earth procurement trends, and flooding in Vietnam, we need to carefully assess our business results forecast for the full year going forward,” cautioned the management.