Escorts Yamaha

1615 Words Oct 19th, 2011 7 Pages
Escorts - Yamaha Motors parting ways

ABSTRACT
The case traces the various developments from the time the joint venture took place till the breakup in 2000.Starting from1995, how the 50:50 joint venture (EYML) moved to Escorts divesting 24% equity to Yamaha Motors in mid 2000 making Yamaha Motors a majority stakeholder in the venture (74:26) to Escorts pulling out of the joint venture. Then Yamaha setting up a joint venture with Mitsui and Co. to produce motorcycles in India with the new venture called India Yamaha Motor Pvt. Ltd. The case also discusses whether the new JV is really a solution to Yamaha’s problems (failure) in India and what were the actual problems with both the companies

Keywords
Escorts, Yamaha Motors, Mitsui and Co.,
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At the time, two-wheeler market in India included scooters, motorcycles and mopeds. Motorcycles consistently gained market share from the scooter and the moped. The trend was expected to continue in 2001-02. Bajaj Auto and LML dominated the scooter market. Northern India was the major market accounting for nearly 46% of the total scooter sales.
The Indian motorcycle market could be broadly categorized into Indian motorcycles and Indo-Japanese motorcycles. The Hero group, Bajaj and Escorts dominated the Indo-Japanese motorcycle segment in collaboration with Japanese vehicle manufacturers Honda, Kawasaki and Yamaha respectively.
In 2000, the market for motorcycles was segmented into three categories based on price: the premium segment (45,000 and above); the mid segment (Rs 40,001-45,000); and the entry segment.(upto Rs 40,000)
The main competition was between TVS Suzuki, Hero Honda and Escorts Yamaha Motors in the premium segment. In the mid segment, Hero Honda was the clear leader with 35% share. In the entry segment, Bajaj Auto was the choice of many . Yamaha Motors was a major competitor in the premium segment, but after the break up with Escorts in May 2001, there was no sign of rejuvenation. The Indian market favoured four-stroke vehicles. This posed a problem for Yamaha Motors, whose strength was two stroke vehicles. TVS-Suzuki was not very aggressive as far as new launches were concerned. Between 1992, when the Samurai

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