YAMAHA INDIA

Struggling to make a mark in the Indian market, Japanese two-wheeler major Yamaha on Wednesday said it will replace its existing venture by a joint-venture with compatriot Mitsui & Co.

The joint venture, to be named India Yamaha Motor Private Limited (IYM), would take over the existing manufacturing and business operations of Yamaha Motor India Private (YMI) Ltd starting April, the company said in a statement.

Yamaha, which has so far invested Rs 1600 crore in the Indian operations, said it planned to eventually take it up to Rs 5600 crore to strengthen its position.

After the restructuring, the company said, in the first year of operations (nine months period starting April 2008) it expects sales worth Rs 1000 crore.

Mitsui, which had last year acquired three per cent stake in Yamaha, will pick up 30 per cent stake in the IYM, it added.

"In this way, IYM will increase its total capital to a planned Rs 5600 crore (approximately 14.6 billion yen) and utilise the same factory and office facilities used by its predecessor, YMI, to take over YMI's manufacturing and business operations beginning from April," it added.

Based on this, YMI would promptly begin the closing of its books and corporate liquidation, it said. When contacted about the possible changes due to the new development, a YMI spokesperson said: "It will be business as usual for the employees and business partners of YMI."

Yamaha currently employs about 2000 employees in India.

Last year the Japanese bike major and Mitsui had agreed to review possibilities for the latter's participation in various areas of YMC's business activities and strength in overseas business and cooperative ventures in other areas of business.

"The decision announced on Wednesday is a result of these reviews and repeated discussions with a focus on a "comprehensive joint business venture in India," the statement said.

Yamaha had entered into a joint venture with the Escorts Group in 1996 for manufacturing motorcycles in India. Since 2001, the company has been operated as the 100 per cent YMC-owned subsidiary.

In 2005, a separate sales company, Yamaha Motor India Sales Private Limited, was established, after which the Yamaha motorcycle business in India was conducted by two Companies specialising in manufacturing and marketing respectively.