July 2021

India

Contributed by Mr Haresh Haswani & Mr Rajesh Malik, Metal Products Dept, SCIN New Delhi

 

SCIN has been engaged in business with India Yamaha for just in time (JIT) supplies for two product lines – stainless steel and electro-galvanised sheets. Both items have to be stocked and supplied in cut-to-length form which has allowed a decent “Value Add” to otherwise standalone JIT business.

 

Yamaha has 2 plants in India. The 1^st plant is in Surajpur in North India which was established in 1985 and the 2^nd plant is in Chennai in South India which was established in 2015. Overall, Yamaha business volumes for Chennai plant showed increase in the last few years, as they have shifted 100% of scooter production to Chennai plant from their Surajpur plant. Currently, Yamaha Chennai plant is contributing 60% of total production of 2 plants in India, which was previously 40-45% in 2015-16.

 

SCIN has been supplying stainless steel sheets to India Yamaha’s tier-1 vendors since 2016 and electro-galvanized (EG) one side Zinc-Nickel coated steel sheets since 2018. Stainless steel sheets are used for production of muffler/exhaust system and EG steel sheets are used for production of fuel tank of both scooters and motorcycles.

 

Vendor and Customer Details          

Material Type	Stainless Steel	EG Zn-Ni Coated Steel
Raw Material Supplier	Jindal Stainless Ltd, India	Nippon Steel Corp, Japan
Processing Centre (India)	SMPC, Chennai	POS Hyundai, Chennai
SCIN Customer	Sakura Auto Parts, Chennai	1)      Prabha Auto Parts 2)      Thai Summit Auto 3)      Minami Metals
End User	India Yamaha Motors	India Yamaha Motors

 

JIT business, although may appear simple in nature, is not easy to manage seamlessly and needs to ensure that the customer line does not stop due to running out of raw material. It requires meticulous planning of mother coil and finished goods inventories and execution of supplies considering external factors like collection of payments, transport conditions and other factors. If not planned and executed with highest efficiency, it can lead to excess/low inventory and implications on the profitability of the business.

 

Due to COVID-19, Yamaha production/sales volumes has dropped by 30-35% for Chennai plant.

In year 2020, Yamaha has produced 402k nos. of vehicles against the budget of 637k. In year 2021, Yamaha production/ Sales (actual + forecast) reduced to 471k nos. of vehicles against the budget of 716k.

 

Despite the current situation, Japanese automotive major Yamaha Motor Company is working on introducing multiple products in the premium motorcycle and scooter segments, as well as to increase more than double its share in the local two-wheeler market over the next five years in India. India’s annual production of two-wheeler is approximately 22-25 million. Yamaha, which currently has a market share of 3.7%, is looking at bolstering its presence in the 125cc, 150cc and 250cc motorcycle segments to draw in younger generation customers. Overall, the aim is to increase market share to 8.7% by 2025. SCIN looks forward to be a part of Yamaha’s expansion plan.