CHENNAI: Yamaha Motor India is evaluating capacity expansion as its existing manufacturing capacity of around 1.5 million vehicles is expected to be fully utilised within the next two to three years, even as the Japanese two-wheeler maker seeks to sharpen its focus on India as both a domestic growth market and a global export base.
“We have a production capability of up to 1.5 million. My feeling is that within two or three years, this capacity is going to be fulfilled. In that case, we have to start something for the expansion of the plants,” Yamaha Motor India Group chairman Hajime Aota said here on Thursday.
The company, which operates manufacturing facilities in Chennai and Surajpur in Uttar Pradesh, is weighing whether to expand within its existing premises or consider investments at another location.
Aota said Yamaha had space available at its Chennai facility, to add capacity through further investment in manufacturing processes before committing to a new plant. Yamaha has already completed a second engine manufacturing line in Chennai this year. The location, he said, was originally chosen largely for export competitiveness, but factors such as freight corridors, labour costs and automation are now being evaluated in deciding the future manufacturing footprint.
The company has around 10,000 employees in India and is also looking to improve productivity by training workers to handle multiple functions rather than limiting them to a single job.
Aota, who has spent 237 days in his current role, acknowledged that Yamaha’s market share in India remains low at around 3.7%, despite improving from about 3.3% last year. However, he said the company was focused on the premium segment rather than chasing overall two-wheeler market share.
Yamaha is also positioning India as a potential global development and export hub. Its domestic-to-export mix is currently around 70:30, with Japan, Europe and Taiwan among the developed markets being targeted for exports of products developed in India.
The YZF-R2, positioned as a new 200 cc offering in Yamaha’s R-series, has been launched at Rs 2,30,500 (ex-showroom Delhi) for the standard variant. The quick-shifter variant is priced at Rs 2,39,500, while the range-topping R2 M comes at Rs 2,53,000. Yamaha is targeting an annual volume of around 50,000 units for the R2, with the initial focus on the domestic market.
Aota said Yamaha had invested more than Rs 2,000 crore in India over the last eight to 10 years in R&D and manufacturing.
On electric mobility, he said Yamaha was assessing a more aggressive strategy, but battery supply chains, imported raw materials and profitability remained challenges. The company is also studying clutch-based regenerative technology following its investment in a French electric vehicle technology company. For the latter half of 2026, Yamaha expects sales to be stronger than in the first half, though rising raw material costs, particularly aluminium, could put pressure on profitability and pricing.