NEW DELHI (Bloomberg) Yamaha Motor Co., the world's second-biggest motorcycle maker, plans to double the number of its sales outlets in India in the next five years to tap demand in villages as economic growth boosts incomes.
India Yamaha Motor Pvt. may increase showrooms to 2,000, mostly in small towns and rural hubs, Koji Arai, director and chief sales officer, said Thursday in an interview in Surajpur, near New Delhi.
The country, home to Asia's third-biggest economy, is spending more to build roads connecting villages and improve electricity, phone and health care. The infrastructure investments and rising prices for farm produce are boosting rural incomes. Yamaha is following bigger rival Hero Honda Motors Ltd. to expand in the countryside, where 70 percent of India's more than 1.1 billion people live.
"The next strong demand for motorcycles could only happen in rural and semiurban areas as people in urban centers shift to cars," said Mayur Milak, an automobile industry analyst at Alchemy Share & Stock Brokers Ltd. in Mumbai. "The only issue will be branding, because typically it is word-of-mouth publicity that works and Hero Honda has an advantage in this."
Industrywide motorcycle sales advanced 26 percent to 7.3 million units in the year that ended March 31, according to the Society of Indian Automobile Manufacturers.