After half a century of development, China’s motorcycle industry has created a relatively complete system of production, with well-outlined department such as R&D, and marketing, indeed some famous groups cover the market, such as QianJiang motor, ZongShen motorcycle, LiFan motorcycle. Today, China is one of the greatest manufacturing countries in the world. However, since 2008, domestic motorcycle sales continue to fall, as it has many limitations. The whole industry is in a state of low technology, low profits, and low quality. With a serious product homogeneity phenomenon, the product lacks sustainable competitiveness and wander in the low-end market even abroad. With the rising trend of the industry 4.0 in China, transformation and upgrading of the motorcycle industry are imminent. Therefore, the improvement of the technology of research and development become the focus of the industry’s transformation.
Background of the Motorcycle Industry in China
In August 1951, China started its trial production of motorcycles and manufactured 5 heavy military motorcycles named Okayama brand by the central military commission. The car could speed up to 110 kilometers per hour. In 1953, the output of JingGangShan motorcycle exceeded 1000, which marked China’s motorcycle industry in a new era.
In recent 10 years, China’s motorcycle industry develops faster. In terms of product production, annual output from 1980 in 49000 to 970000 in 1990, until today, China has been ranked the largest motorcycle production country in the world. The motorcycle has become the national economy pillar industry if the country’s economy as well, and an important part of the automobile industry.
Declining Sales in the Traditional Motorcycle Market
In 2010, the domestic motorcycle sales reached 275 million, while later showing an overall decline. Chinese auto cycle will still decline as affected by the upgrading of domestic consumption demand. The overseas emerging markets are expected to be the main market of the domestic motorcycle.
Product displacement of Chinese motorcycle is mainly concentrated in the 110ml, 125ml, 150ml, which accounting for more than 80% of the total production. While 400ml displacement products require high technique, thus relative to the international brand, the output is far less. As for international consumers, China, India, Indonesia, Vietnam, Brazil, Thailand, Philippines, the United States, Pakistan and Taiwan are part of the top ten motorcycle markets in the world, 8 / 10 are from Asia and developing countries, indeed, the main production is concentrated where the low-cost output is located.
In 2015, China’s motorcycle market demand decreased significantly. Annual production and sales of motorcycles for the whole year was at 18.8322 million units, with a decline of 11.57% compared to the previous year, Among those figures, the motorcycle export was at 7.6981 million units, falling by 10.32% over the previous year; and domestic sales was at 11.1249 million units, down by 12.65% over the previous year. The motorcycle production and sales have been down for four consecutive years. One of the principal reason is that some laws and regulations have been implemented to limit the traffic of motorcycles in large cities in order to avoid accidents with the speed of those type of vehicle. And with the changing lifestyle of Chinese people and improved living standards, Chinese people are more attracted to e-bikes and mini-cars.
New Opportunities for the Market
In the long run, e-bike and medium size motorcycle (400 ml) will be the future growth points in China. Low energy consumption and safety will also get its attention. But due to the regulations limit against the motorcycle speed, for a long time, a lot of Chinese people weren’t aware of the motorcycle product, leading to insufficient consumer demand. This push company within this industry to develop an innovative way to attract the consumer by means of leisure and entertainment function lines. With the development of the motorcycle leisure functions, Chinese people would be more attracted to the product, and will tend to choose a larger motorcycle with higher technology and fashionable outlook. The pattern of the future market will be 20% of high-end cars and 80% of the low-end products. Safety awareness will be improved and lower fuel consumption will be preferred.
The transformation of Chinese motorcycle has a long way to ascend. China’s motorcycle brands need to create a spirit and a brand image. For instance, BMW‘ads insist on the pleasure of driving, its ads focus on the product itself and the supporting technology; The core competency of Ferrari is speed and pleasure, and it also maintains its lead in this area. China’s motorcycle brands also need to invest in sound production systems, in response to the global market. The simplification of Chinese market demand, to a certain extent, limits the upgrading of China’s motorcycle industry. Indeed, the establishment of a production system with a global production, R&D and sales system can be developed according to market differences, which will be the “Chinese motorcycle” international trend. Core technology breakthroughs are also crucial.
The low-end motorcycle market will persist while the number of motorcycle companies will decrease. China has a large population, a large gap between the rich and the poor, and there is a serious imbalance in regional development. In many rural areas, the motorcycle is still the main travel vehicle and production tool, which is generally low-end motorcycles with low maintenance cost. Therefore, China’s low-end market will still subsist for a long time, but with a gradual prosperity of the rural areas, the market demand will be reduced.
In a word, the decline of motorcycle production and sales shows the end of an old era and the beginning of a transformation. Large displacement motorcycles with leisure and entertainment functions are the inevitable developing trend of China’s motorcycle industry.
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