I have mentioned in previous articles that many of the bigger companies in the Chinese motorcycle industry remain in profit (despite overall drops in manufacture and sales) due to export sales. One of the biggest boosts to the industry is that Chinese bikes are now more accepted in European countries including those which require the EURO 4 certificate of conformity.
5 years ago I was invited to attend a forum in which the major subject was ‘which business processes were best to employ in order to enter the European market.’ Certain Chinese manufacturers were particularly interested in the EU market as much for the prestige of selling their products in the EU as the profit itself as EU accepted models would act as good advertising for other markets. Early next year there will be another forum to judge the results of the last 5 years and to plan for the next 5. Here’s just some of what I am going to say to the factory bosses next year.
To invest in long term results they have to be more careful about the distribution chain as a whole. That means they should more closely cooperate with their distributors, have a common communication strategy, share best practices among them, etc. In general, not only supply the product, but stay in touch with the whole market concept. It’s hard, but pays off and allows increasing profitability. Many Chinese companies from different industries are already based in Europe and use the competitive work forces to create European distribution centres and supply support to their partners, there is no reason that the motorcycle industry could not do the same. Some of the positive aspects include there being a greater value placed on quality control from a manufacturing point of view. I think the biggest change is the confidence of factories. More and more factories are getting brave enough to produce their own designs and try and be creative. This is certainly an exciting development for European dealers us as they can now market products in their own right rather than them being considered a copy of another model.
On the subject of the negative aspects of Chinese bikes on the European (especially British) market Daniel Frost from Llexeter once told me that there could sometimes be a “Lack of development and confidence. We take the effort to promote our imported models to national media in the UK. Whilst Honda can talk about Low friction engines, Start/Stop technology and fuel consumption figures as high as 150mpg we have to create excitement for engines that are sometimes based on technology from 30/40 years ago with a new set of plastics. We are of course able to build excitement about such models because we promote our products effectively. If however Factories want to compete with the mainstream brands they need to develop their own technology to compete.”
A couple of months ago I visited Barton Motorcycle near to the city of Katowice in Poland to get information on the Polish industry and compare it with its British counterpart.
Like many European countries, the Polish motorcycle market has experienced a decrease in new motorcycle registrations. The registration figures from 2009 till 2017 were quite repressive. It’s a bit too early to summarize 2018 but it appears that there is more optimism in the air. There are many factors behind that. First of all the economic situation has improved and people are no longer afraid, so general consumption of goods has started to increase. The second, which I believe is even more important, is the change of law. Now every person who has a car driving license is allowed to ride scooters and motorcycles up to the capacity of 125cc. It created the demand in the market, but moreover it made the motorcycle more popular and fashionable again. The new law was introduced end of August, so we expect that next seasons should bring the real benefits for the Polish motorcycle industry players and Chinese producers as well.
Chinese EURO 4 models are predominantly 125cc or smaller and there is a couple of reasons for this. Possibly the main reason is that this was quite simply the easiest technology for the Chinese to develop to EURO 4 satisfaction. Couple this with the fact that many countries do not require a licence, or at least a licence achieved by extensive training, to ride. The 125cc phenomenon will not be the case forever as I am constantly receiving invitations from factories to review new bikes (including a very cool looking 500cc adventure bike that hit my email box yesterday) that are currently undergoing testing for EURO 4 certificate of conformity suitability. It would seem that after dipping their toes in the water with the smaller displacement bikes they are now ready to take a bigger displacement plunge!