YA M A H A
YAMAHA SOUTH AFRICA
Quality Without Question Driving ‘Kando’ in SA PRODUCTION: Karl Pietersen
Yamaha South Africa distributes industry-leading products to customers across the southern African region. New Managing Director, Robin Van Rensburg is keen to accelerate the company’s progress as he looks to reinstate brand recognition and position Yamaha at the top of the pile in all sectors it competes in. 2 / www.enterprise-africa.net
Š Yamaha Motor Europe N.V.
INDUSTRY FOCUS: AUTOMOTIVE
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In Hamamatsu, Japan in 1887, while Paul Kruger was still the state President of the South African Republic, Torakusu Yamaha was busy establishing his business, manufacturing musical instruments, specifically pianos and reed organs. The company was incorporated in 1897 and Yamaha went on to become what we know today as one of the world’s most recognisable brands with almost 30,000 employees worldwide and an enviable product range including instruments, audio equipment, power products, motors, engines, motorcycles, golf cars, ATVs, and more. Today, the company’s famous logo still reminds of its beginnings, picturing three interlocking musical tuning forks. Yamaha products have been imported into South Africa for decades and, especially in motorcycles and marine, the company has carved out a niche in the top end of the market, targeting the premium space and customers looking for products of the finest quality.
© Yamaha Motor Europe N.V.
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But, with such superior products across such a range of sectors, Yamaha’s core message of delivering quality and ‘the performance of your life’ has fallen to the wayside somewhat, and competitors in the markets it operates in are looking to capitalise. Enter Robin Van Rensburg. This auto-industry veteran has spent time with some of the country’s biggest international brands including Fiat Chrysler Automobiles, Jaguar Land Rover and BMW. Appointed as Yamaha South Africa’s Managing Director in October 2018, he has quickly gone about reestablishing the company’s impressive brand recognition by focussing on service delivery excellence. “It’s been interesting,” he tells Enterprise Africa. “The first experience was learning the variety of products as that is the big difference compared to the other brands that I’ve worked with. From road bikes to marine to music to golf cars – they’re all very different but intrinsically they stay true to Yamaha’s core values of quality. “It’s been something of a baptism of fire as there is still a lot of work that needs to be done in re-establishing and reminding the market of just how good the brand is. On the service side, our dealer network was not up to the standard expected of Yamaha dealers. Particularly in the rest of Africa – I look after the region from Mozambique Botswana, Namibia and Zambia – and we haven’t really done a good job of making sure those markets have a great service from Yamaha and so that will be the focus going forward.” He highlights supremacy of the product range combined with world-class customer service as the two irreplaceable ingredients in a recipe for success.
// THERE IS STILL A LOT OF WORK THAT NEEDS TO BE DONE IN RE-ESTABLISHING AND REMINDING THE MARKET OF JUST HOW GOOD THE BRAND IS // “Without doubt, Yamaha has extremely strong brand recognition, even stronger than some of the international auto brands in the country. It’s probably right up there with the BMWs in terms of recognition as a brand. In terms of recognition in the premium space, that is where we need to do work because that is where we operate - our pricing is very relative to that sector. Take BMW for example, a company also in the motorcycle space – our products can be more expensive than a BMW bike, so we have a lot of work to do to remind people of the brand. There are two elements to being premium: First is quality and reliability and then there’s the customer experience that goes with buying a premium product, and that is very important.” NEW PRODUCTS Yamaha has recently introduced two exciting new products to the market for its South African customers. In the motorcycle and marine sectors, it has a new bike and a new outboard power engine which are top-of-the-range items and which will redefine standards in their industries. “We’ve recently launched the Ténéré 700 internationally (the South African launch is expected towards the end of 2019) which is an adventure bike for a market where we do not complete well right now,” details Van Rensburg. “That market is dominated by BMW and KTM and we haven’t had a strong product to compete in that space. Up until now, adventure bikes have been big 1200cc bikes which is great for a
YAMAHA SOUTH AFRICA
road bike as it is very smooth but as soon as you go on anything other than tar, it’s heavy and can become a handful, especially for inexperienced riders. So, an adventure bike with a smaller engine certainly has the potential to take market share.” The Ténéré 700 has a 698cc, 2-cylinder, 4-stroke liquid cooled engine. It is designed for longer journeys with both on and off-road capabilities. Yamaha says it gives riders a new sense of total freedom thanks to its ability to redefine boundaries. “On the marine side” says Van Rensburg, “we’ve just launched our big 425 horse power motor which plays in the top echelon of the market and has taken off very nicely. The big thing now is to right-size our dealer footprint. We have had too many dealers and too many of them have been doing an
average job so what we want to do is put the right partners in place in the right areas which might mean having less dealers but doing a much stronger job from a customer service point of view. We believe that we can have the right dealer network, with the right customer experience, with new products coming to us, and we certainly believe that will allow us to grow. “In terms of revenue and potential for growth, motorcycles and marine are two key product areas for us. Our music business does really well on both audio and musical instrument sides but, in terms of room for growth, it’s not as big as marine or motorcycle,” he adds. In each segment that Yamaha plays, there is room for significant growth and Van Rensburg is very keen to use firstclass service to build on the presence the brand already enjoys.
“We are market leaders in the marine business with 56% of the market for outboard motors. We are the market leader in personal water craft or wave runners. Our objective is to continue dominating in these sectors and to take further market share from our competitors. In the motorcycle business, we want to get back to the top in what we call the 500c and above road bike sector. We are very strong in off-road Enduro-type bikes and we will keep our position there. We want to grow our market share in the adventure bike segment with the Ténéré 700 and we believe we can also lead in the below 500cc road market. We also want to lead in golf carts where we remain the industry leader. Also, in the musical instrument business, we are the market leader and we intend to hold our position there,” he says.
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// WE BELIEVE THAT WE CAN HAVE THE RIGHT DEALER NETWORK, WITH THE RIGHT CUSTOMER EXPERIENCE, WITH NEW PRODUCTS COMING TO US, AND WE CERTAINLY BELIEVE THAT WILL ALLOW US TO GROW //
© Yamaha Motor Europe N.V.
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CHALLENGES & SOLUTIONS Yamaha is also active in the power equipment and pro-audio sectors where products including lawnmowers, generators, water pumps, mixers, processors, power amplifiers and speakers are distributed through some of the country’s leading retailers and dealers. But, compared to marine and motorcycle, these sectors are much more challenging because of price sensitivity in the market. “Power equipment is a very tough sector,” admits Van Rensburg. “It is very difficult to differentiate the engines. We make a quality engine but that comes at a price and a lot of guys that are buying those engines for lawnmowers or generators aren’t necessarily looking for top-quality, they are looking for the best price. The audio business is also tough, simply because with modern music streaming, high-quality sound is not something that people strive for anymore. So, to differentiate our products against others in the market is very difficult.” In that sector, Yamaha is looking to maintain its position as a premium product, being very selective of the retailers it goes through, but most importantly, working hard with the online channels. “In both musical instruments and audio equipment, we went on to Takealot.com and we had a reasonable first month, but I certainly believe that is something which will grow as people explore our range online and look for the good value,” says Van Rensburg. For Yamaha across southern Africa, Van Rensburg is clear that his ambition is to unlock the potential of the entire region, but not going too fast and not doing things in an unsustainable manner are also very important in the Yamaha strategy. Perfecting operations in one country at a time is how the brand will develop, starting with Mozambique. “We think there is significant potential particularly with the marine business,” explains Van Rensburg.
YAMAHA SOUTH AFRICA
“They have a massive coast line and they have big fishing businesses. On the leisure side, many tourists travel to Mozambique and ride quad bikes on the beach during adventure breaks, so we believe we can do a much better job there on the marine and bike side. The next priority is Zambia where the marine business is not as big as Mozambique but there is still a big fishing and luxury market, certainly on the motorcycle side. When we get those going right, we will expand further north.” POWERFUL POSITION TO GROW Operating at the top end of the market is a difficult thing to do in South Africa right now. On the one hand, your customers are the wealthy, where there is not a shortage of disposable income. But on the other, the uncertain economic climate and slow GDP growth rates have knocked confidence and some people and businesses have been holding onto money for longer than usual, considering their investments much more carefully before purchasing. In February, the National Treasury announced that GDP growth was less than 1% in 2018 and will not reach more than 1.5% in 2019. This backdrop has resulted in a conservative approach to spending. “We have seen that over the last
Fourways Crossing Shopping Centre, William Nicol Drive , Fourways www.digitalexperience.co.za
From all at The Digital Experience, Congratulations to Robin van Rensburg on your appointment as Managing Director of Tuning Fork (Pty) Ltd. We look forward to building our relationship with you and growing our successful partnership.
four years,” comments Van Rensburg. But he remains upbeat about the future, stating that in the longer-term, the growth potential in the region cannot
be ignored and there are positive signs for business. “There does seem to be an underlying confidence that postelections in May, we will have a leader that has common sense and, globally, there seems to be a belief that South Africa is the key to Africa. As long as the outcome of the elections in May is predictable, I certainly think we will see the market climb. What we know, according to our data, is that there is cash around but people are just not spending it. “Having said that, we are already seeing an upturn. Our sales for the first two months were encouraging – people were starting to spend which is good news. Certainly, in the segment we play in, people have the money, it’s just about giving them the confidence to make their investments.”
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This confidence will be important going forward as the two major stakeholders in Yamaha’s South African operation - Japan’s Yamaha Corporation and South Africa’s Bidvest – expect two things: “Profit and a return on capital” says Van Rensburg. But, especially from Japan, strategy guidance is minimal and reasonably ‘hands off’ which gives Van Rensburg and the management team
// OUR SALES FOR THE FIRST TWO MONTHS WERE ENCOURAGING – PEOPLE WERE STARTING TO SPEND WHICH IS GOOD NEWS // 8 / www.enterprise-africa.net
on the ground in Johannesburg the opportunity to develop a local plan, suitable for the local conditions. “I have a lot more freedom than I’ve had before,” he says. “All they want to know is that the brand is well represented and we are growing our market share. Of course, there are certain things that Japan drives, specifically skills. We are on the same page with that as one of the challenges with our business is technical skills. Working with motors and engines is not a job that everybody coming out of school aspires to do. Youth unemployment here is at 60% so we are on a big drive to get into the technical colleges and get people into apprenticeships so that we start to get skills back in to the business as we need those skills to deliver the Yamaha promise of quality.”
KANDO South Africa’s auto-manufacturing sector is impressive, and remains a vital cog in the economic engine. But Yamaha is happy to continue importing and does not have plans to move into the local manufacturing sector across any of its product lines. The only situation which could result in a change of strategy is if the country’s boatbuilding sector continues to decrease. “We sell outboard motors but without boats there is nothing to put a motor on,” says Van Rensburg. “The boatbuilding industry is really struggling, and a lot of the companies have disappeared. Yamaha has recognised this as an issue for Africa and we are looking at what could be possible if we can guarantee some kind of supply, but nothing is concrete yet. The benefit for us would be getting
YAMAHA SOUTH AFRICA
© Yamaha Motor Europe N.V.
© Yamaha Motor Europe N.V.
// WE ARE NOT EVEN CLOSE TO OUR POTENTIAL YET // boats to sell as we are running out of boats to put outboard motors on and that is a risk.” The other long-term risk for the company in South Africa is the global switch from combustion engines to electric motors. Here, Van Rensburg is sceptical about the shorter-term, saying: “South Africa still struggles to power its houses never mind a whole nation of electric vehicles.” However, he does admit that there could be a market for certain electric products in South Africa. “They are experimenting and there is work happening on an electric scooter which I think would do very well here.
We have a lot of fast food deliveries and they always return to a central point without driving a huge distance – if you have an electric scooter, it would take away big running costs and, depending on the initial investment, I feel there would be a big place for it.” In various international markets, both electric motorcycles and electric outboard engines have proved extremely competitive. Until that technology, and demand, advances further in Africa, Yamaha will continue to focus on its core product range which has been refined over the years and is now wellknown for its quality. Yamaha follows a corporate philosophy built around the Japanese word ‘Kando’, a feeling of deep satisfaction and excitement gained when interacting with a product of
supreme quality and exceptional value. Whether it’s musical instruments, audio equipment, golf cars, marine engines, ATVs, motorcycles or any of the other fantastic products distributed in SA by Yamaha, the company promises quality and the ‘performance of your life’ and Van Rensburg is adamant that this is still just the beginning for the brand in Africa. “We are not even close to our potential yet. If we fix a lot of those basic elements around customer experience and add that to our great product range, we are certainly going to grow in South Africa and the rest of Africa,” he concludes.
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