Japanese two-wheeler major Yamaha Motor Corporation (YMC) said it will replace its existing venture in India by a joint venture with compatriot Mitsui & Co.
The joint venture, to be named India Yamaha Motor Private Limited (IYM), would take over the existing manufacturing and business operations of Yamaha Motor India (YMI) starting April, the company said in a statement.
Yamaha, which has so far invested Rs 160 crore in Indian operations, said it planned to eventually take it up to Rs 560 crore to strengthen its position. After the restructuring, the company said, in the first year of operations (nine months period starting April 2008) it expects sales worth Rs 100 crore.
Mitsui’s investment will take the form of an allocation of new stock shares to a third party issued by IYM for the equivalent of 30 per cent of the company’s capitalization. This way, IYM will increase its total capital to a planned Rs 560 crore and utilise the same factory and office facilities used by YMI, and take over YMI’s manufacturing and business operations from April, 2008.
Based on this, YMI will begin the closing of its books and corporate liquidation. It will be business as usual for the employees and business partners of YMI, the statement added.
Through the “Yamaha-Mitsui Strategy Committee” that was established following Mitsui’s acquisition of 3 per cent of YMC stock in May 2007), YMC and Mitsui have reviewed the possibilities for Mitsui’s participation in various areas of YMC’s business activities with the aim of strengthening its overseas business and cooperative ventures in other areas of business.