[CrAzY dRiVeR]

We had a similar discussion in the past - when Honda launched the CB350 H'ness. A made in India, for India, Royal Enfield rivalling, 350cc bike priced at an accessible 1.9 lakhs - launched with a premium dealership with extremely limited presence. However, Honda went on to execute their plan to near-perfection and have almost successfully established their premium network all-over the country. A giant step back though - was to limit the 650cc+ bikes only to the BigWing 'TopLine' network.

Related thread - https://www.team-bhp.com/forum/motor...350-hness.html (Your thoughts on Honda's BigWing strategy with the CB350 H'ness?)

At first look, Yamaha seems to be following a similar strategy with the Aerox 155, retailing only through Blue Square Dealerships. What is Blue Square? Yamaha says -

India Yamaha Motor (IYM) Pvt. Ltd. is pleased to announce a brand-new initiative to propagate ‘The Call of the Blue’ with the opening of “Blue Square”, a unique concept-driven showroom that institutes Yamaha’s racing DNA of excitement, sport & style.

“Blue Square” is coined to fit into the legacy of Yamaha’s role in global motorsports with “blue” characterizing the brand’s racing DNA and “square” defining a one-stop buying junction.

The “Blue Square” institutes Yamaha’s identity of racing DNA through visual and exhibitory outline of showroom design on the exterior porticos of the outlet, BLUE-themed interior ambience inside the outlets, exciting display of motorcycles based upon racing DNA of Yamaha, along with accessories, apparels and genuine spare parts to realize the brand’s excitement, sporty & stylish personality. A lineup of accessories and apparel are also the prime focus of the company for “Blue Square”.

At the new “Blue Square”, the record management interface will maintain a log of all customer records, digitally. Customers can directly download the product brochures by scanning the vehicle QR Codes. The purpose of maintaining customer information digitally is to provide one-to-one marketing which will help in on time communication and speedy responses. In the future, technologies like face scanning systems will be introduced. Yamaha in the coming years will also connect “Dealer Management System” for more effective and on-time communication.

Additionally, a café to rewind and discuss business and promotion will be available. Alongside, Blue Streaks which supports in speedy redressal of customer queries and will conduct touring programs with the help of a riding advisor. “Blue Square” will further drive Yamaha’s India strategy to build its market for premium motorcycles and scooters in the future. The first official launch was done in Chennai today at Bikerz where the “Blue Square” outlet of size 4000 sq. feet was opened to the public. It is located at 351, Anna Salai, Nandhanam, Chennai-600035. Along with regular line-ups, the latest superbikes will also be on display and sale.

While the "Blue Square" concept was established back in 2019 itself - it has become the topic of discussion now because the Aerox 155 becomes the first mass-market product to be restricted to this network. There was no official communication on this and every dealer was accepting bookings, only to be left with dissatisfied customers who haven't even seen a display bike till date. Customers like me had to cancel their old bookings, and take delivery of their scooters from cities 6+ hours away from home.



Imagine a 155cc scooter like the Aerox being unavailable in a major city such as Mumbai -

Originally Posted by Axe77

Speaking of botched up launches, I have walked into the Yamaha showroom multiple times since its launch, the last time got revived after I saw your bike purchase post. I was sure by now it should be available, a good 3 - 4 months since its launch. It still isn’t. I queried the completely disinterested sales person at the Lower Parel showroom and got the explanation with him after some casual cross questioning.

Apparently Yamaha wants showrooms stocking the Aerox to have some blue theme and basic visual standard which would cost approx 30 - 35L, which the dealerships are pushing back on because they don’t find it worthwhile - ergo this standoff. (Just repeating what the salesperson told me).

Net result: to the best of my knowledge there is no Aerox available in a metro city like Mumbai. What an absolute pity and disaster. Incidentally, in this same showroom more than a decade ago I have seen the might V Max standing - it was then twice the floor plate than its current avatar - clearly telling of Yamaha’s India trajectory over the last decade and a half. After years of yearning after maxi scooters its Yamaha that finally launches a gem of a product and its unpurchasable in Mumbai.

However, unlike Honda, I'm not sure Yamaha has made the right move here - unless they have promised a lot many more exciting products exclusive to the Blue Square showrooms.

Pros -

+ Good customer experience. The new showrooms are significantly better than those from the existing Yamaha network.
+ Hopefully, this means Yamaha will bring in more CKD and CBU bikes in the future, at least to showcase their flagships in these premium showrooms, boosting Yamaha's image and sales.
+ Premium competition (Kawasaki, Triumph, etc) maintaining such a network with only CKD/CBU bikes can only dream of the economy of scale BlueSquare can achieve. Only Honda's BigWing can do better!

Cons -
+ Aerox 155 is not a high volume product like the Honda CB350, and not encouraging enough for dealers to invest in the premium network just to have this one additional product in their portfolio. Yamaha needs more premium products.
- Initial ramp-up has been extremely slow. The entire state of Maharashtra has just two dealers, that too - none in Mumbai yet!
- Customers in many major cities and towns have no option, but to wait for more than a year or more. Will customers wait, or go through such inconvenience for a scooter?







So what are your thoughts on Yamaha's Blue Square strategy with the Aerox 155?

[Grimlock]

Agreed Crazydriver, the existing showroom would be hesitant to invest that money post COVID. And it would be risky to do something like this for the Aerox alone. It just isn't that big of a halo product when compared to the bigger bikes that Yamaha have in their lineup.

I think the Aerox would be one of the few bikes to be exclusive initially to build up hype and probably the R15's, Fz's will have join in soon if they are to stick to their 22 to 24 plan. Would the Aerox alone help double these numbers for them? Highly doubtful.

"Yamaha will aim to double the number of premium sport models sold and “roughly double” the number of Blue Square premium dealerships which serve as “real points of contact” with customers."

https://www.autocarindia.com/bike-ne...by-2024-423687

Maybe the old showrooms would be the base for the mobility solutions that are in the works?

[aargee]

Originally Posted by CrAzY dRiVeR

Imagine a 155cc scooter like the Aerox being unavailable in a major city such as Mumbai -

Cons -
- Initial ramp up has been extremely slow. The entire state of Maharashtra has just two dealers, that too - none in Mumbai yet!

So what are your thoughts on Yamaha's Blue Square strategy with the Aerox 155?

No products, especially automobile, succeeds in this country without having their products launched in DL, Surat, Chandigarh, Mumbai, Pune, Hyderabad, Bangalore & KL-07.

It's just a question of time; may be a little delay on some bureaucracy, I'm positive to see a positive news coming from Bombay soon.

[saikishor]

What about the service part? For other offerings(possible future CBU/CKD launches) I feel it can be restricted to these Blue Square dealers. But for something like the Aerox, I feel service shouldn't be restricted to Blue Square rather it should be available at all Yamaha showrooms.

[CrAzY dRiVeR]

Originally Posted by saikishor

But for something like the Aerox, I feel service shouldn't be restricted to Blue Square rather it should be available at all Yamaha showrooms.

Service isn't restricted - can be done from any local Yamaha dealer, provided the oil and parts are available with them.

[neil.jericho]

Dr CD, to me, there are a few different angles that we need to consider, to make sense of this Blue Square strategy. And the Aerox 155 isnt the central piece of the puzzle.

- Necessity
Does Yamaha need to have showrooms that differentiate themselves from the regular Yamaha showrooms and other company showrooms in the city? Absolutely! As a former first gen Yamaha R15 owner, it did sadden me to see the company lose its way in the last decade. But when I was at the Blue Square showroom in Cochin (for the delivery of your Aerox, no less), I was pleasantly surprised to see the variety of motorcycles and scooters that are on sale. And this was even without the mass market MT15 being available. Yamaha has slowly built up their portfolio. Now its time to move up. More on that later.

In my books, Royal Enfield set the template for classy interiors in motorcycle showrooms. They have mastered the art of giving an upmarket feel to their showroom across India. Honda planned and executed their Big Wing strategy very well. I have been a big fan of their foresight from the time they announced it. Yamaha is just following suit. The problem is execution and RoI.

- Execution
Yamaha, being Yamaha, they just had to botch things, didnt they? They planned to sell the Aerox through select stores, while allowing every dealer to take bookings. In parallel, the company is arm twisting its dealers to pump in money to move to the Blue Square format, which will involve
a. shifting to a bigger showroom or
b. investing a lot to spruce up existing showrooms

All of this is going to take up a lot of capital from the dealerships. Are they going to do so?

Yamaha dealers must be an annoyed lot. On one hand, they have all taken bookings of the Aerox and their sales guys are getting frequent calls from customers, asking where the scooters are. On the other hand, Yamaha isnt giving them any clarity on deliveries or display bikes. What an awful position to be in.

Yamaha might think that they are teaching their dealers a lesson but as always, they have lost sight of the big picture. Enthusiasts are annoyed with Yamaha, instead!

A classic case of cutting off the nose, to spite the face .....

- Return on Investment
This is where things get interesting. Yamaha hasnt made any announcements about what big bikes will be sold in India through the Blue Square stores. Reliable little birdies have been chirping in my ear that the Tenere 700 is being lined up. I wont be surprised if the sensible R7, also will make its way to India. Yamaha does have a very wide range of middleweight motorcycles in their portfolio. What will this traditionally risk averse company bring to India? Even if Yamaha goes all out (they wont, but humour me), it will be very difficult for the MT07 and MT09 to make a mark in the naked middleweight segment. The litre class naked market in India effectively dead. So, the MT10 is out. The stylish XSR700 and 900 will struggle to sell. Whatever they price it at, the R1 will sell below 15 units a year. Nothing more. So, just the Teneres and the R7, then?

Financially, that doesnt make sense. Not like the Honda Big Wing strategy.

It has to be something else.

I wouldnt have done things this way but I can see this being the line of thinking in Yamaha - Dealer rationalization. Less dealers. More Blue Square showrooms. More profits per showroom.

The company has decided that it is OK to lose some of their existing, legacy dealers that were happy with the status quo. Post Covid, many dealers would understandably not want to move to the Blue Square setup. Yamaha must be slowly pushing them out or making it clear that they will get secondary preference for allocations etc.

Yamaha has to be looking at onboarding new dealers who are willing to pump in money to rebuild how Yamaha's showrooms look and feel. If that means no Aerox sales in Bombay for a year, so be it. Until someone steps up to say that they will run a Blue Square dealership in Bombay, that is how things are going to be.

So, the name of the game is short to medium term losses, for a long term gain. Will Yamaha's gamble succeed? Honestly, Im not sure.

[Axe77]

I think between CD and Neil you guys have summed up perfectly the views on this Blue Square business - my own thoughts resonate completely with what has been written.

Whether it can or will work, as a starting point, I’m not even in a position to comment because I don’t know Yamaha’s intended business plan. Do they want to sell a whole lot of scooters and entry level bikes, spicing up their brand image with tasty higher capacity bikes or aspirational lifestyle products like the Aerox. Or do they want to limit their portfolio to a much narrower band of products overall.

Most importantly, to what extent has their stated India strategy been socialised with the dealerships. Dealerships will want to know the intent of the business plan, a specific roadmap, as well as have confidence in management’s ability and conviction to deliver on it. Without that its going to be a tall order to expect any change.

Other than component suppliers there are two key stakeholders in a company’s success - dealers and customers. At this point, their strategy (or approach to implementing the strategy) doesn’t seem to be finding favour with either of these group sets. To me, that doesn’t ring like the build up to a success story.

I hope they can be humble as well as nimble enough to recognise this and course correct asap. Else there’s going to be very little “Yes Yamaha” and mostly “No, Yamaha” sentiment brewing among customers as well as dealers.

[TorqueMonster]

I have a theory, that Blue Square is going to be the showroom for bigger superbikes and also niche bikes, such as the R3, XSR 155 WR155, and middleweights and tourers. The SE Asian Yamaha's are of different types, such as dirt bikes, enduros, scramblers and other retro-modern vehicles etc. Selling these cheaper bikes through limited dealers since they would not have many sales, while also using this as a platform for showing off their superbikes such as the MT and R series makes sense.

The only reason why I am making this correlation is that the Blue Square strategy started off with the Aerox, and not with any of the present expensive Yamaha's such as R15 or MT15.

[umohan98]

I'm a novice on this field, but what it looks like is all these brands want to emulate Maruti's Nexa-Arena strategy. But a lack of volume product till now has hampered this approach. Maybe the Aerox will drive more Blue Squares being opened, like the H'ness drove Honda's Topline network.

I think even Hyundai to some extent has this, but at not so large a scale where they are two seperate retail chains, the more premium ones retail Elantra and Tuscon.

[amol4184]

I saw an Aerox in my town and I went to a dealer to see if I could get a test drive. The dealer was clueless and said whoever has that scooter has got it from some other place and that they have no idea when they will receive the stock.

Surprisingly he didn't mention anything about this Blue Square strategy.
Reading all these replies I wonder if the dealer himself knows about Blue Square? Probably not.

[CrAzY dRiVeR]

Originally Posted by amol4184

Reading all these replies I wonder if the dealer himself knows about Blue Square? Probably not.

A local dealer I visited kept repeating "Blue Core" instead of "Blue Square" for the dealerships till I corrected it for him. Too many confusing names with Yamaha - Blue Core being their current engine architecture.

That said - there was never an official communication from Yamaha that the sales would be limited to Blue Square dealerships. Announcing it at launch would have avoided so many confusions! Even now - they say the bike will eventually be made available to all showrooms as production capacity is increased, without any clear mention of the timelines.

[gauravanekar]

It’s only a matter of time before some electric scooter maker steps up the performance and style game, Already ICE scooters don’t make sense for practical use when compared to e-scooters. With economies of scale, e-scooter makers would expand their portfolio at some point. Compared to ICE technology EVs are much easier to scale into higher categories, we can not expect Bajaj to come up with a world -class sport scooter like Aerox so easily. We can sure expect Ather to come up with a proper electric sport scooter in 2 years or so.
In such scenario why would a Yamaha dealer invest capital for Yamaha, that too just for Aerox. Simply doesn’t make sense.

[Cyborg]

A lesson Yamaha wants to teach everyone:
“How to kill a lovely product by your launch strategy”

I really wonder if the top brass are connected to reality. They have to be smoking something really strong if they can’t see or read how they are killing their own product.

The people in charge of this product line/launch should be fired. Even if there is a method to their madness (Blue Square) they should have communicated it in the media much beforehand.

Cheers

[CoolFire]

Yamaha management is notorious for failure to read Indian conditions. Their strategy resembles the botched Datsun-Nissan experiment rather than the high volume Arena-Nexa strategy or even Honda’s premium channel strategy.

Yamaha simply do not have the bandwidth for such a differentiated channel strategy here. Earlier they realise this, better for them.

[shady]

Looks like the 'Blue Square' strategy by Yamaha is really confusing. I know of a regular dealership (Pacer Yamaha at Hebbal, Bangalore) that is delivering the Aerox to customers. They do not have a display/test ride vehicle but they showed me an Aerox which was ready for delivery. Waiting period quoted was a month for Aerox & R15 v4.