Motorcycle maker Yamaha Motor India on Monday said it would invest Rs 400 crore (Rs 4,000 million) in the next three years and aimed to break even in 2005 besides phasing out the Rajdoot and RX135 models.
"We aim to break even next year on the sales of 375,000 units. We will also wipe out an accumulated loss of Rs 150 crore (Rs 1,500 million). By 2007, we aim to increase our market share by 20 per cent," Yamaha Motor India managing director and CEO H Yanagi said while launching 125cc motorcycle Fazer.
Yamaha, the fourth-biggest motorcycle maker in the country, has priced Fazer at Rs 43,990 (ex-showroom, Delhi).
The company will phase out two motorcycles RX135 and Rajdoot in the next six months.
Sales of the wholly-owned subsidiary of Japanese motorcycle major Yamaha Heavy Industries had dipped 23 per cent at 250,000 units in 2003.
"India is the only major market in the world where we are not among the top two motorcycle makers. Being a fourth player is difficult to digest," executive vice-president A V Srinivasan said.
In the first six months this year, the company sold 120,000 units, including 10,000 in exports. Yamaha manufactures motorcycles like Crux and Libero.
Initially, Yamaha expects Fazer sales at around 6,000-8,000 units, which will go up to 20,000-25,000 units gradually.
Yamaha sales is expected to touch 300,000 units this year on a sales turnover of Rs 1,000 crore (Rs 10 billion).
To streamline operations, it is also looking at further reducing manpower, especially of those working on the platforms of two-stroke bikes. "Currently, we have 2,400 employees and hope to trim it to 2,000 in the next year. The outgo through this is expected to be Rs 50 crore (Rs 500 million)," Srinivasan said.
The company is also looking at introducing scooters in the Indian market as well as bringing in high-powered bikes as completely built unit imports.
"The scooters' project is currently under study while for high-power bike imports, we are waiting for the duties to come down by 2007 in line with the WTO stipulations," he said.
The company will invest Rs 400 crore spread over a three-year period. "The fund would be used for marketing, brand building as well as infusing more equity to reduce bank borrowing. Also, further investments will be made for new product development," he added.
The company also exports components from India and this year, these are expected to contribute about $20 million.
The self-start and disc brake variants of the new motorcycle Fazer will be available by October this year.