Feugo Power LTD – The Birth of a Chinese Motorcycle Factory
Chinese Motorcycle Industry News
In one of my previous articles I predicted the demise of many motorcycle factories and unfortunately my prediction has been vindicated; but despite the desolate landscape new shoots are seen to be breaking through.
In late January, I was invited to a foundation ceremony. Started by husband and wife team Zhang Yi Min and Wang Tian, Fuego Power Ltd is the rarest of animals, a new Chinese motorcycle factory.
More than 200 guests including media, government officials and motorcycle parts suppliers attended an event that has become an increasing rarity in China. 2 years ago motorcycle companies came and went with such frequency that even CAAM struggled to keep tabs on who was coming and going. One thing was sure then, there were more factories opening than closing; jump forward 2 years and the trend has been well and truly reversed.
Zhang Yi Min started her motorcycle industry career in the export department of the now defunct Junsun Motor Company. She commented, “In those days (around 8 years ago) it was all about profit and sales and nothing about development and technology. It didn’t surprise me when the company went out of business because the whole operation was substandard from the communication abilities of the staff who spoke poor English, to the shoddy quality of the products. At first we did well in Africa but the market there became so cut-throat that we had to reduce prices. We then tried out the South American market but our products were not good or stylish enough and we quickly lost the customers we’d fought hard to find. I could see where the company was going wrong, it was greedy for a quick profit and sacrificed the long term business plan for the quick buck. These days companies like Junsun cannot exist in the Chinese motorcycle export industry and I learned valuable lessons from their failure.”
Wang Tian served his motorcycle apprenticeship in an altogether different company. He states “Chongqing Bashan were and are an excellent motorcycle company. From the day I started they installed professionalism in me. We were taught to treat every export enquiry with respect. The Bashan research and development department was one of the best in Chongqing and for a time their on-road ATV’s sold very well in European countries. Of course, like most young Chinese lads I was ambitious to start my own company and when I met Zhang Yi Min we brought our collective knowledge together. She could see what was wrong with the industry and from my position I could see what was right.
The couple started with a cooperation agreement with government owned motorcycle and coach/ bus maker Kington Liyang. Kington had very little experience in the motorcycle export industry and formed an alliance with them in order to boost their export capacity. Zhang Yi Min and Wang Tian brought in their own export staff and designers but were hungry for more autonomy.
Zhang Yi Min states “we were keen to strike out on our own so that we could have complete control over our products, which we wanted to copyright and trade mark. Our first move was to rent production lines at the ‘Vision’ factory which was producing engines and electric scooters. We then set up our own brand name, we went with an idea by David McMullan and called it Motor head as he advised us that one of the things that puts some customers off dealing with Chinese factories are the unpronounceable Chinese names. He felt that something Western was more in order. Of course, growth brings profit and it wasn’t long before we were realising our dream of building our own factory from scratch. We’re pretty proud of our success story so far.”
Wang Tian continues “Our reputation for decent quality meant that our sales increased while others didn’t. This was a fact that was noticed by Zongshen, who we use to supply our engines. Zongshen noticed that we had a growing reputation and we were soon a ‘gold’ standard engine customer, now we are a ‘diamond.’ Our relationship with Zongshen was essential for us opening a new factory as they gave us their certification for export which in turn gave the government confidence is allocating a license to build the factory. We are not interested in the domestic market at this stage and won’t be unless radical law changes about motorcycle bans are overturned. All Chinese motorcycle factories now have access to the same supply chains that the bigger factories use which means that we can supply models of good quality.
“To really make a push in to export we have employed renowned American motorcycle designer Terry Linebarger as part of our team in an effort to improve our reputation still further and to compete with the Indian motorcycle industry on markets they are moving in to, especially Latin America.
“Like most Chinese companies we are looking at supplying our units CKD, Zongshen and Lifan have long set this trend and everyone is following now. Of course CKD parts have to be of superior quality or we’ll be spending most of our profit airmailing replacement parts to importers.”
I asked them what model of motorcycles they will be specializing in. “we are starting with 15 different models including cubs, enduros, street bikes, dirt bikes and cruisers. We will be adding more models to the list as time goes on. We make all of our models to a EURO III standard and when the factory is finished and operating at full strength we will apply for the COC (certificates of conformity) to be able to export models to the EC. We are currently doing well in Latin America especially Argentina, Chile and Peru and we’re looking to move into South Africa, Kenya and the North African markets like Morocco, Algeria and Tunisia in the near future.”
Dave McMullan, an international Ultimate MotorCycling correspondent who reports exclusively on the Chinese motorcycle industry, can be reached at firstname.lastname@example.org. Also, visit his website at englishmaninchina.org.