The Chinese Motorcycle Manufacturing Industry

[dy245000]

I have some motorcycle product numbers to share.

(Original in Chinese) July 8, 2011: in the Chinese Automobile Industries Manufacturing Committee's monthly meeting report, there were numbers from Motorcycle Manufacturing Industry as well. According to the reporter, the numbers for domestic motorcycle sales is in steady decline while exports of motorcycles has created to an all time high for June, 2011.
Sales of motorcycle domestically was 2,320,800 units in June, a decline of 1.25% from May, 2011. A decline of 13.95% from the same period last year. Sales of two wheeled motorcycles were 2,114,600 units and the rest were three wheeled motorcycles.
First half of 2011 sees a sales of 11,959,600 units of two wheeled motorcycles, a decline of 9.98%( comparing to last half of 2010, I assume). Sales of three wheeled motorcycles were 1,167,700 units, an increase of 10.39%.
Other than a decline of sales, all the major indecators were in decline as well.
Of the 104 Chinese Motorcycle manufacturers, they produced RMB500,140,000,000 worth of motorcycles from Jan.-May, 2011. a decline of 0.86% (did not say comparing to what period). Sales was RMB505,720,000,000, and increase of 0.49% (again, did not say comparing to what period). Profits were RMB12,280,000,000, a decrease of 32.58% (again, did not say comparing to what period or my Chinese is not good enough to understand-同比下降32.58%).
Under the soft domestic market for motorcycles, the motorcycle manufacturers were all increasing their export business. There were 4,921,800 units exported during the first 6 months of 2011, an increase of 26.57%, with an all time high of 995,500 units in June, 2011, an increase of 8.77%. The last all time high was in August, 2008.
I am pretty bad with the big numbers, I donot deal with them too much. The Western World use 1K as base unit while the Chinese uses 10K. Therefore, I may be off by a factor of 10. I did go through these numbers more than twice.
Am I reading this right, the "bike free guys" in China are winning while the reset of the world is moving from cars to motorcycles?
I know that some bike manufacturings are not investing to get a C3 certfication for their dirt bikes. It is not worth their while, they only sold a few when it was C2.
This is a bad trend, we all need to go out and buy new bikes to support the bike manufacturing industry and domistic sales. I've done my part, I order a new Shineray250 with C3 certification. It should be here in two weeks or so.

http://www.flickr.com/photos/10364858@N00/6238187470/

[euphonius]

I have some motorcycle product numbers to share.

...
Sales of motorcycle domestically was 2,320,800 units in June, a decline of 1.25% from May, 2011. A decline of 13.95% from the same period last year. Sales of two wheeled motorcycles were 2,114,600 units and the rest were three wheeled motorcycles.
First half of 2011 sees a sales of 11,959,600 units of two wheeled motorcycles, a decline of 9.98%( comparing to last half of 2010, I assume). Sales of three wheeled motorcycles were 1,167,700 units, an increase of 10.39%.

Dear David,

Thanks for posting. These numbers, though seemingly in decline, are staggering! Jialing's website claims a production capacity of 2 million bikes a year, though surely a good portion of those are exported. Though Jialing's news site in English is filled with tantalizing tidbits, it's not filled with hard facts.

But that number above noting that 2.1 million of the 2.3 million bikes sold in June were two-wheelers surely reveals an amazing statistic for Jialing, since the remaining bikes sold that month are described as three-wheelers and, to my knowledge, only Jialing makes a modern production sidecar bike, the JH600B. If there is no competitor, that means that Jialing sold 206,200 600B models in that one month alone! Again, this report does not differentiate between domestic and export sales, but that's quite a number regardless!

Incidentally, I notice Jialing's site now allows you to read it in Spanish, French and even Arabic in addition to English and Chinese!

Damn, I wish they'd spend as much effort on domestic marketing as they do in global marketing, which one of their news items describes as a "counter-offensive war".

I wish they'd declare war on stupid and discriminatory government policy at home in China!

By the way, can you post a link to the Chinese version of the news item you've posted above? Thanks!

Oh, and tell us more about this C3-compliant Shineray 250. Have you seen actual certification that it meets China3 emissions requirements? And didn't you have some other bike previously? A Galaxy? What happened with that?

cheers

[MJH]

Here is a respectably questionable link that offers some insight into the Chinese motorcycle industry.
Translated with Google,so you have to read through the broken English.


http://www.chinamotorcycle.com/

May 2011 sales Motorcycle Industry Overview
Source: China Association of Automobile Manufacturers

May, the motorcycle industry sales continue to run low, production and sales chain and are down year on year; 1-5 months, industry-wide sales of more than 10 million motorcycles, up showing some decline.

May the whole situation, complete the motorcycle industry-wide sales 2,310,400 and 2,292,300, down 2.99% and 0.78%, down 17.29% and 11.86%, of which: two motorcycle sales 2,100,900 and 2,089,500, a decline of 3.28% and 0.63%, down 18.83% and 12.89%; three sales of 209,400 motorcycles and 202,800, approximately the same output with the previous month, sales declined slightly, sales were up by 2.16% and 0.46% .
January to May, the industry completed motorcycle sales exceeded 10 million, to 10,768,300 and 10,777,900, down 9.80% and 7.79%, of which: two motorcycle sales 9,811,600 and 9,829,500, an down 11.39% and 9.20%; three sales of 956,600 motorcycles and 948,400, an increase of 10.56% and 9.77%. Tricycle sales performance was better than two-wheeled vehicle.

Details of two May motorcycle, the motorcycle models in two varieties, cross bike still had a high proportion of scooter production and marketing chain showed some growth. In May, sales of 1.274 million across the bike and 1,262,900, down 6.22% and 4.19%, down 19.15% and 8.57%; Cub sales 504,600 and 501,500, a slight decrease production chain, sales slight increase, sales were down 11.61% year on year and 15.07%; scooter sales 322,300 and 325,100, growth of 7.40% and 12.39%, down 22.65% and 19.67%.

Details of three-wheeled motorcycle May, all models in the three varieties of motorcycles, three-wheeled motorcycle absolute share month of sales 208,400 and 201,700, approximately the same output with the previous month, sales declined slightly, slightly year on year sales growth. In May, sales of general cargo tricycles and 118 500 123 700, representing total sales are tricycle 59.34% and 58.76%; ordinary passenger tricycle sales 84700 and 83200, are accounted for 40.64% of total sales tricycle and 41.23%.

January to May, general cargo tricycle sales 562,300 and 556,500, an increase of 15.70% and 13.89%, which 100ml <displacement = 150ml sales 394,800 and 392,000, accounting for freight tricycle 70.22% of total sales and 70.44%. Sales of 390,800 ordinary passenger tricycle and 388,300, an increase of 37.70% and 38.79%, which 100ml <displacement = 150m1 sales 246,800 and 245,100, accounting for total sales of passenger tricycle 63.15% and 63.13%.

Motorcycle Enterprise (Group) of May, sales of the top ten motorcycle Enterprise (Group) for the Grand River, Loncin, Lifan, northern enterprises, construction shares, Zongshen, Guangzhou Grand Canal, silver Xiang, Qianjiang and new continents Honda, sales were 189,900, 175,700, 155,000, 133,900, 116,100, 115,300, 88300, 83000, 78900 and 75900. Compared with the previous month, in addition to sales growth in three companies, the other seven companies decreased to varying degrees; compared with last year is still three up 7 down, in which the Yangtze River, north of Enterprise, Construction Company and Qianjiang four business sales declined more significantly, a decline of more than 20%. In May, the 10 companies total sales of 1.2119 million, accounting for 52.87% of total motorcycle sales.

[dy245000]

These numbers, though seemingly in decline, are staggering! Jialing's website claims a production capacity of 2 million bikes a year, though surely a good portion of those are exported. Though Jialing's news site in English[/URL] is filled with tantalizing tidbits, it's not filled with hard facts.
But that number above noting that 2.1 million of the 2.3 million bikes sold in June were two-wheelers surely reveals an amazing statistic for Jialing, since the remaining bikes sold that month are described as three-wheelers and, to my knowledge, only Jialing makes a modern production sidecar bike, the JH600B. If there is no competitor, that means that Jialing sold 206,200 600B models in that one month alone! Again, this report does not differentiate between domestic and export sales, but that's quite a number regardless!
Damn, I wish they'd spend as much effort on domestic marketing as they do in global marketing, which one of their news items describes as a "counter-offensive war"[/URL].
I wish they'd declare war on stupid and discriminatory government policy at home in China!
By the way, can you post a link to the Chinese version of the news item you've posted above? Thanks!
Oh, and tell us more about this C3-compliant Shineray 250. Have you seen actual certification that it meets China3 emissions requirements? And didn't you have some other bike previously? A Galaxy? What happened with that?
cheers

Yes, I don't think MCM members know how big the Chinese bike market is. I sure the hell didn't.
Remember, Jialing's only one of the 104. It's a big one, but still.......
The three wheeled motorcycles I was referening to were those with two wheels in the back and one in the front, not the side cart type, although I have seen and rode in some very nice custom made side carts in Philipines attaching to two cycle 125cc motorcycles.
Seems like the Chinese use the three wheeled motorcycles for everything, from moving cargos in whole sale markets, to pasenger transportation on remote islands and everything else in between. They are not legal here, but that don't stop them from using them. They are legal in some other places. I rode in one with 5 other people a few weeks ago and I am fat, by US standard. They even put a backup level in them, very handy. Shineray has up to 350 water-cooled engines for them and other manufacturer have even bigger ones. I saw, more than once, three wheeled trucks. Yes, you heard it right, full size, 5 ton trucks and overload. I'll see if I can find a picture for you.
Like everybody else, they go where the money is. That's the way of life.
Since it is a one party government, I would not be very supprised to see bikes back in bike free cities like GuangZhou in the future. They can give it back as easy as they can take it away, but may not be in our life time.
I'll try to find the Chinese post again and send it to you. I copied it for easy translation, I'm running multiple screens.
No, I have not actually seen this C3-compliant Shineray 250 yet nor seen the C3 certificate. I just ordered it with the other Chinese bikers, safety in numbers, at least there will be 39 other fools with me.
The Galaxy SUV250? I am riding it with the others, but I am still waiting for your advice.
David

[dy245000]

Hi, MJH, greetings.
I think I got the June 2011 figures from the same source, although yours are more detailed. I didn't understand the two figures format, so I just post one and the corresponding percentage.
David

[Lao Jia Hou]

Great thread, thanks David

I'd offer a couple of comments on the numbers. One of my "retirement jobs" is managing an investment fund and, for personal interest reasons, I've been looking at the motorcycle industry in China. I've had a couple of researchers looking into a few things that you touch upon.

One of the many reasons why domestic sales have been recently declining is the maturity of a purchase-incentive-program the government had for rural residents (i.e., farmers). This rebate program created a significant bump in sales during 2010, but it has largely run its course (hence, the statistical decline in sales). The majority of domestic sales is in rural China, for small, inexpensive two-wheeled motorcycles (Jialing's bread & butter).

Another reason, which city dwellers certainly notice, is the love affair with the automobile. But urban residents have always been a small proportion of overall domestic motorcycle sales. The impact of the automobile on urban motorcycle sales is actually quite negligible. Where the auto may show up is in the "upgrade" phenomenon. Motorcycle manufacturers have historically relied on entry-bikes leading to the subsequent purchase of an upgraded model (and one which is more profitable). In China, however, it is likely that the farmer-bikes may be upgraded to QQ-style autos.

Drilling down into the rural-urban split, however, one sees that larger displacement motorcycles (quite profitable) are overwhelming purchased by urban residents. Small displacement bikes have tiny margins and a manufacturer/dealer needs huge volumes. Unfortunately, subsequent to the rebate program, volume is down and there is a significant adjustment in the Chinese dealer network going on, with many smaller shops selling smaller bikes simply closing their doors. The pie is getting smaller, and a few of the larger shops are consuming larger portions of it. The pie is also changing its filling - profitability is now coming from larger, recreational motorcycles.

I recall reading an article that looked at the ratio between what customers spend on a new bike purchase, and what the customers spend on all of the aftermarket goodies. For small displacement bikes, the ratio was tiny. For large bikes (e.g., Harleys & BMWs), it was staggering. Harley, better than anyone, understands this perfectly. Get someone on a Sportster, and watch that customer's weekly salary be spent on customizing it. Then in a year, or two, upgrade the Sporty to a Dyna, and start the process over again. And, of course, also offer a full clothing line!

I came across some stats about the 3-wheeled vehicles, and discovered what you said is very true - the overwhelming majority of the 3-wheel sales are for tricycle-type vehicles/trucks. The sales number for sidecar motorcycles was microscopic. I forget the exact number, and it is not easily at hand, but it was something like less than a few thousand for all of 2010. Sidecars are a tiny, tiny, tiny market.

From what I have been reading about the North American market, the motorcycle industry is in very serious trouble. Sales throughout 2009, 2010 and again in 2011 have been plummeting. Unlike the craziness of the 80s and 90s, where having a Harley dealership ensured instant riches, many Harley dealers are now being forced to close their doors. Sales for 2010 in North America are less than half the sales of 2007. Preliminary reporting suggests 2011 will continue this downward trend.

What appears to be picking up overseas is the sales of fuel efficient scooters & small displacement commuters. Only BMW is bucking the trend with its large displacement bikes.

Almost all of the investment-based articles relating to the motorcycle industry that come across my desk focus on two things:

1) changing customer profiles;
2) disbelief & guffaws by the manufacturers.

Like the American auto industry in the 1970s, there is an arrogance with many motorcycle manufacturers & its dealer networks. They are refusing to recognize the reality that today's customers are interested in a different type of motorcycle. It is no longer a case of "they will buy whatever we produce." For example, again, as was experienced by Harley during the 80s and 90s in the USA.

All said, I still maintain a positive outlook for the Chinese motorcycle industry. The Chinese have proven, time and again, an immense ability to adapt. If you place a 1990s Chinese motorcycle against a 2010 Chinese motorcycle, the changes are mind-boggling. I am confident that the Chinese motorcycle in 10 years will be light years away from the current offerings.

On a personal note, having owned both the CJ750 (in various forms) and the JH600B, I can see the incredible differences. It reminds me of the difference between an AMC Gremlin/Pacer and a Honda Civic/Accord. The "B" ain't perfect, yet, but at least its parts stay attached to the bike.

[MJH]

Motorcycle export (cumulative) as of July 2011, Total exports: 5,978,140 (+29% over same period 2010)

1) Chongqing Loncin Motorcycle Co., Ltd. 542 274 (+15%)
2) Lifan Industry (Group) Co., Ltd. 529 904 (+95%)
3)Zongshen Industrial Group Co., Ltd. 402 082 (+83%)
4)Motorcycle Co., Ltd. Guangzhou Jin Hao 353 499 (+33%)
5)Chongqing Yinxiang Motorcycle 326 037 (+21%)
6)Jincheng Group Co., Ltd. 249 100 (+22%)
7)Motorcycle Co., Ltd. 247 858 (+37%)
Guangzhou Grand Canal
8)Grand River Group Co., Ltd. Jiangmen 233 938 (+37%)
9)Chongqing Bashan Motorcycle 189 199 (+22%)
Manufacturing Co., aerospace
10)Sundiro Honda Motorcycle Co., Ltd. 156 625 (+50%)
11)Qianjiang Group Co., Ltd. 154 374 (+61%)
12)Chongqing Jianshe Motorcycle Co., Ltd. 153 533 (+4%)
13)Guangzhou Tianma Group 150 407 (+1%)
Tianma Motorcycle Co., Ltd.
14)China Jialing Industrial Co., Ltd. (Group) 123 972 (-14%)
15)Chongqing Motorcycle Co., Ltd. Xinyuan119 610 (+12%)
16)Hao Jian Guangzhou Panyu 118 722 (+20%)
Motorcycle Industry Co., Ltd.
17)Group Co., Ltd. 110 075 (+24%)
Guangdong Yinhe Motorcycle
18)Heshan National Motorcycle 99916 (+4%)
Industry Co., Ltd. Winsor machine
19)Luoyang Northern Ek Chor 98530 (+71%)
Motorcycle Co., Ltd.
20)Daye Motorcycle Technology Co., 98353 (+66%)
Ltd. of Guangdong

Top 20 Exporters

[MJH]

Total production:
As of July 2011
15,340,212 (change from same period 2010) (-8.8%)

1) Grand River Group Co., Ltd. Jiangmen (-30%) Production of 1,351,618
2)Chongqing Loncin Motorcycle Co., Ltd. (+1%)
3)Lifan Industry (Group) Co., Ltd. (-4%)
4)Luoyang Northern Enterprises Group Co., Ltd. (-13%)
5)Zongshen Industrial Group Co., Ltd. (+3%)
6)Chongqing Jianshe Motorcycle Co., Ltd. (-20%)
7)Luoyang Northern Ek Chor Motorcycle Co., Ltd. (-13%)
8)Motorcycle Co., Ltd. Guangzhou Grand Canal (-5%)
9)Chongqing Yinxiang Motorcycle (+21%) “” 565,966
10)China Jialing Industrial Co., Ltd. (Group) (-17%)
11)Qianjiang Group Co., Ltd. (-14%)
12)Wuyang - Honda Motors (-3%)
13)Sundiro Honda Motorcycle Co., Ltd. (-13%)
14)Motorcycle Co., Ltd. Guangzhou Jin Hao (+22%)
15)Jincheng Group Co., Ltd. (+16%)
16)Guangzhou Motors Group Company (-49%)
17)Long Motorcycle Industrial Co., Ltd. Jinan (+8%)
18)Chongqing Bashan Motorcycle (+30%)
19)Guangzhou Tianma Group (+3%)
Tianma Motorcycle Co., Ltd.
20)International Heavy Industry Co., Ltd. LOVOL (-2%)
*
*
*
26)Jinan Qingqi Motorcycle Co., Ltd. (-28%)
*
*
*
31)Group Co., Ltd. Guangdong Yinhe Motorcycle (+24%) production of 116,075


Sources; China Association of Automobile Manufacturers

(I left off most of the actual production numbers…you can pretty much guess the production numbers based on rankings)

[MJH]

Sunduro dropped 12% of production over last year and gained 50% in it export sales.

2010 production 522,371 compared to this year 461,228, loss of 61,143
Exported 156,625 up 50% over last year and increase of 78,312


2010
522,371 total production and 78,312 went to exports leaving 444,059 for domestic sales.
2011
461,228 total production and 156,625 went to exports leaving 304,603 for domestic sales

That is a loss of 31% in domestic sales from 2010 to 2011, they mitigated that loss with the increase in exports.

But not everyone took that approach…others increased in the domestic market and shrank exports.

[dy245000]

One of the many reasons why domestic sales have been recently declining is the maturity of a purchase-incentive-program the government had for rural residents (i.e., farmers). This rebate program created a significant bump in sales during 2010, but it has largely run its course (hence, the statistical decline in sales). The majority of domestic sales is in rural China, for small, inexpensive two-wheeled motorcycles (Jialing's bread & butter).

Another reason, which city dwellers certainly notice, is the love affair with the automobile. But urban residents have always been a small proportion of overall domestic motorcycle sales. The impact of the automobile on urban motorcycle sales is actually quite negligible. Where the auto may show up is in the "upgrade" phenomenon. Motorcycle manufacturers have historically relied on entry-bikes leading to the subsequent purchase of an upgraded model (and one which is more profitable). In China, however, it is likely that the farmer-bikes may be upgraded to QQ-style autos.

Drilling down into the rural-urban split, however, one sees that larger displacement motorcycles (quite profitable) are overwhelming purchased by urban residents. Small displacement bikes have tiny margins and a manufacturer/dealer needs huge volumes. Unfortunately, subsequent to the rebate program, volume is down and there is a significant adjustment in the Chinese dealer network going on, with many smaller shops selling smaller bikes simply closing their doors. The pie is getting smaller, and a few of the larger shops are consuming larger portions of it. The pie is also changing its filling - profitability is now coming from larger, recreational motorcycles.

I recall reading an article that looked at the ratio between what customers spend on a new bike purchase, and what the customers spend on all of the aftermarket goodies. For small displacement bikes, the ratio was tiny. For large bikes (e.g., Harleys & BMWs), it was staggering. Harley, better than anyone, understands this perfectly. Get someone on a Sportster, and watch that customer's weekly salary be spent on customizing it. Then in a year, or two, upgrade the Sporty to a Dyna, and start the process over again. And, of course, also offer a full clothing line!

I came across some stats about the 3-wheeled vehicles, and discovered what you said is very true - the overwhelming majority of the 3-wheel sales are for tricycle-type vehicles/trucks. The sales number for sidecar motorcycles was microscopic. I forget the exact number, and it is not easily at hand, but it was something like less than a few thousand for all of 2010. Sidecars are a tiny, tiny, tiny market.

From what I have been reading about the North American market, the motorcycle industry is in very serious trouble. Sales throughout 2009, 2010 and again in 2011 have been plummeting. Unlike the craziness of the 80s and 90s, where having a Harley dealership ensured instant riches, many Harley dealers are now being forced to close their doors. Sales for 2010 in North America are less than half the sales of 2007. Preliminary reporting suggests 2011 will continue this downward trend.

What appears to be picking up overseas is the sales of fuel efficient scooters & small displacement commuters. Only BMW is bucking the trend with its large displacement bikes.

Almost all of the investment-based articles relating to the motorcycle industry that come across my desk focus on two things:

1) changing customer profiles;
2) disbelief & guffaws by the manufacturers.

Like the American auto industry in the 1970s, there is an arrogance with many motorcycle manufacturers & its dealer networks. They are refusing to recognize the reality that today's customers are interested in a different type of motorcycle. It is no longer a case of "they will buy whatever we produce." For example, again, as was experienced by Harley during the 80s and 90s in the USA.

All said, I still maintain a positive outlook for the Chinese motorcycle industry. The Chinese have proven, time and again, an immense ability to adapt. If you place a 1990s Chinese motorcycle against a 2010 Chinese motorcycle, the changes are mind-boggling. I am confident that the Chinese motorcycle in 10 years will be light years away from the current offerings.

On a personal note, having owned both the CJ750 (in various forms) and the JH600B, I can see the incredible differences. It reminds me of the difference between an AMC Gremlin/Pacer and a Honda Civic/Accord. The "B" ain't perfect, yet, but at least its parts stay attached to the bike.

Hi, Lao Jia Hou,

Thanks for the informative reply. I'm a great fan of yours. I love your posts. You are one of the ones that I want to know better.
I didn't know about the rebate program on motorcycles. I guess it was like the rebate on old TVs where you can trade in your old TV and get a RMB400 credit towards the new one, yes?
Yes, the city dwelling Chinese love their automobiles, a lot like the people in LA, 'you are what you drive'. I have a fishing buddy that was driving a Honda CRV a few years back. He drove up with a new Mercedes 320 the other day. He is looking at a Rolls-Royce next (he is very rich and love toys). I don't know many rurul Chinese, so I can't command on them.
Yes, I was one of those suckers that bought a Harley Sportster first, and end up with a Fatboy when I left the States. I have been to Stugis once, what a party.
From what I heard, everything is down in the States. It is probably going to stay that way for a few more years.
Seems like China is export a lot of bikes to the Middle East and Africa. I see a lot of Africans in the QuangZhou Bike Part Wholesale Market. And they have a lot of shops with Arabic writing on their signs.
From what you said, they are exporting mostly fuel efficient scooters & small displacement commuters from China?
I am not sure about "I still maintain a positive outlook for the Chinese motorcycle industry. If you place a 1990s Chinese motorcycle against a 2010 Chinese motorcycle, the changes are mind-boggling. I am confident that the Chinese motorcycle in 10 years will be light years away from the current offerings." I have a 2002 Chinese 125cc cruiser(太子), and it is not that far behind the newer bikes of today. As a matter of facts, I am looking into buying a newer licensed cruiser(太子) and upgrading it to a 250. I do see a huge difference between the 80s Japanese dirt bikes and the newer Chinese dirt bikes, but the Japanese bikes has come a long ways too.
I am too old for the bigger bikes. I had one of those rare 1998 licenced Honda Steed 400. I rode around on it for a few years, until it got too heavy for me. Now I'm into the lighter dirt bikes.
David