David McMullan's blog
|Posted by Shem on September 28, 2016 at 3:35 AM|
BMW and Loncin have created a partnership that offers spectacular benefits for both parties in the short term. Loncin manufactures engines for BMW under a license agreement. These Loncin production engines are in the 47bhp class the power limit for novice riders in the UK and the standard for BMW entry-level big bikes. From 2005 through 2012, Loncin shipped approximately 35,000 engine units to the Berlin Factory at Spandau. The engines powered the G650GS and were part of a record sales year for BMW in 2012.
From Austria to China
In the 2011 BMW G650gs production country switch, BMW moved business to Loncin in China as a costs savings move. It also provides a method for BMW to acquire deeper involvements in the Chinese and Asian markets. The production switch from the Austrian Rotax works to a factory in China reduced costs. However, it has raised questions about quality standards among consumers. BMW has stood firmly behind the policy statement that the move to Chinese production with Loncin has not compromised its quality standards and tolerances. Since 2005, Loncin has produced engines for the G650GS motorcycles at the Chongqing factory. Loncin ships the units to the BMW Spandau Plant in Berlin for assembly.
Restricted Sales in China
By the 2011 BMW G650gs production country changes, Loncin gained the right to produce motorcycles for sale in China using the G650GS engine. Loncin introduced the CR9, a road bike using the same engine as BMW's G650GS, at the Chinese motorcycle show in 2009. It has sold extremely well in China since as a premium motorcycle. The agreement initially has restricted sales to China. In so doing, they have by-passed other Asian markets where Loncin Chinese-made motorcycles compete with competition at all price levels. The CR9 initially sold for $8,000 in China, a premium price-range product.
Now Bigger Engines Too
In November 2013, BMW entered into a new agreement with Loncin. Following on the 2011 BMW G650gs production country change, the new agreement will produce 300,000 units of large displacement motorcycle engines, in the 650cc class. The arrangement establishes Loncin as the leading Asian producer of large displacement engines following on its initial successes with 47bhp engines for the BMW G650GS and its own CR9 model.
The relationship has expanded due to successful results for both parties. One anticipates that the large displacement engines will someday become power plants for high-powered Loncin models following on the success of the CR9. On a global basis, the Asian growth markets include the emerging potential of India as a consumer of luxury goods.
A road bike using the same engine as BMW's G650GS has been unveiled at the Chinese motorcycle show.
Chinese firm Loncin, which makes the single-cylinder 650 engine for BMW under licence, is using it to power its new CR9 naked roadster.
It comes with the same 47bhp power output as the BMW and costs just over £5,000. But because of the firm's licence with the German manufacturer, the machine cannot be sold outside China, according Loncin's Deputy General Manager Mike Shen.
Shen said: “We've had an operation with BMW since 2005 and we have exported more than 35,000 units to them in the past five years, so this is a mature engine.
“But we have an agreement with BMW to supply the CR9 only in China. So we cannot sell in Europe at this moment."
On March 12, 2015, LONCIN Motor Co., Ltd(hereinafter referred to as Loncin) and the German BMW (hereinafter referred to as BMW) signed a new agreement. According to this new agreement, Loncin will undertake the manufacturing of 350CC large displacement water-cooled scooters and the engines for BMW. The product will be made completely in accordance with BMW's standard and Euro IV requirement as well. It will be sold in BMW's global markets (including China market) and the expected annual output is around 15,000 units.
To meet the product's high quality requirement, Loncin will invest about one hundred million RMB to upgrade all the equipment and facilities related to the manufacturing process of the scooter to the world's first class standard. And then the product will gain advantage in aspects of quality, cost and assembling time.
The signing of the new agreement marks the deepening cooperation between Loncin and BMW. Loncin realizes from just big replacement engine manufacturing to vehicle assembly for BMW, and this will further consolidate Loncin's advantage in the motorcycle field.
LONCIN Motor Co., Ltd and BMW's cooperation also shows that Chinese large displacement motorcycle manufacturing capacity has reached the world advanced level, and Chinese motorcycle manufactures are on the progress of "from big to strong".