Africa Two Wheelers Market Outlook, 2024- Sample by Goldstein Market Intelligence

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Visibility Report Code :HC 1002

2016-2024

Africa Two Wheeler Market Outlook 2024: Global Opportunity & Growth Analysis, 2016-2024

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Table OF COnTenTs Connect With Us: Published By: Goldstein Research Copyright

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Description 1.

Parent Market Synopsis

Executive Summary

Research Methodology

Regional Opportunity Analysis on the basis of Competitors

Africa Two Wheelers Market Size (USD Billion) and Forecast Analysis, 2016-2024

Market Dynamics: Growth Drivers, Restraints and Opportunities 6.1. Risk Factors 6.2. Regional Variations 6.3.Recent Trends and Developments

Africa Two Wheelers Market Segmentation 7.1. Africa Two Wheelers Market By Vehicle Type (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.1.1.

Adoption Rate (%)of Africa Two Wheelers Market by Vehicle Type

7.1.2. Motorcycle (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.1.3. Scooter (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.1.4. Mopeds (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.1.5. Market Attractiveness of Africa Two Wheelers Market by Vehicle Type Copyright

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Description 7.1.6. BPS Analysis of Africa Two Wheelers Market by Vehicle Type 7.2.Africa Two Wheelers Market By Fuel Type (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.2.1. Adoption Rate (%) Africa Two Wheelers Market by Fuel Type 7.2.2. Gasoline (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.2.3. Electric (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.2.4. Market Attractiveness of Africa Two Wheelers Market by Fuel Type 7.2.5. BPS Analysis Africa Two Wheelers Market by Fuel Type 7.3. Africa Two Wheelers Market By Country (Market Share (%) & Y-o-Y Growth Comparison, 2016-2024) 7.3.1. Adoption Rate (%) Africa Two Wheelers Market by Country 7.3.2. Egypt Two Wheelers Market (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.3.3. South Africa Two Wheelers Market (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.3.4. Angola Two Wheelers Market (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.3.5. Nigeria Two Wheelers Market (Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.3.6. Morocco Two Wheelers Market ((Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.3.7. Kenya Two Wheelers Market ((Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.3.8. Thailand Two Wheelers Market ((Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) Copyright

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Description 7.3.9. Algeria Two Wheelers Market ((Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024) 7.3.10.

Rest of Africa Two Wheelers Market ((Market Size ($ Billion) & Y-o-Y Growth Analysis, 2016-2024)

7.3.11. Market Attractiveness of Africa Two Wheelers Market by Country 7.3.12. 8.

BPS Analysis Africa Two Wheelers Market by Country

Competitive Outlook 8.1. Market Share of Major Players (2016) 8.2. Company Profiles 8.2.1. Honda Motors Co. Ltd. 8.2.1.1.

Company Synopsis

8.2.1.2.

Business Strategy

8.2.1.3.

Product Portfolio

8.2.1.4.

SWOT Analysis

8.2.2. Yamaha Motor Company Limited 8.2.3. Kawasaki Heavy Industries Motorcycle & Engine Company 8.2.4. Ducati Motor Holding S.p.A. 8.2.5. Hero Motocorp Ltd. Copyright

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Description 8.2.6. TVS Motor Company 8.2.7. Bajaj Auto Limited 8.2.8. Suzuki Motor Corporation 8.2.9. Harley-Davidson, Inc 8.2.10. BMW AG 8.2.11. Aprilia 8.2.12. Triumph Motorcycles Ltd 8.2.13. KTM AG 8.2.14. Piaggio & C. SpA 9.

Porterâ&#x20AC;&#x2122;s Five Force Model

10. Market Landscape: Competition and Beyond 11. Market outlook for business players and entry level players to ascertain their business in dynamic ecosystem 12. Expert Analysis 13. Concluding Remarks

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1. exeCuTive summary Connect With Us: Published By: Goldstein Research Copyright

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1. Executive Summary Fig: 1-1 Africa Two Wheeler Market Size USD (Billion). 2016-2024

Fig: 1-2 Africa Two Wheeler Market Share(%), By Region-2016-2024

XX%

CAGR: (2016-2024)

XX%

e l p XX%

XX%

2016

2024

XX%

XX%XX%

2016e

2017e

2018f

Source: Goldstein Research

In 2016,

2019f

2020f

2021f

2022f

2023f

2024f

m a S

Motorcycles accounted for the highest market share XX% in Africa Two Wheeler Market

Fig: 1-3 Africa Two Wheeler Market Share(%), By Type-2016

XX%

South Africa Rest of Africa

Morocco

XX%

Algeria

Nigeria

Kenya

XX%

Ethiopia

Tunisia

XX%

Mauritius

XX%

Cape Verde

Tanzania

Source: Goldstein Research

With

XX% share in 2016, Nigeria region dominated the collective Africa Two Wheeler market

Fig: 1-4 Africa Two Wheeler Market Share(%), By Fuel Type -2016

XX%

Motorcycles

XX%

Gasoline Electric

Scooters

Mopeds

XX%

Source: Goldstein Research

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Key Findings  The Africa Two Wheeler market accounted for USD XX billion in 2016 and tends to reach the valuation of USD XX billion by 2024 at a CAGR of XX% over the forecast years owing a rapidly growing urban population (over 5 percent in the three cities) and urban sprawl  Inadequate and deteriorating roadway infrastructure in a fast sprawling urban environment (in Douala, for example, the road network has remained unchanged for the past twenty years despite the doubling of population and area so that its road density has declined; 0.5 percent of peripheral settlements have direct access to a paved road)  The decline in the organized public transport systems has led to a growth in largely unregulated, informally provided nonconventional public transport, the most dominant being the motorcycles, which is a common form of public transport system on most secondary roads in Kampala, Lagos, and Douala  whilst market growth will drive volumes in Nigeria and East & Central Africa, market share gains will be the key catalyst for growth in the Latin American countries of Argentina and Chile. West Africa, despite its relatively smaller size, presents an opportunity as it is a region with both low market share and low penetration  The African market is the fastest growing motorcycle market in the world growing at a XX% CAGR in the past five years. With an overall population of XX billion, very young and growing also at the fastest pace in the world, and with GDP per capita now approaching USD XX per capita; a stage at which two-wheeler volumes start taking off; Africa represents one of the most exciting opportunities for two-wheeler manufacturers  African two wheeler market is divided into five regions: (i) Nigeria – largest two-wheeler importer globally (XX million units) (ii) Western Africa – taxi market like Nigeria but dominated by Chinese (XX million units) (iii) Eastern and Central Africa – region with the highest scope for growth (XX million units) (iv) Northern and (v) Southern Africa currently do not offer much. Bajaj Auto’s two wheeler exports to Africa can grow from ~XX million units to XX million in the next five years

Africa Two Wheeler Market (USD Billion)

Nigeria

South Africa

2016

XX Billion

2024

XX Billion

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Inadequate public transportation infrastructure

Advent of motorcycle taxis

Rising demand for public transit

Increasing influx of cheap imports from Indian manufacturers

Easy financing

3. COmpeTiTOrs regiOnal analysis Connect With Us: Published By: Goldstein Research Copyright

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3. Major Players Presence-Regional Analysis Major Players/ Industries

Eastern Africa

Western Africa

Northern Africa

Honda Motor Co. Ltd Yamaha Motor Company Limited Kawasaki Heavy Industries Motorcycle & Engine Company Ducati Motor Holding S.p.A.

m a S

Hero Motocorp Ltd. TVS Motor Company Bajaj Auto Limited Suzuki Motor Corporation Harley-Davidson, Inc BMW AG Aprilia Source: Goldstein Research Copyright

High Penetration

Southern Africa

e l p

Medium Penetration

Low Penetration

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4. aFriCa TwO wheeler markeT analysis Connect With Us: Published By: Goldstein Research Copyright

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4. Africa Two Wheeler Market Size (USD Billion) & Growth Analysis Fig:- 4-1 Africa Two Wheeler Market Size (USD Billion)-2016-2024 XX

XX% XX%

XX%

e l p

XX%

XX XX

Fig:- 4-2 Africa Two Wheeler Market Y-O-Y Growth (%) Analysis-2016-2024

XX%

m a S

XX% XX%

XX% XX% XX% XX% XX%

XX% XX%

XX%

XX% XX%

XX%

2015

2016

2017

Source: Goldstein Research

2018

2019

2020

2021

2022

2023

2024

2016

2017

2018

2019

2020

2021

2022

2023

Source: Goldstein Research

ď&#x201A;§ Africa Two Wheeler market tends to increase at a CAGR of XX% and reach the market value of USD XX billion by 2024. In 2016, Africa Two Wheeler market valued USD XX billion owing to absence of reliable public transportation system and high cost of passenger cars ď&#x201A;§South Africa, Nigeria and Tanzania are the largest two-wheeler markets in Africa, followed by Kenya, Algeria, Uganda, Egypt, Morocco, Angola and Ethiopia. According to the World Bank, the population of Africa is forecast to reach XX billion by 2024. As the population of the continent continues to grow at an alarming rate, governments and other stakeholders are coming under pressure to develop and strengthen transport networks. Public transportation system in African countries is still inadequate and poorly developed, and consequently, two-wheelers are becoming a key medium for transportation in urban as well as rural settlements

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2024

4.1. Africa Two Wheeler Market Overview, By Region and Market Players-2016 Fig:- 4-3 Africa Two Wheeler Market Share (%), By Country, 2016

XX%

South Africa

XX%

Nigeria

XX%

Tanzania XX%

XX%

Kenya

m a S Algeria

XX%

Uganda

XX%

Morocco

XX%

Source: Goldstein Research

Egypt

Angola

Ethiopia

Fig:- 4-4 Africa Two Wheeler Market Share (%), By Players, 2016

e l p XX%

Honda Motor Co. Ltd

XX%

Yamaha Motor Company Limited

XX%

Kawasaki Heavy Industries Motorcycle & Engine Company Ducati Motor Holding S.p.A.

XX%

Hero Motocorp Ltd. TVS Motor Company Bajaj Auto Limited

XX%

Source: Goldstein Research

Suzuki Motor Corporation Harley-Davidson, Inc BMW AG Aprilia

 In Africa, two-wheelers offer an affordable mode of transportation. Workers as well as travellers, who earlier used to prefer other modes of transportation, are increasingly switching to two-wheelers, to avoid the frantic traffic in the cities across major African countries. Moreover, rising fuel prices is also driving demand for two-wheelers in the continent due to their higher fuel efficiency Furthermore, as driving license is not mandatory for driving gearless two-wheelers in majority of the African countries, tourists visiting the continent usually opt for two-wheelers for transportation purpose. Motorcycle segment dominated the continent’s two-wheeler market in 2015, owing to various associated advantages such as quicker acceleration, better engine capacity, large fuel tank, larger wheel base and easy maintenance

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5. markeT DynamiCs Connect With Us: Published By: Goldstein Research Copyright

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5. Market Dynamics

Growth Drivers

Growth Barriers

Rapid urbanization Booming motorcycle taxis business

High import duties Consumers tend to opt for non-genuine spare parts because of their lower price.

General Trend

Highly Complex

Moderately Complex

Waived

Advancement Copyright

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5.1. risk analysis Connect With Us: Published By: Goldstein Research Copyright

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5.1.1. DemanD risk Connect With Us: Published By: Goldstein Research Copyright

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5.1.1. Market Demand Risk

Market Demand Risk-Low Market Demand Risk-Low On the basis of Cost-effectiveness

On the basis of Population

On the basis of Rising concerns towards Import Duties

The demand for Africa Two Wheeler is likely to grow due to availability of cost-effective products for cardiac diseases in developing & underdeveloped countries like Africa , India, etc. Rising demand for Africa Two Wheeler benefits the new players to get into the market to provide affordable products and provide opportunities for expansion of business by existing players in the Africa Two Wheeler market

Rise in population coupled with higher demand chronic diseases and rising prevalence of diabetes and cardiovascular diseases in elderly population further raise the demand by adopting costeffective and advanced cardiac devices & services in the upcoming years. The rise in demand will help the new players to enter into the sector of cardiology and open the doors for the expansion of business by the existing players in the market

Rising import duties and automotive sector of lifestyles for the betterment of health are some of the factors swelling the demand for cardiac devices & services. Rapid growth in urbanization leads to hectic and busy schedules which leads to adopt time saving treatment. The high demand from the consumers is expected to make easy for new players to jump into the market of cardiology devices& services and opportunities for the business expansion by existing players in the Africa Two Wheeler market

Sample

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5.1.2. supply risk Connect With Us: Published By: Goldstein Research Copyright

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5.1.2. Market Supply Risk

Market Supply Risk-Low Market Supply Risk-Low On the basis of Technological Advancements

Due to rise in advancement in healthcare technology by government funding in order to provide portable and high-end devices with better services and to improve care as wells as treatment technology which is expected to raise the supply in the market with new efficient and cost effective products of cardiology

On the basis of Governmental Regulations

On the basis of Investment

Presence of strict government regulations across the globe for the manufacturing of Africa Two Wheeler to provide safe and secure products with less side-effects to the consumers. This is expected to be a huge restrain for the new players to jump into the Africa Two Wheeler market

The initial cost to setup cardiac device industry is very high due to requirement of research and development sector and high accuracy and precise healthcare manufacturing equipment with expertise which is expected to put many limitation for the new players in cardiac device market

Sample

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5.2. grOwTh Drivers Connect With Us: Published By: Goldstein Research Copyright

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5.2.1. Growth Drivers Growth in population is driving the Africa Two Wheeler Market 

Fig: 5-1 Population(Million), South Africa -2016-2050

Further, backed by increasing R&D investments in various countries, coupled with major leading two-wheeler manufacturers expanding their production capacities across Africa

South Africa Population South Africa Population

 The world two-wheeler tire market is also largely driven by the continuously expanding fleet size of motorcycles and scooters across all the regions. This factor has been predominantly supporting the replacement market of two-wheeler tires globally  Due to multiple cost benefits and various advantages associated with these vehicles, their demand has been increasing at a vigorous rate in the Africa region mainly because of their economical and pollution free run

2016 XX Million

2050 XX Million Two Wheeler Count 2016 2050 XX Million XX Million

 However, the growth of the two-wheeler tire market is majorly supported by several factors such as production, sales and swiftly expanding fleet size of two-wheeler vehicles

Source: World Bank

Impact Analysis:-

HMSI is targeting the sale of XX million scooters and motorcycles this financial year in a market that has just recovered from the impact of high-value currency invalidation

 Opportunity afforded by Africa’s large and growing population outweighs the structural challenges the continent presents

The import of built-up vehicles was banned and two further plants, Kenya Vehicle Manufacturers (KVM) and General Motors East Africa (GMEA were established, both of which had partial government shareholding

 Honda Motor Company is banking on Africa to fuel the growth of its motorcycle segment as Southeast Asian markets near maturity

Honda Motorcycle and Scooter India Pvt. Ltd (HMSI), India’s second largest two-wheeler maker, will launch four completely new models—including the Africa Twin—in the current financial year, but is putting on hold plans to develop a middleweight motorcycle to take on Royal Enfield High

Medium

Low

Impact on Africa Two Wheeler Market Copyright

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5.3. markeT resTrainTs Connect With Us: Published By: Goldstein Research Copyright

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5.3.1. Market Restraints Regional automotive value chains have not developed to any significant extent in Africa

Fig: 5-3 Vehicle Sales in Nigeria

 The biggest obstacle facing integration of the industry within the region is that of the costs of trade diversion, which are particularly high given the large presence of low-priced second-hand two wheelers in most national markets

XX%

 The main infrastructure constraints are electricity and transport. Africa needs to spend 4.5 percent of GDP to significantly improve its infrastructure but a group of countries comprising Cameroon, Kenya, Nigeria, Senegal, and Zimbabwe were only spending 1.3 percent of GDP during 2010-2015

XX%

 Indirect costs include transport costs and the regulatory environment and these are again higher in most African countries. But the biggest cost penalties arise in the areas of invisible costs that take account of the quality of the business environment

XX%

 The level of industrialization in SSA is very low as is the level of manufacturing capability Passenger Vehicle Sales

Light Vehicle Sales

HeavyCommercial Vehicle Sales

Source: National Center for Biotechnology Information

Fig: 5-3 Book Price versus Actual Price in Africa Royal Enfield 2010

Honda Africa Twin 2017

Purchase Price Overseas

USD XX

Base Government Price

USD XX

Old Car Depreciation of 30%

USD XX

CIF Value

USD XX

Final Exit Price From Customs

USD XX

Tax Paid Amount on Government Base Value

USD XX

Effective Tax Rate on Actual Paid CIF Value

XX%

Impact Analysis: Africa’s high manufacturing costs are primarily a function of factors external to the firm – weak infrastructure, and regulatory impediments.  Poor electricity supply is the key infrastructure constraint and apart from the disruption to production, it leads to firms having to invest in private generation equipment. Corruption also features as a heavy cost burden. In all, invisible costs in Africa accounted for 13 percent of sales compared to less than 8 percent in the next highest region (South Asia) and below 3 percent in East Asia

High

Medium

Low

Impact on Africa Two Wheeler Market

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6.4. impaCT analysis Connect With Us: Published By: Goldstein Research Copyright

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6.4. Impacting Factors of Africa Two Wheeler  Drivers of Africa Two Wheeler Ducati, Kawasaki and KTM are among motorbike makers looking to build new growth in this market of 600 million people as orders for larger bikes in industrialized countries slow

Mature Market in Other Regions

Startups Take Africa By Storm

Africa’s vibrant startup scene is gaining momentum, with talk of big investment numbers and entrepreneurs creating deft business solutions spanning the full technological spectrum to meet Africa’s unique challenges

Economic Forces Impacting Features

Increased Interest in Big Bikes

Source: Goldstein Research Copyright

Larger Wheel Base

Growing per capita income, increasing employment opportunities, developing infrastructure and vast reserves of natural resources are driving the country’s economic growth. According to the Association of Motorcycle Importers and Distributors, the country registers huge demand for premium motorcycle with an engine capacity of more than 500cc, and the same trend is expected to continue over the next five years as well. As these high-end motorcycles are comparatively costlier than other motorcycles with low engine capacities, the two-wheeler market of South Africa is expected to grow at a healthy pace in value terms over the next five years Moreover, booming motorcycle taxis business in African countries is further augmenting demand for motorcycles in the continent. Backed by rapid urbanization, growing population and inadequate means of transportation, the segment is anticipated to maintain its dominance over the next five years as well www.goldsteinresearch.com

6. aFriCa TwO wheeler markeT analysis, 2016-2024 Connect With Us: Published By: Goldstein Research Copyright

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6.1. Africa Two Wheeler New Sales & Used Vehicles (Million Units), 2016 Indicator

Ethiopia

South Africa

Nigeria

Kenya

Fleet Size

Sales of New Vehicles

Commercial Vehicles (% New Sales)

New Vehicles (% Total Fleet)

Second Hand Vehicles (% Total Fleet)

e l p

Motorization Rate (/1000 People)

m a S

Source: Goldstein Research Copyright

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6.1. Africa Two Wheeler Market Statistics, 2016-2024 Fig: Fig: 7-4 7-4 Africa Africa Two Two Wheeler Wheeler Imports Imports Market Market Share Share (%), (%), 2016 2016

Fig: Fig: 7-4 7-4 Country Country wise wise Distribution Distribution of of Vehicles Vehicles in in Africa, Africa, 2016 2016 XX%

XX%

China India

XX% XX% XX%

South Africa

XX% XX%

XX%

Japan

XX%

Egypt

XX%

Nigeria

Germany

Morocco

USA

XX%

UAE

Libya

XX%

Congo

South Africa

XX%

Togo

Kenya

XX%

Source: Goldstein Research

Ivory Coast

Source: Goldstein Research

XX%

Fig: Fig: 7-4 7-4 Africa Africa Two Two Wheeler Wheeler New New Sales Sales & & Used Used Vehicles Vehicles (Units), (Units), 2016-2024 2016-2024 Used Vehicles

140

Fig: Fig: 7-4 7-4 Africa Africa Two Two Wheeler Wheeler Production Production and and Sales Sales (Unit), (Unit), 2016-2024 2016-2024 Production

New Sales

Sales

450

120

400

XX XX

350

100 XX

300 XX

250 200

60 40 20

Tunisha

XX%

Others

Algeria

2017

150

2018

2019

2020

2021

2022

2023

2024

100

0 2016

XX XX XX XX

0 2016

2017

2018

2019

2020

2021

2022

2023

2024

Source: Goldstein Research www.goldsteinresearch.com

7. CenTral aFriCa TwO wheeler markeT analysis, 2016-2024 Connect With Us: Published By: Goldstein Research Copyright

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Parameters

Cameroon

Central African Republic

Chad

Congo Brazzaville

Democratic Republic of Congo

Equatorial Guinea

Area Population Capital Density Growth Rate of Population Languages Religion Political System Rate of Urbanization Main Cities GDP per Capita Contribution of economic sectors to GDP Currency Rate of Inflation

m a S

e l p

Gabon

Public Transport in Central Africa

Background

Public Transportation Regulation

Public Transport Operators

Cameroon Central African Republic Chad Congo Brazzaville Democratic Republic of Congo Equatorial Guinea Gabon

e l p m a S

7. wesTern aFriCa TwO wheeler markeT analysis, 2016-2024 Connect With Us: Published By: Goldstein Research Copyright

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Parameters

Benin

Burkina Faso

Cape Verde

Cote Dâ&#x20AC;&#x2122;Ivoire

Gambia

Ghana

Guinea Bissau

Guinea Conakry

Liberia

Mali

Niger

Nigeria

Area

Population

Capital Density

Growth Rate of Population

Languages

Religion Political System Rate of Urbanization

Main Cities GDP per Capita

Contribution of economic sectors to GDP

Currency Rate of Inflation

m a S

e l p

Senegal

Sierra Leone

Togo

Public Transport in Western Africa

Background

Public Transportation Regulation

Benin Burkina Faso Cape Verde Cote Dâ&#x20AC;&#x2122;Ivoire Gambia Ghana Guinea Bissau Guinea Conakry Liberia Mali Niger Nigeria Senegal Sierra Leone Togo

e l p m a S

Public Transport Operators

7. sOuThern aFriCa TwO wheeler markeT analysis, 2016-2024 Connect With Us: Published By: Goldstein Research Copyright

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Parameters Angola

Botswana

Lesotho

Madagascar

Malawi

Mauritius

Mozambique

Namibia

South Africa

Swaziland

Area

Population

Capital

Density

Growth Rate of Population Languages

Religion

Political System Rate of Urbanizatio n Main Cities

GDP per Capita Contributio n of economic sectors to GDP Currency

Rate of

m a S

e l p

Zambia

Zimbabwe

Public Transport in Southern Africa

Background

Public Transportation Regulation

Public Transport Operators

Angola Botswana Lesotho Madagascar Malawi Mauritius Mozambique Namibia South Africa Swaziland Zambia Zimbabwe

e l p m a S

7. sOuThern aFriCa TwO wheeler markeT analysis, 2016-2024 Connect With Us: Published By: Goldstein Research Copyright

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Parameters

Burundi

Comoros

Djibouti

Eritrea

Ethiopia

Kenya

Rwanda

Seychelles

Somalia

Tanzania

Area

Population

Capital

Density

Growth Rate of Population

Languages

Religion

Political System Rate of Urbanization

Main Cities

GDP per Capita Contribution of economic sectors to GDP

Currency

Rate of Inflation

m a S

e l p

Uganda

Public Transport in Eastern Africa

Background

Public Transportation Regulation

Burundi Comoros Djibouti Eritrea Ethiopia Kenya Rwanda Seychelles Somalia Tanzania Uganda

e l p m a S

Public Transport Operators

7. pOrTerâ&#x20AC;&#x2122;s Five FOrCe mODel Connect With Us: Published By: Goldstein Research

7. Porter’s Five Force Model

Customer can easily switch to substitute products. So substitutes are a threat to your company. When there are actual and potential substitute products available then segment is unattractive. Profits and prices are effected by substitutes so, there is need to closely monitor price trends. In substitute industries, if competition rises or technology modernizes then prices and profits decline.

Barriers to Entry HIGH High Cost Manufacturing, Well Established Players.

Supplier Power: LOW

Intensity of competition among the existing competitors in the market. Intensity of rivalry depends on the number of competitors and their capabilities. Industry rivalry is high when: •There are number of small or equal competitors and less when there’s a clear market leader. •Customers have low switching costs •Industry is growing •Exit barriers are high and rivals stay and compete •Fixed cost are high resulting huge production and reduction in prices Copyright

e l p

Threat of new entrants

m a S Bargaining power of suppliers

The Barriers to Entry are significantly high which means that it is difficult for outside companies to enter the industry. New entrant is require to offer the innovative and distinguish service or product in order to make place in the competitive space, only such a player tends to establish its market presence and obtain the necessary clearance from regulatory agencies and obtain the profit.

Industry Competitors: HIGH Honda, Suzuki, Yamaha, Kawaski, etc

Bargaining Power of buyers

Buyer Power: HIGH

Threat of substitute products or services

Substitutes: LOW

The power of Buyers is significantly high and they are able to negotiate for better pricing. However on the supplier side, the power of Suppliers is also high as there are multiple supplier for a particular test and these causes, for companies to compete on price when they do not have any point of differentiation.

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8. COmpany prOFiling Connect With Us: Published By: Goldstein Research Copyright

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8.1. yamaha Connect With Us: Published By: Goldstein Research Copyright

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8.1.1. Yamaha (Company Overview)

Founded 1955

Employees 53,306

Headquarters Japan

Website www.yamaha-motor.com Key Products

Company Overview Industrial Robots



Yamaha Motor Co., Ltd. is a Japan-based vehicle manufacturing company



The Company is traded on the Tokyo Stock Exchange (TYO), Japan

Golf Carts



Basically, the company have four business segments including two-wheel vehicle, marine segment, special machinery segment, industrial machinery & robots segment

Power Generators



The Company had 117 subsidiaries and 28 associated companies



The Marine segment manufactures and sells outboard engines, water vehicles, sailing boats, fishing boats and Japanese-style boats

Snow Mobiles



The Special Machinery segment provides four-wheel buggies, recreational offhighway vehicles, golf carts, power generators and general engines and others

Motorcycles

Water Vehicles

Business Strategy 

Enhance business models & Product Innovation: The company is continuously working on the enhancement of their business model by increasing their distribution channels and tap the growth markets with advanced technology products. The high efficiency product development and cost reductions is the major factor for the growth of the company. The company is developing a strong sales and marketing network in order to maintain the customer base. The company is also reducing the cost of platform models to increase their operating margin and to drive sustainably. The company consolidated the global supplier network from 650 to 350 in 2016. Moreover, the company spend USD 0.80 Billion for research and development activities in 2015. The rising expenditure of R&D segment further helping the company to manufacture advanced and innovative products

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8.1.2. Yamaha (Revenue & Financial Analysis) Fig :- 9-5 Yamaha Motor Co. Ltd.-Revenue (USD Billion), 2013-2015

Revenue (USD Billion)

14.11

Key Takeaways 

Overall net sales of the power products business rose USD 170 Million, or 13.5%, year on year to USD 1,410 Million in FY2015



Net sales in North America increased USD 680 Million, or 24.8%, year on year, to USD 3.440 Million in FY 2015



There was a gradual recovery in demand for motorcycles and outboard motors in the United States, and motorcycle demand rebounded in Europe

13.29

12.32

2013

2014

2015

Source: Annual Report

Table No. 20 Key Financials

2014

2015

Operating Margin

5.70%

7.50%

Net Profit Margin

4.50%

3.72%

Debt to Asset

27.63

Market Capitalization

USD 934.97 Billions

Source: Google finance, Morningstar

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8.1.3. Yamaha (Revenue Split & Recent News) Fig :- 9-6 Yamaha Motor Co. Ltd.-Revenue (%)-By Product Segment, 2015

Fig :- 9-7 Yamaha Motor Co. Ltd.-Revenue (%), By Geography Segment, 2015

13.20%

Asia-Pacific

12.50%

NorthAmerica 52.20% Europe

22.10% Other Region

Motorc ycles Marine Produc ts Power Produc ts Other Produc ts Industr ial Machinery & Robots

Source: Annual Report