Cycle News is a weekly magazine that covers all aspects of motorcycling including Supercross, Motocross and MotoGP as well as new motorcycles
Issue link: https://magazine.cyclenews.com/i/217065
P24 IN THE WIND CHINESE MARKET SLUMPS C hina is the world's largest motorcycle industry, with 27 million motorcycles manufactured there in 2012. KTM's entry into the Chinese market, after forging an alliance with local high-end manufacturer CFMoto to assemble its 200 and 390 Duke models from CKD kits manufactured at its partner Bajaj Auto's plant in India, and to import fully built up larger capacity models, contrasts with a continued decline in demand for small capacity Chinese-built models. According to official figures recently released, Chinese motorcycle production continued to fall by 5.63 percent in August 2013 to 1,781,600 units (for just that month!), and overall sales by 2.40 percent to 1,829,100 units (indicating the disposal of stockpiled machines), with a year-onyear decrease of 8.97 percent and 8.11 percent, respectively. From January to August this year, Chinese motorcycle industry production was down 3.58 percent to 14,943,900 units, and overall sales decreased by 3.07 percent to 15,156,800 machines. However, domestic sales actually increased in August by 2.28 percent to 1,099,200 units, indicating that the real core problem facing Chinese manufacturers is negative export growth in the face of increased competitive pressure in overseas markets, primarily from India's Bajaj Auto, The CF Moto facility in China. and Honda. The Japanese giant has exploited the cost advantages of its much-expanded Thai factory to offer a superior quality product to Chinese manufacturers, at lower prices. And this is a situation which is likely to get worse for China Inc., as India's largest manufacturer Hero Moto Corp. begins to ramp up sales of its products on a global basis in the wake of its divorce from Honda, which liberated it from the previous restriction of selling its products only in India, Pakistan, Sri Lanka and Bangladesh so as not to compete directly with Honda's own models elsewhere. Demand in Asian and African countries is shifting from selling price to quality, annulling the price advantage of low-cost Chinese-built models. Total Chinese export sales volume declined for the three consecutive months up to the end of August, with a total of 6,159,400 units representing $3.339 billion. In August alone, Chinese motorcycle export volume decreased by 8.75 percent to 729,900 units, a year-on-year reduction in sales of 1.35 percent. While local sales of 50cc bikes have collapsed by 14.53 percent so far in 2013, and more popular 110cc-250cc models are flat lining, relatively speaking, larger displacement Chinese-built bikes represented by CFMoto's 650c parallel-twin range, and Benelli's 600cc four-cylinder BN600R