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Output and Sales Analysis of the Chinese
Motorcycle Industry for the First 5
Months of 2014
By David McMullan of China Motorcycle news
Declining Output and Sales, Decreasing Market
In May 2014, the industry-wide output and sales drop significantly from the previous month as well as the same period last year. The motorcycle market remains in downturn. In the first five months, both the industry-wide output and sales totaled just over 8,000,000 units, a 1/4 drop compared with the same period in the peak year 2008. The volume-boosted development era has gone and the market space keeps shrinking further. Competition in export get fiercer and fiercer, and industry transformation and upgrade is just around the corner.
Industry-wide output and sales of motorcycles fell by 3.97% and 4.14% respectively in May, to 1,766,200 and 1,744,800 units, representing 10.40% and 11.20% year-on-year decreases. Production and sales of two-wheel motorcycles decreased by 4.36% and 4.54% to 1,562,000 and 1,540,500 units, with year-on-year decrease of 11.54% and 12.46%.
From January to May, industry-wide motorcycle output and sales totaled 8,548,100 and 8,571,200 units, respectively, representing 8.17% and 9.43% year-on-year decreases, and 0.6% and 0.47% greater year-on-year declines compared with that from January to April. Wherein, production and sales of two-wheel motorcycles totaled 7,613,800 and 7,642,600 units, respectively, representing 8.82% and 10.17% year-on-year decreases, and 0.73% and 0/59% greater declines compared with that from January to April. In the first five months, industry-wide motorcycle sales-output ratio reached 100.27%, representing a 1.39% year-on-year decrease. At the end of May, industry-wide enterprise inventory was 666,800 units, representing a 4.06% year-on-year decrease.
Mainstream Displacement Motorcycles Decline Extensively While Large Displacement Ones Increase Significantly
All five mainstream displacement motorcycles witnessed decrease in the first five months. The 250cc models dropped slightly, while 50cc models suffered a decrease over 20%. Only 750cc large-displacement models maintained a rapid growth.
Since the beginning of this year, output and sales of 50cc models are dropping at a rate faster than those of other models. In May, output and sales of 50cc motorcycles decreased by 27.86% and 26.32% year on year to 110,200 and 109,100 units, with month-on-month decreases of 6.37% and 4.59%. From January to May, production and sales of 50cc motorcycles were 501,500 and 507,500 units, with year-on-year decreases of 29.71% and 29.02%, respectively. Production of 50cc motorcycles accounted for 5.87% of total production.
In May, output and sales of 110cc motorcycles decreased by 9.60% and 13.10% year on year to 300,100 and 293,200 units, with month-on-month decreases of 4.19% and 7.44%. From January to May, production and sales of 110cc motorcycles were 1,529,300 and 1,559,800 units, with year-on-year decreases of 7.26% and 6.26%. Production of 110cc motorcycles accounted for 17.89% of total production.
In May, output and sales of 125cc motorcycles decreased by 9.29% and 9.38% year on year to 635,500 and 622,600 units, with month-on-month decreases of 5.31% and 5.13%. From January to May, production and sales of 125cc motorcycles were 3,100,100 and 3,109,700 units, with year-on-year decreases of 7.58% and 9.16%. Production of 125cc motorcycles accounted for 36.27% of total production.
In May, output and sales of 150cc motorcycles decreased by 11.15% and 11.98% year on year to 327,000 and 325,900 units, with month-on-month decreases of 6.06% and 5.35%. From January to May, production and sales of 150cc motorcycles were 1,599,000 and 1,587,500 units, with year-on-year decreases of 6.98% and 8.96%. Production of 150cc motorcycles accounted for 18.71% of total production.
In May, output and sales of 250cc motorcycles decreased by 5.93% and 11.41% year on year to 61,800 and 60,000 units, with month-on-month increases of 8.37% and 3.59%. From January to May, output and sales of 250cc motorcycles are 296,800 and 290,100 units. The output gained a growth of 0.30%, while the sales suffered a decline of 1.81%. Output of 250cc motorcycles accounted for 3.47% of total production.
Though occupying a small proportion of the two-wheel motorcycle output and sales volume, large-displacement motorcycles has maintained quick development since the beginning of this year, thanks to the rapid development of the domestic motorcycle leisure and recreation market. In May, output and sales of 750cc models rose by 13.27% and 19.37% respectively, to 1,150 and 1,078 units, representing 42.50% and 32.11% year-on-year increases. From January to May, production and sales of 750cc motorcycles were 4,140 and 3,962 units, with year-on-year increases of 70.51% and 47.78%, respectively. Production of 750cc motorcycles accounted for 0.05% of total production.
In May, among all modules and varieties of two-wheel motorcycles, output and sales of standard motorcycles fell by 1.96% and 1.83% to 971,800 and 957,300 units, representing 10.89% and 11.60% year-on-year decreases. Output and sales of cubs fell by 9.43% and 9.40% to 325,000 and 324,200 units, representing 15.21% and 16.62% year-on-year decreases. Output and sales of scooters fell by 6.36% and 7.73% to 265,200 and 259,000 units, representing 9.16% and 10.07% decreases year on year.
In the first five months, output and sales of standard motorcycles fell by 8.71% and 9.92% year on year to 4,698,600 and 4,696,900 units. Output and sales of cubs fell by 12.49% and 13.80% year on year to 1,665,600 and 1,689,100 units. Output and sales of scooters fell by 3.86% and 5.85% year on year to 1,249,600 and 1,256,600 units. The total sales of standard motorcycles, cubs and scooters accounted for 61.71%, 21.87% and 16.41% of the total two-wheeler sales in the first five months. Compared with the same period last year, proportions of standard motorcycles and scooters increased slightly while that of cubs dropped.
Three-Wheel Motorcycles Outperform Two-Wheelers
Three-wheel motorcycles have experienced rapid development in recent several years. Since 2013, the growth slowed down. This year, the market even suffered considerable drop. Compared with two-wheelers, three-wheel motorcycles gain better market performance due to its low maintenance costs and large cargo space of cargo ones, making cargo three-wheelers receive broader market reception in rural areas than mini-cars.
In May, output and sales of three-wheel motorcycles fell by 0.90% and 1.00% respectively, to 204,200 and 204,200 units, representing 0.61% and 0.38% year-on-year decreases. In the first five months, output and sales of three-wheel motorcycles decreased by 2.56% and 2.80% year on year, to 934,300 and 928,600 units.
Export Declines Slightly Year on Year
Motorcycle export in May is quite close to that of the previous month. The export amount saw modest increase compared with the previous month, and dropped slightly year on year. In May, the export amount of motorcycle manufacturers increased by 0.65% to 499 million US dollars, representing a 6.12% year-on-year increase. Wherein, export volume and amount of complete motorcycles fell by 0.44% and 1.07% to 755,200 units and 414 million US dollars, representing 11.60% and 8.87% year-on-year decreases.
From January to May, the export amount of motorcycle manufacturers totaled 2.294 billion US dollars, representing a 4.95% year-on-year increase. Wherein, the export volume and amount of complete motorcycles reached 3,459,600 units and 1.911 billion US dollars, representing 8.54% and 6.07% year-on-year decreases. The export volume and amount of motorcycle engines reached 887,100 units and 120 million US dollars, representing 12.20% and 12.01% year-on-year increases. The export volume and amount of ATVs reached 40,700 units and 108 million US dollars, representing 1.65% year-on-year decrease in export volume and 1.43% year-on-year increase in export amount. The export amount of motorcycle parts totaled 155 million US dollars, representing a 6.16% year-on-year decrease.
In May, the top five motorcycle models in export volumes were 125cc (110 ml < displacement ≤ 125 ml), 150cc (125 ml < displacement ≤ 150 ml), 110cc (100 ml < displacement ≤ 110 ml), 50cc (displacement ≤ 50 ml), and 100cc (90 ml < displacement ≤ 100 ml). Their export volumes were 278,700, 155,000, 144,500, 58,000 and 42,700 units, respectively. Compared with the previous month, the 100cc models saw the most rapid growth while 50cc and 125cc models witnessed slight growth. Others remained in downturn. In May, a total of 678,900 motorcycles in the five models were exported, accounting for 89.90% of the total motorcycle export volume in China.
From January to May, top five motorcycle models in export volumes were 125cc, 110cc, 150cc, 50cc and 250cc (120 ml < displacement ≤ 250 ml). Their export volumes were 1,296,300, 727,700, 686,700, 267,300 and 181,600 units, respectively. Compared with the same period last year, only 110cc models gained growth and others fell in various degrees. From January to May, a total of 3,159,600 motorcycles in the five models were exported, accounting for 91.33% of the total motorcycle export volume in China.
In May, top five motorcycle models in export amounts were 125cc, 150cc, 110cc, 50cc and 250cc. Their export amounts were 1.4588 billion, 84.97 million, 70.78 million, 37.62 million and 32.62 million US dollars, respectively. Compared with last month, 50cc and 250cc models grew slightly while other models suffered declines. In May, export amount of motorcycles in the five models reached 372 million US dollars, accounting for 89.86% of the total motorcycle export amount in China.
In the first five months, top five motorcycle models in export amounts were 125cc, 150cc, 110cc, 50cc and 250cc. Their export amounts were 695 billion, 379 million, 348 million, 168 million and 150 million US dollars, respectively. Compared with the same period last year, 110cc models maintained growth, and others, decline.
From January to May, export amount of motorcycles in the five models reached 1740 million US dollars, accounting for 91.05% of the total motorcycle export amount in China.
Total Industrial Profit Maintains Rapid Growth
According to the China Association of Automobile Manufactures, in the first four month, 35 of the total 95 motorcycle manufacturers suffered from loss. The number increased by 12.90% year on year. The industry-wide operating revenue was 39.280 billion Yuan, with a year-on-year decrease of 0.13%; operating costs totaled 34.203 billion Yuan, with a year-on-year decrease of 0.57%; the total profit was 1.103 billion Yuan, with a year-on-year increase of 9.25%. Reduction in operating costs contributed to the growth in profits.
Only One of the Top 10 Enterprises Remains to Grow
In the five months of 2014, the top 10 motorcycle manufacturers in sales were Dachangjiang (Haojue), Loncin, Lifan, Northern Ek Chor (Dayang), Yinxiang, Guangzhou Dayang, Zongshen, Jianshe, Wuyang-Honda, and Jialing, their sales volumes being 876,500, 593,100, 590,900, 507,800, 411,900, 408,000, 386,800, 375,200, 373,700, and 3430,00 units, respectively. With the exception of Dachangjiang, which achieved a growth of 5.32%, the other companies in the top nine suffered from decreases, compared with the same period last year. In the first five months, the ten enterprises totally produced 4,867,100 motorcycles in the first two months, accounting for 56.78% of total sales, representing a 2.06% year-on-year increase.
2013/2014 reveals the changing strategies and focus of
Chinese motorcycle industry
Report by David McMullan in Chongqing, China for China Motorcycle News
2013 was heavily earmarked as the year that would predict the future trends of the Chinese motorcycle industry. Predictably (due to the ongoing ban on traditionally fueled 2-wheelers in Chinese urban centres) the overall motorcycle output and sales decreased year on year by 3.12% and 2.56% to 22,891,700 and 23,045,000 units respectively although the more lucrative export market grew with a year-on-year increase of 2.6% in 2013 to 9,168,100 units. This accounted for 39.75% of total motorcycle sales from China.
This figure (induced by greater concentration on foreign markets) is a new record for the Chinese industry with the export percentage of some enterprises (mainly in Chongqing) reaching up to 70%, the majority of enterprises exporting medium- and low-end motorcycles, leveraging high cost-effectiveness to compete in foreign markets. Currently, most of China's medium- and low-end motorcycles are exported to Asia, Africa, and Latin America at an average price of RMB 3218 (USD 532.92) per unit with cost-effectiveness providing the only real competitiveness of the products.
According to statistics provided by Chinese Customs, China had exported 9,128,400 motorcycles totaling RMB 4,865 million at an average price of USD 532.92 to 198 countries and regions during the first 11 months of 2013. Export to Asia, Africa, and Latin America accounted for 87.57% of the total export volume, with Myanmar, Nigeria, Argentina, Venezuela, Philippines, Togo, Mexico, Russia, Angola, and Columbia topping the export destination list. A total of 4,639,600 motorcycles were exported to these top 10 countries, accounting for 50.83% of total export. , Motorcycle engine export saw an an increase of 0.87% to 26,191,300 units.
Asia, Africa, and South America are still experiencing great potential demands for motorcycles at present and China motorcycle companies have a long-term and stable market presence in these regions. However, competition is getting tougher due to the sales increases of Indian and Japanese motorcycles on traditional Chinese markets.
From January to November, China imported 3728 motorcycles at an average price of USD 9408.21; these consisted of brands such as Harley Davidson, BMW, KYMCO, SYM, Ducati, and MV Agusta. The import volume mainly consisted of high-end motorcycles, with 66.04% of those imported being 800cc displacement or larger, causing a great average price gap between exported and imported motorcycles.
China's domestic motorcycle sales reached a high of around 19,000,000 units in 2009 and then suffered gradual decreases for 4 consecutive years. In 2013, the market decreased by 5.73% from 2012 to 13,880,000 units, 26.94% less than 2009.
Domestic sales decreased due to ban on motorcycles in urban centres, the national economic transformation and the rural market downturn. In Chinese rural areas, motorcycles are used for a variety of purposes, including personal transportation, passenger vehicles, and cargo transportation. Improved living standard in these areas in recent years has led to the replacement of motorcycles with mini-cars and e-bikes, with motorcycles reverting to their original purposes of personal transportation and recreation.
To meet these market changes, less standard and cub motorcycles for personal transportation have been produced and have been replaced by well-built, sturdy scooters. Statistics showed that well-built scooters had a market share of 19.7% in 2013. Over 30% of new models launched by motorcycle enterprises for the domestic market were scooters and more market shares for scooters are expected in 2014.
250 cc or larger displacement motorcycles for recreational
purposes witnessed a great sales increase in 2013. The total market volume had
been expanding after experiencing greater model diversity annually. Output and
sales increased by 7.70% and 9.03% year on year, to 789,900 and 791,700 units
respectively in 2013.
Demands for motorcycles with 400cc or larger displacement increased sharply in 2013, resulting in a sales increase of 56% to 8774 units although this still only occupied less than 1% of the total market. In China, Qjiang (Benelli) BJ600GS, Loncin LX650, and CFMOTO 650 were the major players in this category with nearly 50% of the total market share going to the BJ600GS. Over 4000 BJ600GS motorcycles were sold in 2013, according to Li Qi, manager of the Guangdong region for Qianjiang (owners of Benelli). This great sales gap is expected to be narrowed when products like the Kawasaki Ninja and the Honda CB300 are introduced to the Chinese market in 2014.
Mainly targeting rural markets, three-wheel motorcycles (tuc tucs) have experienced rapid sales growth in recent years. Their output and sales increased by 4.78% and 5.22% year on year to 2,424,200 and 2,434,900 units respectively in 2013.
In 2013, 29 motorcycle manufacturers suffered from financial deficits, a decrease of 3 manufactures compared with figures declared in 2012.
The total revenue of the Chinese motorcycle industry increased by 3.24% year on year to RMB 112,621 million; including a year-on-year profit increase of 20.24% to RMB 3,322 million. This profit increase was mainly attributed to technical improvement and higher added value on motorcycles despite of the sales volume decreases suffered during industrial transformation in recent years.