Increase in Foreign Motorcycle Companies Manufacturing in China

Chinese Motorcycle Industry

During my visit to the recent Canton fair I couldn’t help but notice the increase in the amount of foreigners now producing motorcycle models in China.

Chinese companies have a recent history of employing foreign technical staff to help then adapt and evolve to international standards and environments but this new breed of foreign devil is quite different in terms of the fact that they are setting up their own companies in China with the aid of existing motorcycle manufacturers.

In days of yore the original foreign team manufacturing in China were an Austrian company making the “Generic” brand with cooperation from Qjiang,

Dimitri Hettinga of Holland’s Super Motor Company collaborates with Chongqing giant Yinxiang and Motorhead to produce excellent retro super-cubs and café-racers. But why manufacture in China?

Dimitri reports “China is the only country that could supply the parts and technology we required at a reasonable price. We want to be known for our value as well as our quality and no one does it better than China. Our base is in Chongqing which is the biggest motorcycle producing city in the world; 20 percent of the world’s motorcycles are made there and they have a huge motorcycle parts chain. In the past it would have been difficult to have our suppliers make the parts we need for our retro models (although we do import Dunlop tires for the café racer), but they really have their act together now and we’re more than happy to stay producing in China.”

Huge Russian motorcycle brand “Ibris” choose China to manufacture their new snowmobile products. After showcasing their “Snow dog” and “Dingo” models at Canton fair they told me “we import thousands of motorcycles from China and decided to manufacture our snow products there. China already had a history of designing snowmobiles so when we showed the factory our plans it was easy to begin production. A lot of bad things are said about the Chinese automotive industries, things like their quality is not good and that they only sell cloned models but it is no longer true. China has great potential for any foreign investor wishing to set up and cooperate with an existing factory.”

It’s not just Europeans that have set up their manufacturing bases in China. Australian brand Braaap have set up their base in Guangdong provinces Jiangmen city. After many years of producing off –road bikes (and winning consecutive world championships 2012-2013) Braaap have now produced a selection of road bikes to add to their range.

Braaap founder Brad Smith spoke to ChinaMotor magazine’s Oceana correspondent Jeremy Hamilton at Canton fair in April: “After the success we enjoyed producing and racing off-road bikes we decided to manufacture a range of specially designed road bikes for global markets. We now produce a 24 horse power Street-fighter that weighs in at 70 kg, and a 450cc café-racer with a water-cooled engine as well as the MX1, which is the pit-bike that has won the last 2 world championships. Cooperating with Chinese companies has been essential to our continuing success and it’s really been smooth going, Chinese technical staff has proved to be every bit as skilled as their Aussie counterparts, which I suppose is natural considering the size of the industry.”

There have always been many motorcycle distributors in the world who have designed their own motorcycles for final production in China but the noticeable difference now is that international companies are stationing their staff actually in China to oversee research, development, quality control and design. These companies are actually independent, autonomous manufacturers rather than an extension of the Chinese manufacturer or just a cooperative partner.

A positive side-effect of this phenomenon is the knowledge sharing which occurs. Rio Wang of Motorhead told me “we have learned a lot from our foreign partners especially in terms of the attention necessary for top quality design and the best way to affect quality control. The guys we cooperate with are used to European standards and it’s been a great education for us. I remember once going to the Loncin factory and marveling at their BMW section, Chinese guys working with Teutonic efficiency was a marvel to behold! Their worker safety standards were also a lesson we learned but I’d like to think that our foreign partners also learn a thing or two from us!”

So it would seem that times are changing and that international motorcycle distributors who would have previously imported their preferred models CKD for assembly in their home country are changing their strategies in tune with China’s increased technical nous and setting up for themselves with aid from the Chinese motorcycle companies rather than cooperating in what is better known and a “joint venture.”

International joint ventures (Loncin-BMW, Zongshen-Piaggio, Qinqi-Peugeot/ Suzuki, Jianshe-Yamaha, Sukida-Honda); have proved invaluable to the Chinese motorcycle industry for many years now. From technology sharing to promoting brand recognition or even for gaining that good old mainstay of Chinese business practice ‘face’, JV’s have long been the difference between success and failure for some Chinese motorcycle companies.

China’s  latest automotive industry policy release advises that foreign investors will be permitted to control stakes of more than 50 percent in automobile and motorcycle joint ventures with Chinese partners if their JVs are built in China’s export processing zones and aimed at overseas markets, making China a lucrative manufacturing ground for many big motorcycle companies.

The changing zeitgeist is that smaller international motorcycle companies are setting up with total autonomy with the smaller Chinese motorcycle manufacturers, hiring staff and production lines and installing their own offices and supervisors. From the evidence witnessed at Canton fair it would seem to be the shape of things to come.

If anyone out there would like more information on how to collaborate with Chinese motorcycle manufacturers in any of the ways described send me an email and I’ll endeavor to put you together with a suitable partner.