Yamaha will soon replace its money-losing Indian motorcycle business with the new venture called India Yamaha Motor (IYM). Unlike the Yamaha Motor India which is a 100% subsidiary of Yamaha MotorCycles (YMC), this new India Yamaha Motor is a joint venture between Yamaha Motors and Mitsui Corp. Mitsui’s investment will take the form of an allocation of new stock shares to a third party issued by IYM for the equivalent of 30% of the company’s capitalization. In this way, IYM will increase its total capital to a planned 5.6 billion rupee (approx. 16 billion yen) and utilize the same factory and office facilities used by its predecessor, India Yamaha Motor will kickstart its operations in April and Yamaha will invest 174 million dollar in the next three years in this JV. “The reason for dissolving the old unit is because it has had loses since at least 2001,” said Yamaha spokesman Takashi Kitagawa. “The company will rebuild the unit with help of Mitsui.”
Yamaha Motorcycles started manufacturing of motorcycles in India by establishing a joint venture company with local partner Escorts in 1996. In 2001, Yamaha Motors India became a 100% owned subsidiary of YMC. Then 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 specializing in manufacturing and marketing respectively.