Yamaha increases motorcycle prices for eighth time in 2022

The company has increased prices by Rs 13,000 on average 

LAHORE: Yamaha Motor Pakistan has announced its eighth price increase for 2022. The new prices are as follows: 

Old Price New Price Difference Change 
YB-125Z Rs 293,500 Rs 305,500 12,000 4.09%
YB-125Z DX Rs 314,500 Rs 327,000 12,500 3.97%
YBR-125 Rs 322,500 Rs 336,000 13,500 4.19%
YBR-125G (Black/Red) Rs 336,000 Rs 349,500 13,500 4.02%
YBR-125G (Matt Dark Grey) Rs 339,000 Rs 352,500 13,500 3.98%

On average
, Yamaha’s prices have increased by more than 55% from January till now. The price changes until now are as follows: 

January 2022  December 2022 Difference Change 
YB-125Z Rs 190,000 Rs 305,500 115,500 60.79%
YB-125Z DX Rs 205,500 Rs 327,000 121,500 59.12%
YBR-125 Rs 211,000 Rs 336,000 125,000 59.24%
YBR-125G (Black/Red) Rs 232,500 Rs  349,500 117,000 50.32%
YBR-125G (Matt Dark Grey) Rs 235,500 Rs 352,500 117,000 49.68%

Worst start since Covid 

The price hikes have led to Yamaha experiencing a 13% lower year-on-year (YoY) sales volume. It’s current ten month sales of 16,892 trails by 2,470 behind the 19,362 it had achieved over the same period last year. The company’s monthly average sales have also contracted from 1,760 units to 1,536 units. This amounts to the worst start the company has had since the breakout of Covid-19 and the ensuing lockdowns in 2020. 

No respite on the horizon 

Going forward, further depreciation in the PKR will inevitably lead to Yamaha introducing more price increases in the upcoming year. Future price increases will be compounded not only by the PKR’s depreciation but also because the Federal Board of Revenue has increased the number of parts upon which additional customs duty is levied via Statutory Regulatory Orders (SRO) 693 (I)/2006. Yamaha, owing to its lower sales volume, will likely face a greater double whammy than many of its competitors. 

However, irrespective of whether Yamaha does as predicted, inflationary pressure alone is likely to compound the negative multiplier that these price increases will have on Yamaha’s sales in the months to come. However, the silver lining to Yamaha’s woes may be the various financing schemes introduced recently, either directly or indirectly through a partner. The popularity of these schemes will likely increase on account of both the increase in motorcycle prices, and because of the nature of Yamaha’s target market. 

Yamaha, unlike Chinese manufacturers and Honda Atlas, targets upmarket customers who are more likely to have higher monthly salaries in comparison to those targeted by other motor companies. The financing schemes can therefore reduce the cost of the purchase by spreading it out over a certain period. This will allow Yamaha to enjoy a regular stream of income and better enable prospective customers to absorb any future price increases. 

In most cases, the problem with these financing models is the risk that a customer may default on the payments. This risk subsequently translates to the sales team rationing their supply across those individuals that they perceive to have better repayment capacities. Targeting the upmarket category, however, reduces the search cost associated with this task. Sales figures, for now, paint a bleak picture for the model.

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Daniyal Ahmad
Daniyal Ahmad
The author is a member of the staff, and covers the automobile sector as a sector analyst. He can be reached at [email protected]



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