China's motorcycle producers and traders need to sharpen their respective competitive edges in order to tap huge market potential both at home and abroad over the next 30 years, Southnet.com reports.
There are currently a total of 50 million motorcycles in use in China, with an annual output of 10 million, ranking it first in the world.
But China far lags behind other countries in terms of popularization rate. For every one thousand people on the mainland, only 40 own motorcycles, compared to 500 in Taiwan, notes Yin Mingshan, chairman of the Chongqing Lifan Group, one of China's major motorcycle producers.
If the ownership figure increases to 200 or 250 per thousand people, Yin says, China's motorcycle market capacity could reach 300 million.
The industry is struggling on the domestic front at the moment with many cities either restricting or preventing development due to concerns over pollution, noise and traffic jams.
Despite this trend, Yin cites the adoption of a tax-based motorcycle industry stimulation policy in London as evidence that China will eventually shift stimulation of auto consumption to promotion of the motorcycle industry.
The reasons for such a shift are many, Yin claims. Motorcycles take up less parking space and are better at passing, which leads to less traffic. Once emissions are brought down to standard, Yin says Chinese cities will have no excuses to restrict and prohibit driving motorcycles.
Exports of Chinese motorcycles started rocketing upward in the late 1990s, going from 40,000 sold in 1998 to 258,000 in 1999. The figure is expected to come in at 2.3 million in 2001.
Chongqing Motorcycle Works exports to Southeast Asia and South America. Products produced by Chongqing Lifan have entered the Central Asian market.
But there are some unprecedented challenges to Chinese motorcycle exporters in protection of property rights after China's entry into the World Trade Organization, Yin admits.
Lifan Group owns 106 patents, ranking first among domestic enterprises of the same trade. But it cannot compare to Japan's Honda, which owns more than 10,000.
Lifan spent more than 10 million yuan to develop a new model last year and won an order for 6,000 motorcycles from Viet Nam. The deal was eventually cancelled when it was revealed some of parts used in the new vehicle were similar to those designed by Yamaha Co, which owns Vietnamese patents.
Yin also says Chinese companies need to improve weak after-sale services overseas. Better service will bring a stable market, he says.
The auto and motorcycle industry is the largest pillar industry in Chongqing,home to the largest crankshaft and damper factories in the world.
In cooperation with a French enterprise, Chongqing Lifan plans to set up a large joint venture for producing engines in Chongqing.
(China Daily March 21, 2002)
