LAHORE: Yamaha Motor Pakistan has announced its seventh price increase for 2022. The new prices are as follows:
On average, Yamaha’s prices have increased by 50 per cent from January till now. The price changes until now are as follows:
The price hikes have led to Yamaha experiencing a lower year-on-year (YoY) sales volume. It’s current nine month sales of 14,822 trails 525 units behind the 15,347 it had achieved over the same period last year. The company’s monthly average sales have also contracted from 1,705 units to 1,647 units.
Going forward, a further depreciation in the PKR may lead to Yamaha introducing a final price increase towards the end of the year. 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 Atlas Honda’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. The success of this model will be clear in the months to come
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