Cheap Cars – A Factor for China’s Motorcycle Industry Downturn

Cheap Cars - A Factor for China’s Motorcycle Industry Downturn

Cheap Cars - A Factor for China’s Motorcycle Industry DownturnChina’s Motorcycle Industry Downturn

In recent months. I’ve written a lot about the contributing factors for the slight downturn of the Chinese motorcycle industry, mainly concentrating on the ban on motorcycles in Chinese urban centers and the threat from the Indian industry.

But there is another factor to the downturn – cheap Chinese cars!

Three years ago I wrote about the way that Chinese motorcycles had revolutionized the agricultural industries in many developing nations. In the past, horses, oxen, mules and other beasts of burden were invaluable for agrarian families in many countries.

These animals played a key role in plowing farmland, fetching water and transporting crops from fields to the threshing floor. Carriages and oxcarts were the major transportation vehicles in the rural areas until the invasion of cheap Chinese motorcycles changed everything.

Cheap Chinese motorcycles have helped to mechanize small agricultural farms and with it play a big part in the development and improvement of crop and livestock transport, one villager in Chile remembers “riding a motorcycle to visit relatives and friends, driving a tricycle to transport farm produce and goods for crops growing and cropland plowing. The other benefits enjoyed were that villagers could travel easily to other villages and find love! Chinese motorcycles brought a whole new way of life to rural areas and opened up many new avenues for trade and leisure.

“The irony of this phenomenon is that the Chinese motorcycles had helped agrarian workers to make more money, to start turning a profit rather than just growing to exist. Mechanized farmers could grow a surplus and then transport the surplus to market on the tricycles which had replaced their motorcycles. Now the automotive evolution has continued and many farmers now have Chinese cars and mini-vans.”

Three years ago I spoke to Bolivian teacher and motorcycle safety instructor Diego Torres about the automation of the rural areas in Bolivia.

He commented then “In the wilds of Bolivia getting their prized agricultural produce to market meant that someone had to carry a giant basket on a back-breaking, day long trek through narrow mountain trails. That is now changing, thanks in large part to Chinese motorcycles”. Fast forward 3 years and it’s a different story. Diego reports” the change to Chinese cars has happened so rapidly and is due to a few different factors.

An important factor is that the quality of the country roads is improving year to tear. In the past it would have been difficult for anything other than a motorcycle or a Range Rover to transport goods, now the roads have improved to the level that family cars can comfortably use them. Also, the surplus money, some of which was produced due to the usefulness of Chinese motorcycles has enabled farmers a better standard of living with a greater disposable income.

Add to this the influx of very cheap Chinese cars and you have a situation where agricultural workers are now saving to buy cars and keeping their bikes as a secondary means of transport, which basically means it is not necessary for them to update them.”

In Mongolia which has a legendary history of horse travel Chinese motorcycles had been the main replacement for the nag, until now. Motorcycle importer Erdene Jagar of Ulan Bator commented “you can now get a hire-purchase agreement with the bank when opting to buy a Chinese car, this was originally set up to enable the poorer farmers to buy motorcycles but now they’ve taken a step up the automotive evolutionary chain.

“They have been a revolution for these guys who can now trade at much further distances than before. Mongolia is the most unpopulated country on earth per square mile so traveling for trade has always been a difficult business. Not so now due to the affordability of cars although sales of motorcycles (mainly Chinese) have taken a bit of a hit.”

As of 2012 exports of Chinese automobiles were about 1 million vehicles per year and rapidly increasing compared to China’s motorcycle export figures which have dipped under 10 million and are decreasing. Like the motorcycle export industry most sales were made to emerging economies such as Algeria, Brazil, Chile, Egypt, Iraq, Iran, Russia, Saudi Arabia, South Africa, or Syria where a Chinese-made car (such as a BYD, Dongfeng Motor, FAW Group, SAIC Motor, Lifan, Chang’an (Chana), Geely, Chery, Hafei, Jianghuai (JAC) or Great Wall) sells for about half of what a equivalent model manufactured by a international brand such as Honda or Ford does. The Chinese cars are based on modern designs but economically made and they are chiefly lacking in safety and performance features. Cars made in China by international joint ventures such as Chang’an Ford are normally not exported.

Much the same as the Chinese motorcycle industry the quality of Chinese cars is rapidly increasing but according to a report conducted by J. D. Power and Associates they are not predicted to reach parity with traditional multinational producers until at least 2018.

Some Chinese motorcycle manufacturers have been producing cars for many years and others are either just new to the market or have future plans to expand in to automobiles. Of all the motorcycle companies in China, Lifan have developed the most successful cars, trucks and mini-vans with a yearly production ability of 300000 units.

At a recent expo I saw that Loncin had produced a mini-van (which looked just like an old Bedford Rascal) and there are reports of other motorcycle manufacturers following the trend. One motorcycle manufacturing trend that has been followed is that of ‘cloning’ other models. At Canton Fair three years ago I was astonished to see a Mini Cooper on the Lifan motorcycle stand. On closer inspection the vehicle turned out not to be a Mini at all but a very similar design. Only yesterday (at time of writing) I noticed a Chang’an car which was a dead ringer for a Range Rover “Evoque.”

The automobile phenomenon has however caused motorcycle manufacturers to look more at the leisure markets triggering an increase in spending on research and development, original design and marketing.

Dave McMullan, an international Ultimate MotorCycling correspondent who reports exclusively on the Chinese motorcycle industry, can be reached at Also, visit the website ChinaMotor Magazine.


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