This new Access Asia reports looks into the struggling motorcycles market in China, and assesses the chances for recovery in the domestic market, the effect of banning motorcycle ownership over 250cc in most major cities in the east of the country.
The motorcycle manufacturing industry has been through turbulent times in recent years. There are three key reasons for this: First, a ban on bikes in cities hit manufacturers hard. Second, the huge profits the industry saw a few years ago stimulated investment in the sector by various enterprises and local interests, much of which was simply blind investment that made the situation worse. Third, orders fell rapidly as fake and shoddy products flooded the market. The tremendous profitability a few years ago induced several local governments to encourage small domestic companies to make bikes. So many local manufacturers rushed into market that increased competition triggered a price war that pushed down motorcycle prices by 10% a year over two years. Counterfeit and black-market motorcycles have also given motorcycle manufacturers problems. The situation declined to the point where if all manufacturers paid full taxes, their per-unit loss would average RMB 40 (US$4.83). Manufacturers have been left almost no profit at all, an issue mentioned by several listed companies in their annual reports. This lack of profits also surfaced in China’s motorcycle export figures. If domestic brands lose the competitive battle, then the foreign-invested brands win. Tianjin Honda has the annual production capacity for 400,000 engines and motorcycles. Honda now has its sights set on more than 30% of the Chinese market, and it is predicted that in a few years, the Chinese motorcycle market will have been overtaken by foreign brands.

TABLE OF CONTENTS EXECUTIVE SUMMARY 3 CHAPTER 1 Market Overview 7 1.1 Market Definition 7 1.2 Research Highlights 7 1.3 Market Analysis 8 CHAPTER 2 Market Value 9 CHAPTER 3 Market Volume 10 CHAPTER 4 Market Segmentation 11 CHAPTER 5 Competitive Landscape 12 CHAPTER 6 Leading Companies 13 6.1 Honda Motor Co., Ltd. 13 6.2 Jincheng Group 13 6.3 Kawasaki Heavy Industries, Ltd. 13 6.4 Yamaha Motor Co., Ltd. 14 CHAPTER 7 Market Forecasts 15 7.1 Market Value Forecast 15 7.2 Market Volume Forecast 16 CHAPTER 8 Macroeconomic Indicators 17 CHAPTER 9 Further Reading 19 9.1 Sources 19 9.2 Related Datamonitor Research 19 LIST OF TABLES Table 1: China Motorcycles Market Value: $ billion, 2001-2005 9 Table 2: China Motorcycles Market Volume: Units million, 2001-2005 10 Table 3: China Motorcycles Market Segmentation: % Share, by Value, 2005 11 Table 4: China Motorcycles Market Value Forecast: $ billion, 2005-2010 15 Table 5: China Motorcycles Market Volume Forecast: Units million, 2005-2010 16 Table 6: China Size of Population (million) , 2001-2005 17 Table 7: China GDP (1995=100), 2001-2005 17 Table 8: China Inflation, 2001-2005 17 Table 9: China Exchange Rate, 2001 18 ?? ?? ?? ?? CONTENTS