In a bid to expand and penetrate, in the Indian market, with more intensity than ever before, the Japanese bike manufacturer, Yamaha is mulling upon operating with Mahindra Two-Wheelers in the form of a “holistic business partnership.”
The association between the two giant automobile makers could involve manufacturing and marketing tie-up. Moreover, it would assist the Japanese bike maker to compete more effectively and efficiently against close rivals, Honda and Suzuki in India, sources confirm.
If everything heads as per plans, Mahindra Two-Wheelers is expected to support Yamaha in earning unprecedented laurels in the major, 100 cc to 125 cc, domestic biking segment, in order to reiterate its 150 cc segment performance. The Japanese major is likely to make use of low-cost manufacturing strategies and Mahindra's dominance and brand loyalty in the rapidly growing Two-wheeler market. On the other hand, Mahindra will have access to Yamaha's unmatched technological know-how in Two-wheelers.
“There were comprehensive discussions going on …. They (Yamaha) wanted many things. They're looking at a holistic business partnership, which includes marketing and manufacturing,” a inside source said. “Yamaha is a complicated organisation with many investors, so this is not a straightforward matter. Nothing has been finalised yet … the talks have not reached the investment stage,” he added.
Another source, closely related to the venture, said that developments have gained momentum, and Mahindra would possibly revive its strategies following the technical problems that cropped up in its sole bike model, Stallio last year. A tie-up may bring out a technology or a licensing agreement between the two makers.
In April, it was reported that Yamaha was in search of a strategic partner in India, in order to enter the mass domestic motorbike segment that is 100 cc to 125 cc, with much aplomb. This segment accounts for over 70 per cent of the bikes sold in the country.
The Japanese bike maker had then roped in around five merchant bankers, in order to draft out a perfect model for such a strategy. A technological tie-up and a production tie-up for low-cost manufacturing were among the primary suggestions. In addition, a strategic stake sale by Yamaha to the partner, as part of an agreement on technology and production, found a place in the first three approaches.
Thus, both Yamaha and Mahindra are looking forward to the association, wherein the auto manufactures would make an effort to transform every underdeveloped area, within the system, into a developed one.
