Yamaha, Escorts in Japanese firm's first co-branding deal

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NEW DELHI -- Japan's Yamaha Motor Co. has agreed, for the first time, to joint branding on motorcycle and scooters. Four four-stroke models will launch under the Escort Yamaha brand in India in 1998 and 1989, though the branding will not be on vehicles exported overseas.

The $147m joint venture between the $8bn Yamaha and the New Delhi-based Escorts Group, will develop the world's largest motorcycle plant in India, Yamaha President Takehiko Hasegawa told reporters in New Delhi.

Escorts has sold its motorcycle and moped business to the newly formed Escorts Yamaha Motor joint venture, to be owned 26% each by the two partners after an initial public offering of stock.

In the early 80s Yamaha had licensed Escorts to produce for sale in India its 100cc motor-cycle which is currently among the top three brands in its category.

Initially 200,000 scooters will be made and motorcycle production will increase from its existing 300,000 vehicle output to 500,000. Future predictions are for overall production of two-wheelers to reach 700,000 by 2005.

"The output of our factories in Japan has reduced to 700,000 last year, consistent with our policy to set up our supply source in the place where there is demand," Hasegawa said. "With such a situation, it seems that Japan will give away to major Asian countries the status of the biggest supply source in the world market by early the next century."

Headstart, New Delhi, handles.

Copyright October 1996, Crain Communications Inc.

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