INDUSTRY MARKET RESEARCH FOR BUSINESS LEADERS, STRATEGISTS, DECISION MAKERS

NEW Industry forecasts for 2011 & 2016 Industry Studies ■ Custom Research ■ Focus Reports Motorcycles in China

Study # 2320 May 2008 $5100

models. Demand for electric motorcycles Demand in China to grow Motorcycle Demand in China 13.9% yearly through 2011 powered by li-poly batteries will outpace (44.4 million units, 2011) lead-acid powered motorcycles in the The market for motorcycles in China is forecast period, and become the dominant Electric projected to increase at an annual rate of Motorcycles battery type in the Chinese market. 13.9 percent, reaching 44.4 million units 64% Advances will be driven by improve- by 2011. Strong growth in the Chinese ments in li-poly technology, which will motorcycle market will be primarily enable these batteries to be used in more driven by rapidly increasing sales of powerful applications. High tech electric electric motorcycles, which are signifi- motorcycle engines powered by hydrogen cantly cheaper than gas motorcycles and or zinc fuel cells are not expected to subject to lower levels of government achieve significant market penetration in regulation, making them popular choices China in the near-term due to a lack of among urban consumers as an upgrade to fuel cell reactant refueling infrastructure. traditional bicycles. At the same time Gas-Powered Motorcycles demand for traditional gas motorcycles 36% Recreation use is minimal will see steady growth, with sales especially strong in rural areas, benefiting Nearly all motorcycles purcased in China from rising income levels. are used by their owners for transporta- tion purposes. Advances will be spurred Gas motorcycle sales by demand for cost-effective vehicles in military and police segments and a both urban and rural areas. Although a to remain strong mediocre outlook in the transportation relatively small segment, demand for segment. Nevertheless, demand for Demand for gas motorcycles in China recreational and sport motorcycles will larger motorcycles will see robust growth will be driven primarily by increases in see fast growth going forward, driven by in the recreation and sport markets, rural income levels as well as ongoing rising personal income levels and greater although these two markets will remain demand for cheap forms of individual popularity of motorcycle activities among relatively small in the forecast period. transport across the country. Urban young people in China. Demand for motorcycle bans and other restrictions electric recreational motorcycles is also enforced by local governments will Electric motorcycles to being fueled by the emergence of electric ensure that the gas motorcycle market register stronger gains vehicle rentals in tourist spots. will remain focused on rural areas going Sales of electric engine motorcycles will forward. Motorcycles with engine Study coverage outpace gas motorcycles and become the displacements between 50cc and 249cc more dominant motorcycle segment in Motorcycles in China, a new Freedonia will continue to dominate demand China in 2011, due in large part to the industry study, is available for $5100. It through 2011, benefiting from their cost-effective and environmentally presents historical demand data for 1996, suitability for use in a wide range of rural friendly characteristics of these vehicles. 2001 and 2006 plus forecasts for 2011 applications. Smaller models will suffer Being a comparatively new model, and 2016 by product, market and region. from competition from electric motor- electric scooters and other more powerful In addition, this study considers market cycles, while market gains for larger machines dominate the electric market, environment factors, evaluates market machines are expected to be modest due due to their superior performance share and profiles 39 competitors. primarily to declining sales in the compared to other electric motorcycle Copyright 2008 The Freedonia Group, Inc. Visit our NEW and IMPROVED website at www.freedoniagroup.com NEW China Industry Study with Forecasts for 2011 & 2016 Motorcycles in China

Recreation OVERVIEW Table of Contents Sport 1 China Motorcycle Statistics Other 2 Motorcycle Pricing Patterns in China 3 China Motorcycle Demand by Engine Type Introduction REGIONAL TRENDS Cht Motorcycle Demand by Engine Type in China General 4 Chinese Foreign Trade in Gas Motorcycles Executive Summary Regional Demographic & Economic Trends 5 Chinese Foreign Trade in Electric Motorcycles Population Patterns 6 World Gas Motorcycle Demand

Economic Outlook Cht World Gas Motorcycle Demand by Region, 2006 Market Environment Motorcycle Trends General Regional Demand for Motorcycles GAS MOTORCYCLES Economic Overview Central-North 1 Gas Motorcycle Demand in China Demographic Overview Overview Cht Gas Motorcycle Demand by Displacement Population Motorcycle Demand in China, 2006 Urbanization Northeast Cht Motorcycle Demand by Model in China, 2006 Households Overview 2 Light Motorcycle Demand in China Currency Exchange Rates Motorcycle Demand Cht Light Gas Motorcycle Demand in China, 2006 Consumer Income and Expenditure Trends Central-East 3 Medium Motorcycle Demand in China Light Vehicle Market Trends Overview Cht Medium Gas Motorcycle Demand in China, 2006 Light Vehicle Supply & Demand Motorcycle Demand 4 Heavy Motorcycle Demand in China Light Vehicle Park Central-South Cht Heavy Gas Motorcycle Demand in China The Shift from Motorcycles to Automobiles Overview China’s Transition to Light Vehicle Dominance Motorcycle Demand Public Vehicle Service System ELECTRIC MOTORCYCLES Southwest 1 Electric Motorcycle Demand in China Environmental & Regulatory Factors Overview The Motorcycle Industry Five-Year Plan Cht Electric Motorcycle Demand by Model in China Motorcycle Demand Cht Electric Motorcycle Battery Use in China Motorcycle Emission Standards Northwest Gas Motorcycle Ban 2 Electric Bicycle Demand in China Overview Cht Electric Bicycle Demand in China Regulations for Electric Motorcycles Motorcycle Demand Motorcycle Safety 3 Electric Moped Demand in China Cht Electric Moped Demand in China Counterfeit INDUSTRY STRUCTURE 4 Electric Scooter & Other Demand in China General OVERVIEW Cht Electric Scooter & Other Demand in China Industry Composition Motorcycle Supply & Demand Market Share MARKETS Motorcycle Park Product Development & Manufacturing Pricing Trends 1 Motorcycle Demand by Market in China Marketing & Distribution Cht Motorcycle Demand by Market in China, 2006 Gas Motorcycle Acquisitions & Divestitures Electric Motorcycle 2 Transportation Motorcycle Demand in China Cooperative Agreements Cht Transportation Motorcycle Demand in China Technology Trends Foreign Participation in Chinese Market The Shift from 2-stroke to 4-stroke 3 Recreation Motorcycle Demand in China Cht Recreation Motorcycle Demand in China Electric and Hybrid Engines Company Profiles Foreign Trade & International Issues 4 Sport Motorcycle Demand in China Foreign Trade Cht Sport Motorcycle Demand in China Gas Motorcycles 5 Other Motorcycle Demand in China Electric Motorcycles Cht Other Motorcycle Demand in China List of Tables & Charts World Outlook for Gas Motorcycles REGIONAL TRENDS 1 Population of China by Region GAS MOTORCYCLES Executive Summary General 2 Gross Domestic Product of China by Region 1 Summary Table Gas Motorcycle Engine Displacements 3 Motorcycle Demand by Region in China Gas Motorcycle Models Cht Motorcycle Demand in China by Region, 2006 Cruiser Market Environment 4 Central-North Region of China: Motorcycle Demand Scooter 1 Gross Domestic Product of China Cht Central-North Region of China Underbone 2 Population of China 5 Northeast Region of China: Motorcycle Demand Trike & Sidecar Cht Population of China by Age Cht Northeast Region of China Light Motorcycles 3 Households in China by Region 6 Central-East Region of China: Motorcycle Demand Medium Motorcycles 4 Chinese Currency Exchange Rates, 1996-2006 Cht Central-East Region of China Heavy Motorcycles Cht Chinese Currency Exchange Rates, 1996-2006 7 Central-South Region of China: 5 Consumer Income & Expenditure Patterns in China Motorcycle Demand ELECTRIC MOTORCYCLES 6 China Light Vehicle Statistics Cht Central-South Region of China Cht Light Vehicle Density Comparison, 2006 8 Southwest Region of China: Motorcycle Demand General Cht Ratio of Motorcycle to Passenger Car Sales Cht Southwest Region of China Electric Motorcycle Demand by Model in Japan, 1950 to 2000 9 Northwest Region of China: Motorcycle Demand Electric Motorcycle Batteries Cht Relationship of GDP per Capita to Relative Cht Northwest Region of China Lead-Acid Battery Motorcycle Sales Dominance in Japan, Lithium Polymer Battery 1950 to 1970 Fuel Cell INDUSTRY STRUCTURE Cht Comparison of GDP per Capita Electric Bicycles 1 Revenue Data: Selected Motorcycle & Motorcycle Dominance Mopeds Companies, 2006 Cht China’s Transition from Motorcycles Scooters and Others Cht Motorcycle Share by Company in China, 2006 to Light Vehicles, 1996-2006 Cht Gas Motorcycle Share by Company in China, 2006 7 China Bus Statistics MARKETS Cht Electric Motorcycle Share by Company Cht Emissions Standards Rollout in China in China, 2006 General 2 Selected Cooperative Agreements Transportation Industry Studies ■ Custom Research ■ Focus Reports

INDUSTRY MARKET RESEARCH: BUSINESS INTELLIGENCE FOR BUSINESS LEADERS, STRATEGISTS, DECISION MAKERS

markets

Transportation The transportation market covers motorcycles used for individual or business transportation, including in commuting, delivery, taxi and other ap- TABLE III-1 plications. Competitive transportation vehicles in China are segmented into CHINA MOTORCYCLE STATISTICS mass transit including buses, trains, subways and taxis, and individual vehicles (thousand units) including bicycles, light vehicles and low-speed vehicles.

Transportation motorcycle sales accounted for 97 percent of the total Item 1996 2001 2006 2011 2016 motorcycle market in 2006, which is hardly surprising considering that most Chinese families cannot afford superior motor vehicles as household transporta- Population (million persons) 1223 1275 1313 1352 1392 motorcycles/000 capita 18.8 43.1 81.5 141.3 196.8 tion tools at present. Motorcycle demand for transportation in China is projected to increase 14.0 percent per year through 2011 to 43.6 million units, with the Motorcycles in Use (mil units) 23 55 107 191 274 fasted growth expected in the electric motorcycle segment. Advances will be Gas 16S AMPLE43 83 TA BLE91 99 Electric 7 12 24 100 175 spurred by demandS forA MPLEcost-effective P transportationAGE in both urban and rural areas. Historical data for Motorcycle Demand 8860 9850 23200 44400 55400 Factors influencingExplanations demand for transportation that vehicles include consumer Gas 88501996, 9600 200112400 16200and 17505 income levels, traffic conditions, traffic regulations and competition from other Electric 10 250 10800 28200 37895 support each table’s 2006 as well as modes of transport. Unlike in developed countries, where increasing income Net Exports 32 142 10270 14975 17225 levels will lead datato transition and away forecasts from motorcycle as a transportation vehicle Gas Freedonia30 100 8575 forecasts 11475 12670 to more expensive light vehicles, in China, growth of income levels will make Electric 2 42 1695 3500 4555 for 2011 and 2016 motorcycles affordable to more people. Considering the comparatively lower Motorcycle Shipments 8892 9992 33470 59375 72625 income levels in China, especially in rural areas, the price for a light vehicle is Gas 8880 9700 20975 27675 30175 too high for most individual consumers, although in a few large cities in China, Electric 12 292 12495 31700 42450 private light vehicles are becoming common to middle-class people.

Mass transit, or public transport systems, can serve as a reliable, low cost substitute for motorcycle ownership in the urban areas. The improvement on the efficiency of mass transit will divert demand from individual vehicles -- such as motorcycles -- to some degree. While public bus systems have been well established in most Chinese cities, they have often not adequately covered suburban and rural regions. Even in cities, mass transit networks are believed company profiles to be inferior to individual vehicles in terms of convenience and time efficiency, especially in large cities, where traffic congestion is a major problem. China Jialing Industrial Company Limited No. 100 Shuangbei Ziyou Shapingba District, Chongqing 400032 CHINA Copyright 2008 The Freedonia Group, Inc. 86-23-6519-4095 http://www.jialing.com.cn

Jialing Motorcycle America Corporation ����������� 10914 Northwest 33 Street, Suite 100 Miami, FL 33172 305-477-1277 COMPANY PROFILES ������������������������������������������ CHART VII-1 http://www.jialingusa.comPresented for 39 competitors �������������������� MOTORCYCLE DEMAND IN CHINA BY REGION, 2006 Sales: ¥3.5 billion [US$443in the million] Chinese (2006) industry (23.2 million units) Employment: 4,150 (2006)

Key Products: moped, cruising, sport and street motorcycles; scooters; and ������������ motorcycle engines ��������� �� International Contact: Miss Yang Ling, Sales Manager ����� �������������� �����������

China Jialing Industrial Company Limited, also called China Jialing �������� ������� �������� ������� Group, is part of the China North Industries Group (NORINCO), which is a ����� ������� ��������� ��� ������� large government-owned entity involved in numerous industries beyond motor- �� �����

cycle manufacture. China Jialing manufactures and sells motorcycles, scooters, ������� �������� SAMPLE������ CHART engines and other parts. The Company is also involved in the optical product, ������� ����� ����� ����� automobile, biomedical, software, hotel and real estate industries. ������� �������� Data������� illustrated

�������� �������� The Company’s motorcycles and scooters are mainly sold under the ��������� with the aid����� of ��� ����� JIALING brand name, and include moped, cruising, sport and street models that ������� �������� ���������more than������� 70 have engines with displacements from 35 to 600 cubic centimeters (cc). Specific ���� ����� ������� ��� models include the 70-cc JL70-3 scooter, JH70II cruising and JH70 sport mod- tables and �������charts������ els; 90-cc JH90-C sport series; 100-cc JH100 sport and JL1008 scooter models; ������� ������� ����� 125-cc JH125 sport and cruising series, and JL125 scooter series; 150-cc ������ ��� ��������� JH150H sport and JH150E-B cruising models; 200-cc JH200-2 cruising; 250-cc JH250 cruising series; 600-cc JH600 street models; and JL50 scooter vehicles. China Jialing also manufactures motorcycle engines. ������ ��������������������������������� Copyright 2008 The Freedonia Group, Inc. Order Information Other Titles from To order fill out the coupon below and mail to The Freedonia Group, or place your order by phone toll The Freedonia Group free (800) 927-5900 (US) or (440) 684-9600, or by fax (440) 646-0484, or by e-mail at [email protected] World Rubber & Tire World rubber consumption will rise 4% yearly Free Handling and Shipping through 2011, driven by solid growth in motor There is NO charge for handling and UPS shipping vehicle production and a stronger world econ- in the US. Expect delivery in 3 to 5 days. Outside the omy. Non-tire rubber will outpace and overtake US, Freedonia provides free airmail service. If you tire rubber demand based on opportunities in require express delivery, Freedonia provides this to the automotive, industrial, consumer and con- you at cost. struction sectors. This study analyzes the world tire and rubber industry, with forecasts for 2011 Save Fifteen Percent and 2016 by type, market, world region and for 30 countries. It also evaluates company market Reliable analysis If you order three (3) different titles at the same time, share and profiles leading competitors. you can receive a discount of 15%. If your order is #2282...... 02/2008...... $5500 provided by the accompanied by a check, you may take a 5% cash discount (discounts do not apply to corporate Freedonia China team use licenses). Automotive Aftermarket in China Freedonia’s China office — staffed by Credit Card Orders The aftermarket for light vehicle components and parts in China will grow 17.9% annu- a senior analyst from our US head- You may charge your order to either American ally through 2011. Gains will be driven by the quarters and experienced China Express, MasterCard or Visa. Please include your dramatic increase in the light vehicle park and credit card account number, expiration date and your increasing aftermarket spending per vehicle. nationals, all with graduate degrees in signature. Mechanical products will remain the largest business or economics — enables us segment while electronics grow the fastest. to provide our clients with the most Orders Outside of the US This study analyzes the ¥33.7 billion auto- motive aftermarket in China, with forecasts reliable information and analyses Checks must be paid in US funds, drawn against a for 2011 and 2016 by product and service US bank and mailed directly to The Freedonia Group. relating to industry in China. performer. It also evaluates market share and For wire transfer instructions please contact our cus- profiles major players. tomer service department at info@freedoniagroup. #2262...... 12/2007...... $4900 com. Or you may use a credit card.

Corporate Use License World Motorcycles Now every decision maker in your organization can Need analysis on a topic act on the key intelligence found in all Freedonia Global motorcycle demand will grow 6% yearly studies. For an additional $2,300 you receive through 2011. Gains will be led by developing not covered by unlimited use of an electronic version (PDF) of the markets based on rising incomes and the intro- study. Place it on your Intranet, e-mail it to coworkers duction of higher quality machines with newer Freedonia Industry Studies? around the world, or print it as many times as you technologies. In developed markets, fuel prices Call Customer Service like! Order it today. and car restrictions will make motorcycles more attractive as transportation. This study for details on analyzes the 44.3 million unit world motorcycle Online Access industry, with forecasts for 2011 and 2016 by Freedonia Custom The complete text and tables from our studies and type, world region and for 18 countries. It also reports can be purchased at our website details market share and profiles major players. Research www.freedoniagroup.com and through major #2251...... 11/2007...... $5400 commercial online hosts.

ORDER FORM Click here to purchase online TITLE PRICE

Name: Motorcycles in China $5100

Title: Corporate Use License (add to study price) + $2300

Company: __ Additional Print Copies @ $500 each

Division:

Street: Total (including selected options): $ (no PO Box please) Enclosed is my check (5% discount) drawn on a US bank and payable to The Freedonia Group, Inc., in US funds (Ohio residents add 7.75% sales tax) City/State/Zip: Bill my company American Express MasterCard Visa month year Country:

Phone: Fax: Credit Card # Expiration Date e-mail: Signature:

INQ-2320 The Freedonia Group, Inc. 767 Beta Drive Cleveland, OH 44143-2326 USA website: www.freedoniagroup.com phone: 800-927-5900 (US) or 440-684-9600 fax: 440-646-0484 e-mail: [email protected]