Motorcycles in China

INDUSTRY MARKET RESEARCH FOR BUSINESS LEADERS, STRATEGISTS, DECISION MAKERS CLICK TO VIEW

Table of Contents 2

List of Tables & Charts 3

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Motorcycles in China

Industry Study with Forecasts for 2014 & 2019

Study #2658 | September 2010 | $5300 | 259 pages

The Freedonia Group 767 Beta Drive www.freedoniagroup.com Cleveland, OH • 44143-2326 • USA Toll Free US Tel: 800.927.5900 or +1 440.684.9600 Fax: +1 440.646.0484 E-mail: [email protected] Study #2658 September 2010 Motorcycles in China $5300 259 Pages Industry Study with Forecasts for 2014 & 2019

Table of Contents Foreign Trade...... 79 Southwest...... 162 Gas Motorcycles...... 81 Overview...... 162 Executive Summary Electric Motorcycles...... 84 Motorcycle Demand...... 163 World Outlook for Motorcycles...... 84 Northwest...... 166 Market EnvironmenT Overview...... 166 Motorcycle Demand...... 168 General...... 4 GAS MOTORCYCLES Economic Overview...... 6 General...... 89 Recent Economic Performance...... 7 INDUSTRY STRUCTURE Gas Motorcycle Models...... 92 Economic Outlook...... 9 Cruisers...... 94 General...... 171 Demographic Overview...... 13 Scooters...... 95 Industry Composition...... 174 Population...... 13 Underbones...... 96 Market Share...... 177 Urbanization...... 15 Trikes & Sidecars...... 97 Gas Motorcycles...... 178 Households...... 16 Gas Motorcycle Engine Displacements...... 99 Electric Motorcycles...... 181 Currency Exchange Rates...... 17 Light Motorcycles...... 101 Product Development & Manufacturing...... 185 Consumer Income & Expenditure Trends...... 21 Medium Motorcycles...... 103 Marketing & Distribution...... 188 Light Vehicle Market Trends...... 24 Heavy Motorcycles...... 107 Financial Issues & Requirements...... 190 Light Vehicle Supply & Demand...... 26 Cooperative Agreements...... 192 Light Vehicle Park...... 28 Foreign Participation in Low-Speed Vehicle Market Trends...... 29 ELECTRIC MOTORCYCLES the Chinese Market...... 196 Low-Speed Vehicle Overview...... 30 General...... 111 Legal & Regulatory Issues...... 197 Low-Speed Vehicle Supply & Demand...... 32 Electric Motorcycle Models...... 113 Joint Ventures...... 199 Public Vehicle Transportation Systems...... 34 Mopeds...... 116 Wholly Owned Foreign Enterprises...... 201 Policy & Regulatory Factors...... 36 Electric Bicycles...... 120 Representative Offices...... 202 Industrial Policy...... 36 Scooters & Other...... 124 The Five-Year Plan...... 37 Electric Motorcycle Power Sources...... 128 Other Industrial Policy...... 39 Lead-Acid Batteries...... 130 Company Profiles Motorcycle Emissions Standards...... 42 Lithium Polymer Batteries...... 131 Beijing Zhong Ke San Huan Hi-Tech...... 204 Gas Motorcycle Bans...... 44 Fuel Cells...... 132 Regulations for Electric Motorcycles...... 46 China Chongqing Shineray Motorcycle...... 205 Motorcycle Safety...... 48 China Jialing Industrial...... 206 Counterfeiting...... 49 REGIONAL TRENDS Chongqing Jianshe Motorcycle...... 208 Chongqing Lifan Industry Group...... 210 General...... 134 Chongqing Loncin Industry Group...... 211 Regional Demographic & Economic Trends.. 136 OVERVIEW Chongqing Yingang Science & Technology.. 213 Population Patterns...... 137 Chongqing Yinxiang Motor Group...... 214 Supply & Demand...... 51 Economic Outlook...... 139 Dachangjiang Group...... 215 Park...... 53 Regional Demand for Motorcycles...... 141 Foton Lovol International Markets...... 54 Central-North...... 144 Heavy Industries...... 216 Transportation...... 56 Overview...... 144 Giant Manufacturing...... 218 Recreational & Sport...... 60 Motorcycle Demand...... 146 Guangzhou Benma Industrial...... 220 Other...... 64 Northeast...... 148 Guangzhou Dayang Motorcycle...... 221 Pricing Trends...... 67 Overview...... 148 Guangzhou Motors...... 222 Gas Motorcycles...... 68 Motorcycle Demand...... 151 Guangzhou Panyu Huanan Motors...... 223 Electric Motorcycles...... 70 Central-East...... 153 Guangzhou Tianma Group Technology Trends...... 71 Overview...... 153 Tianma Motorcycle...... 224 The Shift from 2-Stroke Motorcycle Demand...... 154 Harley-Davidson...... 225 to 4-Stroke Engines...... 74 Central-South...... 157 Henan Xinzhongji Jiaotong Science Electric & Hybrid Engines...... 75 Overview...... 157 & Technology Development...... 227 International Context...... 79 Motorcycle Demand...... 159 (continued on following page)

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Table of Contents 6 Light Vehicle Indicators in China...... 28 Cht Electric Bicycle Demand 7 Low-Speed Vehicle Indicators in China 34 in China, 1999-2019...... 124 Company Profiles 8 Bus Park in China...... 36 5 Electric Scooter & Other Electric (continued from previous page) Motorcycle Demand in China...... 127 Cht Electric Scooter & Other Electric Honda Motor...... 228 OVERVIEW 1 Motorcycle Supply & Demand in China 53 Motorcycle Demand Jiangsu Xinri Electric Bicycle...... 230 in China, 1999-2019...... 128 Jiangsu Yadea Technical Development...... 231 2 Motorcycle Demand in China by Market...... 56 6 Electric Motorcycle Demand in China Jiangxi Hongdu Voyage Industry Group by Power Source...... 129 Changzhou Hongdu E-bicycle...... 232 3 Transportation Motorcycle Demand in China...... 60 Cht Electric Motorcycle Demand in China Jinan Qingqi Motorcycle...... 233 by Power Source, 1999-2019...... 130 Jincheng Corporation...... 235 4 Recreational & Sport Motorcycle Luoyang Northern Enterprises Group...... 237 Demand in China...... 64 Luyuan Group...... 239 5 Motorcycle Demand in Other REGIONAL TRENDS Qingdao Aucma...... 240 Markets in China...... 66 1 Population of China by Region...... 139 Qunsheng Group...... 241 6 Motorcycle Pricing Patterns in China.... 68 2 Gross Domestic Product Shandong Bidewen Power Technology...... 242 7 Motorcycle Demand in China of China by Region...... 141 Shandong Incalcu Group...... 243 by Engine Type...... 73 3 Motorcycle Demand in China Shanghai Dishu Electric Bicycle...... 244 Cht Motorcycle Demand in China by Region...... 143 Shenzhen China Bicycle...... 245 by Engine Type, 1999-2019...... 73 Cht Motorcycle Demand in China Suzhou Heping Industry...... 246 8 Chinese Motorcycle Foreign Trade...... 80 by Region, 2009...... 144 Suzuki Motor...... 247 9 World Motorcycle Demand...... 87 Cht Central-North Region of China...... 146 Tianjin Fujida Group...... 249 Cht World Motorcycle Demand 4 Central-North Region of China: Yamaha Motor...... 250 by Region, 2009...... 88 Motorcycle Demand...... 148 Zhejiang Libahuang Industry and Trade...... 251 Cht Northeast Region of China...... 150 Zhejiang Qianjiang Motorcycle...... 251 GAS MOTORCYCLES 5 Northeast Region of China: Zhonglu Company...... 251 1 Gas Motorcycle Demand in China...... 92 Motorcycle Demand...... 152 Zongshen Industrial Group...... 251 2 Gas Motorcycle Demand Cht Central-East Region of China...... 154 Other Companies Mentioned in Study...... 251 in China by Model...... 93 6 Central-East Region of China: Cht Gas Motorcycle Demand in China Motorcycle Demand...... 157 by Model, 2009...... 93 Cht Central-South Region of China...... 159 3 Gas Motorcycle Demand in China 7 Central-South Region of China: by Displacement...... 100 Motorcycle Demand...... 161 List of Tables/Charts Cht Gas Motorcycle Demand in China Cht Southwest Region of China...... 163 by Displacement, 2009...... 101 8 Southwest Region of China: 4 Light Motorcycle Demand in China..... 103 Motorcycle Demand...... 166 Executive Summary 5 Medium Motorcycle Demand in China 107 Cht Northwest Region of China...... 168 6 Heavy Motorcycle Demand in China... 110 9 Northwest Region of China: 1 Summary Table...... 3 Motorcycle Demand...... 170

Market EnvironmenT ELECTRIC MOTORCYCLES 1 Electric Motorcycle Demand in China 113 INDUSTRY STRUCTURE 1 Gross Domestic Product of China...... 12 2 Electric Motorcycle Demand 1 Motorcycle Sales by Company, 2009... 176 2 Population of China...... 15 in China by Model...... 115 Cht Motorcycle Market Share in China 3 Households in China by Region...... 17 Cht Electric Motorcycle Demand in by Company, 2009...... 178 4 Chinese Currency Exchange China by Model, 1999-2019...... 116 Cht Gas Motorcycle Market Share Rates, 1999-2009...... 20 3 Electric Moped Demand in China...... 119 in China by Company, 2009...... 179 Cht Chinese Currency Exchange Cht Electric Moped Demand Cht Electric Motorcycle Market Share Rate, 1999-2009...... 21 in China, 1999-2019...... 120 in China by Company, 2009...... 182 5 Disposable Personal Income & 4 Electric Bicycle Demand in China...... 123 2 Selected Cooperative Agreements...... 194 Consumer Expenditures in China...... 24

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Demand for motorcycles in China will be fueled by electric motorcycles, which will surpass gas-powered types in unit sales in 2014 and account for 75% of aggregate market growth.

Demand in China to grow Gas Motorcycle Demand in China 7.6% yearly through 2014 51% (38 million units, 2009) Demand for motorcycles in China will rise 7.6 percent annually to 54.9 million units in 2014. Electric motorcycles are expected to surpass gas motorcycles to become the most important motorcycle type sold in China. These comparatively new products will account for over three- fourths of all new motorcycle demand in Electric 2014. Gas-powered internal combustion 49% engine (ICE) motorcycles will also record solid growth through 2014, helping to strengthen China’s position as far and away the world’s largest motorcycle market. photo: YongKang Moiika Grouip Co., Ltd. YongKang photo: Electric motorcycles to register fastest growth Gains for electric scooters and three- ICE motorcycles by rural residents as The market for electric motorcycles in wheeled trikes will lag those for electric part of the “Automobiles and Motorcycles China is expected to grow 11.0 percent mopeds and bicycles due to new regula- to the Countryside” program will also per annum through 2014 to 31.6 million tory standards favoring lighter vehicles, stimulate new demand. However, units. Demand for these newer products mainly electric mopeds. restrictions and even outright bans on will continue to expand at a rapid pace ICE motorcycles in many Chinese cities through the forecast period, as increas- will prevent sales from expanding at a ing numbers of urban dwellers turn to Rural regions best market faster pace. Cruisers are the most electric motorcycles for their transporta- for gas (ICE) motorcycles popular model type among Chinese tion needs. Improving vehicle durability Sales of traditional gas motorcycles will consumers, representing 43 percent of and battery power and longevity have increase 3.9 percent annually to 23.3 gas motorcycle sales in 2009. However, allowed electric motorcycles to meet an million units in 2014. Advances will be their dominance of the ICE market has important need among urbanites seeking driven by increasing economic activity been undermined in recent years due to to upgrade from pedal bicycles but and rising personal income levels in the the diversification of motorcycle offerings unable to afford automobiles. Aided by country’s rural and semi-rural regions, in China. Going forward, trikes and central government subsidies, greater which are and will remain the most sidecars will see demand expand at the sales of electric motorcycles in rural important market for these vehicles. fastest rates of any ICE motorcycle settings will also offer new opportunities. Government rebates for purchases of model types.

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Sample Text, TABLE III-3 Table & Chart TRANSPORTATION MOTORCYCLE DEMAND IN CHINA (thousand units)

Item 1999 2004 2009 2014 2019

Population (mil persons) 1256 1296 1330 1367 1401 motorcycles/000 capita 7.3 14.4 28.0 39.4 48.1

gas motorcycles Transportation Motorcycles 9175 18665 37230 53900 67450 Gas Motorcycles: 9045 12405 18640 22580 25850 Scooters Light 895 980 1175 1330 1385 Sales of scooters in China will increase 3.6 percent annually to 6.6Medium 8005 11260sa 17265mple 21000 24200 million units in 2014.sa mpleScooters will te bearx thet brunt of competition from Heavy 145 165 200 250 265 electric motorcycles. Nevertheless, growing economic activity and risElectric- Motorcycles: 130 6260tab 18590le 31320 41600 ing income levels in China, especially in the rapidly urbanizing peripher Mopeds- 50 2065 6505 11600 16250 ies of established cities and townships, will provide solid prospects for Electric Bicycles 80 1315 4650 8120 11250 scooter sales through 2014. Scooters & Other 0 2880 7435 11600 14100

A scooter is a two-wheeled motorcycle characterized by a step- % transportation 95.0 97.3 98.0 98.3 98.3 through design with the engine either attached to the rear axle or locatedMotorcycle Demand in China 9660 19180 37980 54850 68600 under the seat. Scooters usually feature smaller engines than other types of motorcycles, although some modern models have twin cylinder engines. Most modern scooters are installed with air-cooled engines with automatic oil injection, although water cooled technology has been recently adopted in some brands in the Chinese market by OEMs such as Honda and Chunfeng.

Scooters in China have a wide range of displacements from 50 cc through 200 cc. They are an attractive option for first-time motorcycle buyers because of their continuously variable transmission (CVT). Their step-through design also makes them more appealing to female riders.

Scooters in China were traditionally produced by manufacturers in Zhejiang and Guangdong, two of the three major motorcycle producing regions in China. However, Chongqing -- the third major region -- is now looking to increase its scooter output. To this end, the Chongqing government has introduced preferential policies, such as tax rebates, to CHART VII-1 support local scooter producers. MOTORCYCLE MARKET SHARE IN CHINA BY COMPANY Besides encouragement from local governments, the above-average (¥116.8 billion, 2009) profits offered in the segment are another factor attracting motorcycle producers. Chongqing Lifan Industry Group, a Chongqing motorcycle

Market Others sample Leaders 3 .2 % 79.6% 20.4% chart 3 .2 %

2 .8 % 2 .7 %

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Sample Profile, �� Table & Forecast CHART VI-1 �� MOTORCYCLE DEMAND IN CHINA BY REGION, 2009 �� (38.0 million units)

��

�� COMPANY PROFILES ��

�� Chongqing Yinxiang Motor Group Company Limited �� sa�� mple �� No. 822, Konggang Avenue �� Konggang Economic Development Zone �� CHART�� Yubei District, Chongqing 401120 �� China �� 86-23-6718-3722 �� http://www.yinxianggroup.com

�� Annual Sales: ¥1.9 billionsa [US$280mple million] (estimated) �� Employment: 3,000 (2009,profile as reported by company) Key Products: underbone, sport, off-road, cruising, street, scooter and three-wheeled motorcycles; and motorcycle engines

International Contact: Mr. Shang Xiaodong, General Manager “The Central-South is the largest regional Chongqing Yinxiang Motor Group is a leading Chinese manufac- motorcycle market in China, accounting for turer of motorcycles, all-terrain vehicles, gasoline engines and related 36 percent of national motorcycle demand parts. The Company is privately held. in 2009... Sales of motorcycles in the Cen- tral-South are projected to grow 7.1 per- The Company produces underbone, sport, off-road, cruising, street, scooter and three-wheeled motorcycles that have engine cent annually through 2014 to 19.1 million displacements ranging from 35 to 600 cubic centimeters (cc). Among units. Gains will be driven by the increas- Chongqing Yinxiang Motor’s motorcycles are the 124-cc YX125-CF2 ing popularization of electric motorcycles underbone, 124-cc YX125-B sport, 200-cc YX200GY off-road, 145- in urban and suburban settings and rising cc YX150-A cruising, 250-cc SGP250ST-9 street, 50-cc YX50QT-6 scooter and 198-cc YX200ZH three-wheeled models. The Company income levels in rural regions that to date has the capacity to manufacture 1.2 million motorcycles and 2.5 million have been too poor to support significant motorcycle engines annually. motorcycle markets.” --Section VI, pg. 159-60 In 2009, the Company sold 259,925 motorcycles in China. Chongqing Yinxiang Motor has a production facility in Chongqing,

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