The Chinese Motorcycle Manufacturing Industry

There's also this item, which I've already filed in the Jialing JH600 Stalling thread:

China Motorcycle Industry Faces Headwinds


February 6 -- China maintained its position as the world's largest motorcycle market for the 18th consecutive year in 2011 when it recorded 1.21 percent and 1.32 percent year-on-year increases in motorcycle production and sales to 27.01 million and 26.93 million units, respectively, reports Securities Daily, citing the China Association of Automobile Manufacturers.


Despite the gains made last year, the industry was facing huge operating pressures, with total profits down 20 percent from a year earlier to 2.7 billion yuan. This led to motorcycle manufacturers seeking new sources of earnings.


The Chongqing municipality is the base of the motorcycle industry in China, accounting for 33.51 percent of the total industry patents, according to the report.


China Jialing Industrial (600877), a leading Chongqing-based manufacturer of motorcycles, recently issued a profit warning.


The company is forecasting a 2011 loss of 216 million yuan as it was affected by falls in the prices of passenger cars, the ban on motorcycles in some Chinese cities, and a rise in operating costs.


An unnamed analyst at a local brokerage attributed the difficulties faced by Jialing Industrial to the fact that it only has a single product and thus has limited ability to counter market risks. Sales of motorcycles and related parts accounted for 99.98 percent of the company's revenue.


The probability of Jialing Industrial achieving a breakthrough in its optical component business in the short-term is low, according to the report.


The company could increase exports in order to improve its operating performance, said an industry analyst.


However, an employee handling Jialing Industrial's international business, Zhu Xiaoman, said yuan appreciation had a negative impact on exports to the target markets of Africa and South America.


During the first half of 2011, the company generated revenue of 252.66 million yuan from exports, accounting for 19.2 percent of the total. The poor export performance was a major contributor to the Jialing Industrial losses.


According to the report, exports accounted for more close to 50 percent of the revenue earned by industry peer Linhai (600099) in the first half of 2011.


Shares of China Jialing Industrial were unchanged to trade at 5.08 yuan per share at 14:43 today.


Copying prohibited without publisher's permission
© CapitalVue/Capital Epoch 2008-2010.

I sort of struggled with the analyst recommendations that Jialing diversifying its holdings. Were do the holdings groups begin and end? Isn’t Jialing a manufacturing entity within a holdings group, that being South China? I also struggle with them being labeled as one dimensional since they manufacture small engine products for Honda.

Qianjiang motorcycle is part of Qianjiang Holdings, Loncin Motorcycle is part of Loncin Holdings. Both of these holdings groups have motorcycle manufacturing in their portfolio and their’s have both had positive growth in production were Jialing has declined in production.

Apples to apples oranges to orange and related rules in analysis. The issue is that of the entity at its smallest part and its related operating efficiency in the market. It is possible that all of the motorcycle divisions are loosing capital, certainly China South has entities that are incurring loses. Jialing and Qingqi both are losing capital. The later was rearranged as a group within a group and that does nothing if their primary functions are not competitive and improving in their competencies.

Holding groups typically sell off their poorest performers, they can also restructure management within them. But they require positive capital flows to move forward, action plans must be formed and then embraced by those above. Mitigating losses by diversification can be nothing more then throwing good money at what is inherently bad.

Jialing is being displaced by creativity and the aggressive efforts of others and if Jialing does not progress they will be left behind. If they need capitalization then its their holding group that must see that and for them to see that they must have some vision or at least provided with one and some evidence that the forecast and prescribed effort is good.

Dear MJH,

You are completely missing the point. Jialing is owned by the state, and has its roots in military ordnance and supply. It is directed by a C*mmunist P*arty committee, not a market-minded board of directors. Its managers will do anything to please their superiors, who care only about pleasing their superiors. The path to promotion is to make your boss look better to his bosses. When the top bosses are party apparatchiks, the only thing that matters is party fealty. This has nothing to do with happy (or angry) customers, never has and never will.

Do not hold your breath expecting a company like Jialing (or any of the other state owned enterprises) to suddenly start thinking rationally about how to succeed in the market. It does not matter to them at all. They do not give a flast flying fluck.

That said, I'm hoping to meet some very senior Jialing brass soon, and will give them the benefit of the doubt, and explain to them what I think they should be doing to improve their market performance and reputation with customers -- and would-be customers. They probably won't listen, since their masters are apparatchiks (see above), but I'm willing to give it the old college try. If they bite, I'll be looking you up!

cheers!

Let me know when you get them ready I will get the attorneys to draft some letters of intentions.

September 1, 2010 the inaugural Chinese motorcycle motorcycle Trend magazine "Top Ten best-selling models." Contest came to an end, the contest named utility vehicle class of the Chinese motorcycle market and fans car class top ten best-selling models. "
● selection results [Practical EMU] (in alphabetical order)

Roger Dubuis "Silver Leopard" series (HJ125-7D) Grand River Group Co., Ltd.
Haojue Wyatt crown "series (HJ150-6) [Grand River Group Co., Ltd.]
Qianjiang "smooth running" (QJ125-1979) [Zhejiang Qianjiang Motorcycle Co., Ltd.]
Jinan Suzuki Seitz (QS110) Jinan Qingqi Suzuki Motorcycle Co., Ltd.]
Jinan Suzuki Chun Chi (QS150T-3), Jinan Qingqi Suzuki Motorcycle Co., Ltd.]
New Honda mighty "SDH100,-41 Sundiro Honda Motorcycle Co., Ltd.]
Jialing "lone wolf" (JH125-F) [China Jialing Industrial Co., Ltd. (Group)]
Jinan Qingqi Yue Sheng "(QM125T-10R) [Jinan Qingqi Motorcycle Co., Ltd.]
Wuyang - Honda Jiaying 125 Wuyang - Honda Motors (Guangzhou) Co., Ltd.]
Wuyang - Honda Priority Club 110 "Wuyang - Honda Motors (Guangzhou) Co., Ltd.]
[Fans car group] (in alphabetical order)
Haojue Suzuki sharp cool to EN Series Grand River Group Co., Ltd.]
The Haojue Suzuki "Ruby" UM125T Grand River Group Co., Ltd.]
"Hawk", the new Honda CBF150 Sundiro Honda Motorcycle Co., Ltd.]
Jinan Suzuki Denway (QS125-3E) Jinan Qingqi Suzuki Motorcycle Co., Ltd.]
Wuyang - Honda front wing 125 Wuyang - Honda Motors (Guangzhou) Co., Ltd.]
Yamaha "Sword" (YBR125) Chongqing Yamaha Jianshe Motorcycle Sales Co., Ltd.]
Yamaha "Tour Eagle (ZY125T-4) [the Zhuzhou Yamaha Jianshe Motorcycle Sales Co., Ltd.
Xinyuan "Long March" (XY200GY-7) [Xinyuan Motorcycle Co., Ltd.]
Spring "V3" Zhejiang Chunfeng Power Co., Ltd.]
Wangjiang Suzuki GN250 "Chongqing the Wangjiang Motorcycle Manufacturing Co., Ltd.

July 2, from the "Motorcycle Trends" magazine hosted the second "Top Ten Chinese motorcycle engine" selection results in the 2011 China International Motorcycle and Parts Fair site announced, seven motorcycle business 10 section models won the 2011 "Top Ten Chinese motorcycle engine" award.
The ten award-winning engine are: Chongqing Jianshe Motorcycle Co., Ltd. production YBF110 engine, equipped with model building JS110-5 "K8" racing version; Chongqing Jianshe Motorcycle Co., Ltd. production YBF139 engine, equipped models for the Construction JS125-7A "Jun Style"; Grand River Group Co., Ltd. production UM engine, equipped models to Haojue Suzuki "Ruby"; Jinan Qingqi Motorcycle Company Limited production GR150 engine, equipped with models of scooters QM150GY- C "war mastiff"; Jinan Qingqi Suzuki Motorcycle Co., Ltd. production GSX engine (QS157FMI-3A), equipped with a model for the Suzuki GSX-QS125-3H "BIRDIE"; Lifan Industry (Group) Co., Ltd. produced water NBF engine (LF158MJ), equipped with models of Lifan LF150-9M "New Street Fighter"; Sundiro Honda Motorcycle Co., Ltd. production of CBF vortex combustion engine (SDH152FMI-A), equipped with a model for the Honda CBF150 "Hawk"; Sundiro Honda motorcycle manufactured by CB refined combustion engine (SDH152FMI-2), equipped with models of the Honda CB125 "Rui Biao"; Sundiro Honda Motorcycle Co., Ltd. production Jinmeng engine (SDH1P50FMH), equipped with Honda cars for PLIM "Gone with the Wind Yue" (SDH110-16); China Jialing Industrial Co., Ltd. (Group) produced 158FMJ (097) engine; equipped vehicle for the Jialing "new lone wolf."

2011 the year of the second batch of motorcycle up to the National III emission standards

http://www.bjepb.gov.cn/portal0/default.htm

These are the motorcycle I would like to see coming out of china, all could be manufactured with engines already in production, however they should be configured with EFI to meet all emission standards in all global markets.


Suzuki Grass Tracker (172FMM)
http://i784.photobucket.com/albums/y...1073001000.jpg
Honda CB200T (253FMM)
http://i784.photobucket.com/albums/y...t/1df78580.jpg
Yamaha SRV250 (2V49FMM)
http://i784.photobucket.com/albums/y.../image-356.jpg
However all of the listed engines have compliant versions already being offered in the USA, if manufactured initially with carburetors they could be sold in the USA and meet emissions. However to be offered in China they would need to meet stricter standards.

Chinese 2011 total exports 10,744,684 units

Claimed value of those exports 510,570.70
Amount of foreign exchange (million U.S. dollars)
$510,570,700.00/10,744,684=$47.52 average value?

When dollars are represented in million…every 1,000 equals 1,000,000, the value of the export have to be more then 510 Million dollars as represented, they are more like $5,105,707,000 or an average of $470.52 per unit.

The use of a decimal in dollars is only acceptable in representing a fraction of a dollar, if it is to be used as a fraction of the hundredth place, as it appears to be here, then .70 become 700 or 70% of 1000.

The correct representation in million would be 5,105,707 which then elevates the last 000 and adds them back when calculating the actual real value of roughly 5.1 billion dollars.

Obviously the average export unit is not forty seven dollars and likely is about four hundred to five hundred dollars.

For the year 2011 China exported 516, 335 unit between 150cc and 250cc

They represent the dollar value in the table of the above as 38168.94 which must really be $381,689,400 or on average $739.29 per unit.

The class 150<250cc have experienced a 88% growth over 2010 exports.

HERE is the table translated.

Quote:

---

Originally Posted by MJH

...
$510,570,700.00/10,744,684=$47.52 average value?

When dollars are represented in million…every 1,000 equals 1,000,000, the value of the export have to be more then 510 Million dollars as represented, they are more like $5,105,707,000 or an average of $470.52 per unit.
...

---

Common problem with big numbers in China - one digit less or too much - china doesn't follow the 000.000.000 for big numbers - after the thousands 1.000 the have the WAN 10.000's.
Leads to confusion for all numbers bigger then 10.000 - havent seen any interpreter struggeling with this yet.
Always check your numbers when dealing with Chinese!

FYM 5R Motors (GUANGZHO) Co., Limited
Guangzhou Panyu Huanan Motors Group

http://www.5rmotor.com
http://www.hnmoto.com



Same company has more then one website, not ideal.

Huanan Group

Not entirely sure how big this group actually is but they may actually be one that includes, I believe Wuyang - Honda Motors (Guangzhou) Co., Ltd.
http://en.wuyangmotor.com/newEbiz1/E...tml/index.html

Wuyang ranks 12th in overall sales for 2011 with 900,099 units. They however the two are listed under different names.

15th Panyu 213,293 units and 20th overall with 368,805 units
22nd Wuyang 167,491 units and 12th overall 900,099 units.

Not sure but I think that this group in particular is very large, if it is some how associated with Guangzhou Jin Hao Motorcycle Co., Ltd is unclear…there may be some redundant counting of sales. Jin Hao is listed at 4th largest exporter with 585,682 unit and 14th in overall sales at 695,758, for being that large it is not visible in its marketing.

Then there is Guangzhou Motors Group Company also listed at 23rd with 358,928 total sales. Which list Wuyang on its website….it begins to looks like sales counts may be redundant.
http://www.gzmotors.com/english/subordinate.jsp?cid=353

Total Production…February 2012 year to date, comparing changes over each year.
3,738,304 2011
4,101,730 2010
-8.86

3,443,053 2012
3,738,304 2011
-7.90


That’s a trend, it did not just occur over the past two years its been happening since 2009.
-16.058 % drop between 2010 and 2012, that is a serious drop in production, down 658,677 units.

First two months of Production 2012


The first two months of 2012 show a loss of 19.85 in total exports over the same two months last year.

First two month Exports 2012


Not every manufacture showed decreases, though many continue the attrition. Jiajue had a nearly a 400% increase in its exports, they exported 299 for the first two month of 2011 and 1491 for the same period this year. That brought Jiajue into the top 50 exporter? That is the company that is offering the DOHC 26hp 250cc water cooled sport bikes, called the Motrac 250. http://www.jiajue.comhttp://www.jiajue.com/uploadfiles/pr...1113342175.JPGThey are also offer those with believe it or not a 50cc 4-stroke, 125cc, 200cc as well as the Yingang Honda NX250 cloned engine.50cc versionhttp://www.jiajue.com/uploadfiles/pr...1214352589.JPG

Sundiro Honda Motorcycle Co., Ltd.
Gained 20% in overall production and 24% in its exports.
Not every manufacturer is shrinking……

Chongqing Jianshe Motorcycle Co., Ltd.
lost 9% in production and gained 9% in exports.

China Jialing Industrial Co., Ltd. (Group)
Lost 26% in production and had no change in export over last year with 0%.

Wuyang - Honda Motors (Guangzhou) Co., Ltd.
Gained 38.26 in production and 37.98 percentages in total exports.

Jinan Qingqi Motorcycle Co., Ltd.
Gained 32% in exports and lost 26% in total production.

The thing is this the ideal in manufacturing is being at or close to the capacity in production, that reduces the per units fixed cost of the operations. Even though making more cost more in material it cost less in labor and other related fixed costs. Running at or near capacity is optimal, that also has to do with the recovering of the initial investments. That is because if they overbuilt then the idled labor, machinery and facilities does not generate capital.

Linear Functions

The big grower Zhejiang Taizhou Wangye Power Co., Ltd.
of 2011 grew another 28% in production in the first two months of 2012.
and had another 61% growth in its exports.


http://www.wangyemotor.com/

They manufacture the three main models:
the CG125
http://www.wangye.com.cn/upfiles/-mainWY125l.jpg
GS125
http://www.wangye.com.cn/upfiles/-mainwy125-6l.jpg
GN125
http://www.wangye.com.cn/upfiles/-mainwy125-9-6l.jpg
As well as a line of scooters….
http://www.wangye.com.cn/a-motor-bicycle/125.html

There is no doubt that the biggest losses in production, mean huge losses in capital. Not a mater of making profits those that have had huge drops in production and had just enlarged or improved their facilities have the greatest looses in capital.


That is new perhaps to China, what to do when the growth stops?


In a free market, typically it leads to bankruptcy and liquidation of assets.

The site offers a periodic snapshot of what is being manufactured and has the results sorted by displacement.


You might guess that with the introduction of some midrange models that we would see growth in that segment over last year. Not the case though, production of over 400cc<750cc actually dropped for the first two month of 2012 compared to the first two months of 2011.


Dropped 69% from 597 units produced in the first two month of 2011, to 185 units for the same period 2012. The actual sales of this range fell 75% from 2011, only 109 units sold for the first two months of 2012, compared to 448 for 2011.


The site does not offer any statistics on imports and it really should.


The 250 to 400cc production increased by 489% for 2012 over 2011, from 89 units to 495 units. I am fairly sure that the only model that is 250cc and approved for domestic sale would be the GW250,Qingqi 250 and YBR250. At that rate barely 3,000 units are produced annually in that class?


http://www.chinamotorcycle.com/ShowN...6789858_1.aspx




The 150 to 250 class produced 94,000 up 25%
125 to 150 550,000 up 6.9%

You can get an MV Agusta in china the F3 sells for 188,000 RMB or about 30k American.


http://www.china.mvagusta.com/


The F3 sells in Europe for 11,990 Euros or about 15k American, that includes a 20% VAT.


That’s a niche market, a special team of people that cater to very few, do they offer a free Armani sport coat with the bikes? Seriously is it all tariff or is it just profiteering or both.


The Chinese duty on a 501cc to 800cc motorcycle is 40% on the CIV which includes the freight costs and then another 17% is added on as a VAT….about 67% of that markup is taxes and the other 33% is the distributor markup at just under $10,000 American?


http://www.dutycalculator.com/popula...orcycle-parts/




Buying one at such a premium does not represent anything flattering….not really.