Motorcycle Evolution in Jiangsu & Zhejiang Area: Electrified, Personalized, with High Consumption Frequency
Chinese motorcycle market rebounded during 2019 to 2022, middle and large displacement motorcycles rose quickly, with main consumer groups in Beijing, Jinan, Chengdu, and Xi ‘an, among others. Chinese motorcycle manufacturing enterprises have finally seen signs of bottoming out. Thanks to boosting domestic motorcycle consumption, the important traditional Chinese motorcycle industrial bases, the Chongqing area, Jiangsu & Zhejiang area, Guangdong area, Shandong & Henan area, have seen important changes. This issue analyzed the main changes in the Jiangsu & Zhejiang area.
Jiangsu–large scale, electrification, higher consumption frequency
With sinking fuel motorcycle market, the survived brands, including Jincheng, Sundiro, Linhai and Yamasaki, Kymco, and ZXMotor are scattered in Jiangsu. Recently, more electric motorcycle, electric moped, and electric bike industrial clusters have formed in China, such as Wuxi gathering Yadea, Aima, Tailg, XDAO, Xinri, and Slane, and Suzhou gathering parts solution brands such as Bafang, Shengyi, Phylion, Tongsheng, XOFO and Vinka.
The electric motorcycle enterprises in Jiangsu are scaling up. Both electric motorcycle and electric motor manufacturing enterprises far exceeded the traditional fuel motorcycle manufacturing enterprises in terms of scale, production and sales. Yadea group’s FY2021 financial results showed that its operating revenue reached 26.968 billion yuan, up 39.3%; the sales in 2021 broke 13.86 million units, a year-on-year growth of 28.3%, further strengthening its world’s leading supremacy. The sales of the Chinese fuel motorcycle leader Haojue in 2021 was only 2,343,900 units. China’s overall production of fuel motorcycles in 2021 was 16,236,300 units, with sales totaling 16.252 million units.
However, the “de-grassroots” problem facing the electric motorcycle manufacturers has not been solved. “High-end” seems to be a fake concept in the traditional electric motorcycle industry. Consumers tend to prefer for traditional motorcycle manufacturer for high-end products, such as Honda V-SUN, Zongshen Cineco, and CFMoto ZEEHO. After a series of complicated and fierce competitions such as scale, price and technology wars, traditional electric two-wheeler brands entered an involution stage. Many small and medium-sized brands are squeezed in the market approach the zero profit line. With short development cycle, fast iteration speed, large product lines, electric motorcycles became quick-consumption products. The entertainment attributes and homogeneity remained to be a problem, thus, no classic models appeared. Quick consumption leads to rapid replacement of products, resulting in waste of social resources and increased difficulty in post-market services.
Taizhou–walk on the edge of a knife
Zhejiang Taizhou has always been a core production base of Chinese scooter, relying on the advantages of mold and plastic parts cluster. But after the reshuffle in the motorcycle industry, apart from Wangye, other major Taizhou players including Benzhou and Jonway have gradually faded out of the two-wheeled motorcycle field. Qianjiang (including Benelli, KEEWAY, QJMOTOR), ZNEN (including the acquired Moto Morini), ARIIC, TARO, and Tianying have formed the new motorcycle manufacturing forces in Taizhou. Taizhou’s emerging brands generally focus on the single popular product strategy, which not only exists in the vehicle manufacturing enterprises, but also the plastic parts development enterprises. Their single product expectations are too high, the product consistency, stability and intergenerational planning are still insufficient.
We need to talk about Qianjiang separately. China Securities Journal disclosed that Qianjiang (stock code 000913) achieved a total operating revenue of 4.309 billion yuan in 2021. Most importantly, it contributed important production and sales in large displacement models. In 2021, the sales of Qianjiang’s 250cc and above models were 58,000 units in the domestic market (a 20% year-on-year increase) and 54,000 units in overseas market (a 53% year-on-year increase), with the domestic market share of 21.1% and overseas market share of 29.4% ranking first in the industry.
The story about the QJ300-12 and BD300-15 (Chinchilla ) pushed Qianjiang to the forefront of public voice. Certainly, Qianjiang is not a simple price butcher. Benelli’s comprehensive technology digestion and price sinking directly led to high sales and profits.
Hangzhou–the “Longwan” of motorcycle field
The biggest surprise of the whole Jiangsu and Zhejiang area comes from Hangzhoun and Ningbo, which is also the future Hangzhou-Ningbo area. There are the hot brands CFMoto and BENDA, the multi-brand based Longjia (Longjia, Victoria, Changjia three-wheeler), the leading designer WT, the 2022 iF award-winner Tromox, the lithium battery brand SKYRICH, the outstanding parts trader Yuanda, and huge parts industry clusters.
Following the main development direction of “Large displacement”, “intelligence”, “electrification”, CFMoto products have been well recognized in the overseas market, especially in the European and American markets. According to www.wabei.cn, CFMoto (603129) recently released its FY2021 annual report. During the reporting period, the company achieved operating revenue of RMB 7,861,487,956.52 yuan, with a year-on-year growth of 73.71%; the net profit attributable to shareholders of the listed company was 411,522,357.03 yuan, with a year-on-year increase of 12.78%. Its ATVs/UTVs have ranked first in export among the domestic brands for many consecutive years. In 2021, CFMoto ATVs/UTVs accounted for 72.62% of the total export of Chinese ATVs/UTVs, primarily to the European market. With focus on 250cc and above models, CFMoto product lines cover street bikes, cruisers, touring bikes, retro bikes and official models, with the sales of middle and large displacement models taking the leading position.
In addition to motorcycles, a large number of leading enterprises such as Shanghai Volkswagen, Geely and Bosch have settled in the Hangzhou-Ningbo area. The Hangzhou Bay New Area is benchmarked against Wolfsburg of Germany, where Volkswagen headquarters is located, to develop the “Longwan China”, the world-class automobile industry cluster center. The investment reached 1.5 trillion, matching the industrial dream of German industry 4.0.
Overall, Jiangsu & Zhejiang area still retained the highest activity of the Chinese motorcycle industry. With internet and IoT technologies, big data matrix, artificial intelligence, general aviation, automobile, intelligent electrical manufacturing, new materials, healthcare, high-end equipment, and many other high-end R&D and manufacturing industrial clusters, motorcycle manufacturing enterprises in this area have unique cluster advantages in terms of forward-looking product research and development, rapid transformation of popular models, extensive application of new materials, new technologies, big data and human-computer interaction systems, development of new marketing strategies, and bold attempts in promotion methods.