Yamaha India signed a Memorandum of Understanding with the government of Tamil Nadu today approving the construction and operation of a new two-wheeler factory in the state. The facility will be in addition to Yamaha's Surajpur (UP) and Faridabad (Haryana) units to meet rising demand for two-wheelers in India.
The construction of the two-wheeler manufacturing unit is scheduled to begin in September 2012 at Vallam Vadagal, suburban Chennai. The factory which is expected to be functional from 2014 beginning will employ 1,800 people and have an annual two-wheeler production rate of 400,000 units at the start of operations.
Yamaha plans to increase production capacity in stages to a level of 1.8 million units annually by 2018, at which time employment is expected to reach 6,500 people. The forecast for the total investment in the new factory and facilities is approx. Rupees 1,500 Crores over the next five years.
Yamha India CEO & Manging Director Hiroyuki Suzuki commented on the development: “We are very pleased with this development as this is in line with YMC’s medium-term management plans of enhancing local production levels to meet the demand growth in emerging markets such as India and their export markets. The Indian two-wheeler industry has witnessed much growth in the last few years, attributable to increased disposable income levels among a rapidly expanding middle class. We expect the industry to attain 20 million units level by 2016 when we are targeting to sell 2 million units and achieve 10% market share.”
India is the world's second largest two-wheeler market in the world and Yamaha is planning to cash in on the market conditions. Currently, the motorcycle manufacturer sells a range of models among which the FZ-Series is the top selling motorcycle for the company.