Chinese Motorcycle Industry News
It is important to remember that the negative stories featured here represent a tiny minority of Chinese motorcycle export experiences, warnings should however be heeded.
Since my last installment, Part 1 of Chinese Motorcycle Import, a number of friends and colleagues have written to me with some further advice that I should pass on.
Canadian Michael Hayman has been in the motorcycle industry since the Bronze Age and is a 12 year veteran of the Chinese motorcycle industry. He advises “if you have chosen your model and want a sample order be aware that quality of the models made for sample orders could very well be different from the ones actually put in to a container for a full order.
Just use a thought experiment, if you wanted to sell a product and its wholesale depended on how the quality of a sample order was received would you not make special preparations to ensure that the samples were of the utmost quality? One of the tricks that I have learned when requesting a photograph of a particular part of the motorcycle model I am interested in is to mislead. I’ll explain. If I want to see how the welding on the swing arm looks I will request a picture of the wheel. Of course, the picture of the wheel comes complete with that of the swing arm, the difference is that no special preparations have been made to ‘posh up’ the swing arm and I can see it in the photograph in all its true glory.
Here’s a picture of a wheel and swing arm that I requested recently, the company was too lazy to scrape of the slag and spatter which is gloriously revealed in the photo. Give them distractions and you will get the truth. Here’s another little gem of knowledge from me to you.
If you are visiting a factory for the first time and you (of course) are interested to know how organized they are…visit the toilet! You can tell a lot by the way a factory operates by looking at its toilet. Is it clean? Tidy? Well decorated and organized? If a company is meticulous enough to pay attention to those facilities then the chances are good that they will pay the same attention to their research and development and quality testing programs.”
After deciding on the products that you want to order they will then be made, the time it takes from the start to the end of this production is called the “lead time.” The over-riding hope is that the company that you deal with will be honest about your lead time in order to enable you to make preparations for receiving your goods; this is not always the case. The lead-time for first orders are notoriously tricky as the factory you are using develops motorcycles to your specs, repeat orders do run more smoothly.
If a motorcycle company gives you a lead-time of 1 month it would be advisable to regard this as being over-optimistic! Whatever lead-time is given put another month on the end of it for good measure. If your lead-time has come and gone without result and you are promised another one ask the export manager of the company to send it to you in writing with an agreement that you will get a discount if that lead-time is not met; there is a very good chance that their next estimate at a lead-time will be completely truthful.
Terms of payment are another key issue. The standard terms of a motorcycle company are that they will start producing your order after receiving a 30% down payment on the total order. The rest of the payment will be received during the containers’ freight to their destination on production of the bill of lading. You are then able to take the released goods from the port of arrival. Some companies will accept a ‘letter of credit’ (LC) from the bank. This system is not so widespread and can (sometimes) indicate that a company is struggling for business especially if they accept an LC for a first order as an LC is more generally accepted from regular customers or import companies of a reputable and sizable reputation. There are other systems of payment but these are the most common.
I have received horror stories from inexperienced importers who have happily confirmed that the goods documented on their bills of lading are the goods they have ordered only to receive the wrong products; one such customer from the Dutch Antilles confidently ordered a small container of 250cc ATVs from a trading company in Zhejiang province. On receipt of his goods he discovered that he had received the much cheaper 50cc “kiddie quads” a child’s toy. He had not checked his bill of lading properly and had released the balance of his invoice before receiving the incorrect goods. On trying to contact the company he had purchased them from he found that they were not responding.
I conducted a search for him but the company in question had disappeared; the address advertised in their website did not exist. He had been the subject of a scam and never recouped the price difference between the 250cc and 50cc quads.
If you receive the correct shipment but find the products to be inferior in quality to the ones you had ordered (or different to the sample) do not hesitate to contact the company and threaten to expose their short-comings in ChinaMotor magazine. China does have a form of trading standards office which you can contact but believe me; you will have a much better and faster result contacting David McMullan at ChinaMotor Magazine.
Now that you know what to do, happy importing!