David McMullan on Loncin
Chongqing Loncin Motorcycle Industry Co. Ltd is a Chongqing-based company that manufactures and assembles motorcycle components, engines and complete motorcycle models. After being started in 1993, the company has grown to be the second largest producer of motorcycles in China (closely followed by Lifan). Loncin produced 593,100 units in the period January – July 2014, from facilities in Chongqing, Zhejiang and Guangdong, and exports roughly half of its production.
Loncin Holdings Co. Ltd was started by Mr. Tu Jianhua in 1983, after he sustained an injury working for a state-run coal mining enterprise.
In 1993, Mr. Tu set up the Loncin Gasoline Engine company and in 1999, the first Loncin motorcycle model was launched. In 2002, Loncin Industrial Group was set up and a new R&D centre built.
By 2006, Loncin had climbed to the top of the Chinese motorcycle export market in China, exporting more motorcycles to any other motorcycle manufacturer in China.
Mr. Tu is now the 182nd wealthiest person in China, with an estimated USD$1.83 Billion dollars in net worth as of May 2015 according to Forbes.
Loncin has recently signed a production partnership agreement with BMW Motorrad in 2005 which saw the G650GS motorcycle engine start production in its facilities in Chongqing. Over 35,000 of these engines have now been produced and shipped to BMW as a result of this collaboration. BMW have signed off on Loncin using the G650GS engine in one of their own models, the LX650 Roadster (also known as the CR9), which is currently only sold within China due to licensing restrictions in their agreement with BMW.
BMW have a team of engineers that oversee the production of their engines at the Loncin plant and have very tight control over the most important aspects of the production process. Despite the strict controls, there’s plenty of opportunity for Loncin’s staff to learn from the BMW team; “We learn something, we put their advantages in our products and make our products more and more competitive” said Mr. Zhou, Export Marketing Manager for Loncin during an interview in November 2014. And the partnership seems to be paying off for both parties. Mr. Zhou went on to mention that “We’re going to produce 800cc engines for [BMW]“.
Loncin has sought Kawasaki’s advice with the development of the Loncin Seven
Kawasaki and Loncin signed a Letter of Intent (LOI) on June 1st, 2012, to help Kawasaki (the only one of the big four Japanese makers not currently selling their models in China) enter the Chinese market with the help of Loncin’s manufacturing and sales channels, but so far this partnership hasn’t yielded much more than a press-release for market-watchers. However, on January 18th, 2013, Kawasaki announced that the LOI had been terminated due to inability to reach agreement on terms of a binding contract.
In December 2013, Loncin capitalised their Nanjing-based cast-aluminum precision manufacturer and sold a 35% stake to Nemak Exterior S.L.U, injecting ￥22.5 million and keeping a 65% share of the subsidiary. The business provides products to companies such as Shanghai GM, FAW Volkswagen, and BMW automobile factory.
In January 2014, Loncin entered into a partnership with AMINO motorcycle, based in Egypt, to help expand its brand in Egypt and the rest of North Africa. AMINO is one company among five that has a license to manufacture motorcycles in Egypt, and Loncin is looking to capitalise on AMINO’s manufacturing capability and its strong brand image in the Egyptian market to gain market share.
Loncin has also been involved with engine development, and use their own engines in their own models, including a single cylinder, water cooled 300cc engine (engine code: LC178MN, based on the Kawasaki KLX 300R motorcycle engine) which produces a maximum of 19.5 kW of power, and a smaller six-speed 180cc engine which apparently uses BMW turbo technology and a constant-velocity carburettor to produce a maximum of 10.5 kW at 8500 rpm, and is used in their LX175-21 street motorcycle. Both Puzey and CCM offered the XTR-4 300 motard using this engine in their product offerings in the past, but appear to have dropped it from their product line. Loncin also offers their engines to other Chinese motorcycle assemblers as an OEM.
Due to adverse global economic and political conditions, Loncin’s export volumes have been falling, and now export around 350,000 units per year (as of November 2014), while they remain in the top 3 motorcycle companies in terms of total production.
The Loncin racing team has competed at the very highest levels having competed in FIM MotoGP125 competitions, the only Chinese motorcycle racing team to have done so.