The Escorts - Yamaha Motors Break-Up

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BSTR008 For delivery in electronic format: Rs. 200;
For delivery through courier (within India): Rs. 200 + Rs. 25 for Shipping & Handling Charges


Joint ventures strategic alliances
Case Length : 7 Pages
Period : 1985-2001
Pub. Date : 2002
Teaching Note : Available
Organization : Escorts, Yamaha Motors
Industry : Automobile & Automotive
Countries : India


The case traces the various developments from the time the joint venture took place till the breakup in 2000. In 1995, Escorts and Yamaha Motors formed a 50:50 joint venture (EYML). From 1995 to early 2000, EYML took several steps to become the number one player in India's two-wheeler market. However, in mid 2000, Escorts divested 24% equity to Yamaha Motors and as a result, Yamaha Motors became a majority stakeholder in the venture (74:26). In May 2001, Escorts sold its remaining 26% equity, thus, exiting from the joint venture. The case is intended for MBA/PGDBM level students as part of the Business Environment curriculum. From the case students are expected to understand why Escorts pulled out of the joint venture and how this move is going to affect Yamaha Motors.

Students can also discuss Escorts new business initiatives and examine how the company is placed to succeed in new economy businesses. This case will also enable students to understand the structural changes in the two wheeler market in India.


Diversification into unrelated business by one of the partners, Problems in the Joint venture due to the external environment


  Page No.
Introduction 1
Two Wheeler Industry in India 1
Escorts, Yamaha Tie the Knot 3
The Honeymoon 3
The Honeymoon is Over 4
The Divorce 5
The Road Ahead 5


2000, 1995, Escorts, Yamaha Motors, 50:50, EYML, 24%, equity, 74:26, May 2001,26%, Business Environment

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