China summer news round-up
I quite recently wrote an article detailing how, after being faced with slumping domestic sales, many Chinese factories have opted to turn to the production of cars and vans as an alternative. While this has been an extremely successful project for many companies (in particular for Lifan who have basically reinvented themselves as a car company) for others it has been an unsuccessful gamble as in the case of Chongqing giant YinXiang.
Chongqing giant YinXiang in financial struggle after car production investment
With one eye on the success of Lifan’s transition to major automobile manufacturer YinXiang attempted a similar project with vastly different results. After 8 years of research and development with cars and vans YinXiang find themselves in dire financial problems as the gamble to pay less attention to their motorcycle manufacture backfires. Industry expert Ma Lei reports “when Lifan decided to concentrate their efforts on cars they also made sure that they kept an eye on their previous core industry which was basically manufacturing and supplying motorcycles for the African market. That market had always been big for Lifan so they managed to keep providing the bikes and at the same time develop their cars but YinXiang have not managed to do the same and are now in big financial trouble and have taken out several loans to the amount of one billion yuan.” A decade ago YinXiang were one of the top 10 motorcycle manufacturers in the world producing over one million units a year, so far this year (January to June) YinXiang have produced just 108900 units.
Motorcycle sales rise annually for the first time in 6 years
It’s not all bad news on the motorcycle sales front as the Chinese industry posts a rise in trade/ sales/ manufacture (in 2017) for the first time in 6 years. Mainly inspired by a 6 percent rise in export (thanks to the growing European market and further development of bigger displacement engine motorcycles) the total sales figures showed a 2.44 percent increase with a total output of 15 million units. While this is undeniably good news for the Chinese motorcycle industry the figure still remains far under the sales and production record set in 2008 which stands at a world record 24 million units! It’s important to note that the previous drop in motorcycle manufacture didn’t necessarily mean that the profits enjoyed by the industry dropped accordingly as the Chinese industry changed its focus away from developing countries’ markets and began to develop products more suitable for Europe and the United States as well as developing bigger displacement engine motorcycles, a theme that is continuing to this day.
Taiwan becoming preferred electric bike manufacturer
The European Union is sanctioning tariffs ranging from 80 percent to 170 percent on e-bikes made in China with the U.S. is threatening a 25 percent tariff on Chinese electric bikes as well causing suppliers to increasingly look to manufacturers from other countries to fill production needs. The favourite to fill the gap is the Island nation of Taiwan. Taiwan was Europe's second largest source of e-bikes last year, behind China. The amount of e-bikes Taiwan is shipping has risen steeply with the 2017 total of 126,000 bikes being three times the number produced in 2015. The Taiwan Bicycle Association, which provides the export figures, said e-bike exports through the first four months of 2018 added up to 83,000 units, valued at $113 million. Standard bike exports were down nearly 12 percent for the period, to 740,000 units. Despite European interest America remains Taiwan's biggest export market for electric bikes accounting for 22 percent of its total e-bike industry export revenue last year. The total value of Taiwan bike exports to the U.S. during this period increased by over 14 percent, from $381,644,094 to $435,670,435.
And in other news
A 40-year-old Chinese drone technician in the Guangdong province has been developing a flying motorcycle for the past two years and has already completed 1,564 test flights. Zhao Deli’s engineering skills have resulted in a manned aerial motorbike that can reach speeds up to 43 miles per hour, leaving comparable efforts in Russia and Dubai in the dust. Deli’s “Jindouyun,” which translates to “somersault cloud” and describes the Monkey King’s aerial feat in the Chinese novel, Journey to the West, has seen its fair share of disastrous versions over the past couple of years. The very first test flight, for instance, saw the drone’s batteries catch fire. A whole year later, another test flight concluded in a crash landing. Now, 1,546 test flights later, Deli’s motorcycle drone seems to be thoroughly refined and ready for action; at least, Deli thinks so as he’s reportedly eager to take his creation on a 3,400-mile expedition along China’s Yellow River.