Qianjiang’s “Halftime Victory” Driven by New Opportunities
Motorcycles are gaining popularity, which can be verified through data: in the first half of 2022, the number of applicants for motorcycle licence in Beijing was 120,028, accounting for about 45% of the total motor vehicle driving license test, and the number of female applicants increased significantly, accounting for nearly half of the total applicants. According to the statistics of China Chamber of Commerce for Motorcycles, in the first half of 2022, the production and sales of large displacement motorcycles were 211,500 units and 222,200 units, respectively, with year-on-year growth of 40.56% and 46.59%. In this market trend, the traditional motorcycle manufacturer Qianjiang also ushered in its “halftime victory” this year.
New opportunities drive growth
2022 is a “big year” for Qianjiang. According to its semi-annual report, Qianjiang achieved sales revenue of 2.583 billion yuan in the first half of the year, with a year-on-year growth of 21.20%; Net profit attributable to shareholders of the listed company reached 200 million yuan, up 16.95% year-on-year.
Qianjiang’s significant growth in performance is mainly due to the large sales volume of large-displacement products, which increases the unit price and profit performance of its products. In the first half of this year, Qianjiang sold 82,000 large-displacement motorcycles, up about 68.36% year-on-year. In the third quarter, Qianjiang continued to maintain high growth relying on the continuous hot sales of large displacement products, achieving revenue of 1.897 billion yuan, up 44.26% year-on-year; Net profit was 210 million yuan, a year-on-year increase of 102.11%; Net profit deducting non-recurring profit and loss was 202 million yuan, up 83.42% year-on-year.
It’s worth noting that this isn’t the first time Qianjiang succeeded in large displacement products. For the past nine years, Qianjiang had been No. 1 in the large displacement market. Qianjiang acquired Benelli in 2005, and focused on the research and development of large displacement sports and entertainment motorcycles, becoming an ice breaker of domestic independent large-displacement technology and a pioneer of four-cylinder models.
Previously, due to motorcycle bans and changes in consumer demand, the motorcycle industry became a sunset industry. Domestic motorcycle sales have declined for ten years in a row since 2008. During this period, Qianjiang saw net profit losses for many consecutive years. But that all started to change in 2019. In this year, the demand change made the motorcycle industry rebound across the board, and the global motorcycle sales reached 52,934,700 units. According to Statista, the global motorcycle market scale has reached $124.387 billion in 2019. In 2020 and 2021, due to the impact of COVID-19, the industry scale has declined slightly, which still exceeded $100 billion.
In 2022, due to the new travel demand caused by the pandemic, the motorcycle industry has become more popular, and the sales of large displacement products have seen a sharp growth. This is the time Qianjiang got its new opportunities. Data show that from January to August 2022, Qianjiang’s large displacement products above 250cc increased by 135.62% compared to the same period last year, with domestic sales of nearly 84,000 units, continuing to lead the industry.
Qianjiang’s motorcycle building method
As the saying goes, “If you want to do a good job, you must first improve your tools”. Behind Qianjiang’s growth, it is the accumulation of years of manufacturing experience, technology research and development, and product quality management.
Qianjiang is the first to introduce the ‘IATF16949′ whole-process automotive quality management system in the industry. The introduction of this automobile quality management system is related to Geely’s investment. In late 2016, Geely became Qianjiang’s largest shareholder. At that time, the domestic motorcycle industry is still relatively backward in quality management system. Geely brought a large number of Geely executives and professionals with quality management experience to Qianjiang, and also mature quality management models into the production line.
Qianjiang also introduced Geely’s suppliers in the auto industry, and optimized the original supplier system. In addition, Qianjiang invested a large amount of automation equipment to upgrade the internal manufacturing capacity, established the all-channel standardized service management mode, and gradually formed its own quality management method.
In the manufacturing process, Qianjiang follows the standardized production and strict product standards for inspection. Quality control points are established to ensure product safety in relevant links such as wiring installation and frame welding. With the introduction of the quality management system, the corresponding tests in the development process, the consistency assurance of suppliers’ parts, the consistency assurance in the production process and the delivery inspection standards have been significantly improved. The defect rate of all product series has also been significantly reduced.
Thanks to the comprehensive internal and external layout, Qianjiang has become one of the few motorcycle enterprises in China that independently develop and manufacture all models from 50cc to 1200cc. Compared with the “ready-to-use” supply chain cooperation of other brands, Qianjiang is synchronized with the suppliers’ development. A large number of special processing techniques has created parts with Qianjiang characteristics.
Ultimate battlefield under electrification and globalization
If the transformation of the supply chain is the key to Qianjiang’s halftime victory, then motorcycle electrification and globalization will be the final battle facing Qianjiang.
Honda recently announced that it will stop production of two-wheeled fuel motorcycles in the mid-2040s and convert to pure electric vehicles. Honda said it will launch over 10 EV models by 2025 and aims to sell 3.5 million electric motorcycles by 2030, accounting for about 15% of the global sales. Honda currently sells 100,000 to 200,000 electric models annually, less than 1% of the total. Yamaha also put forward a plan to increase the proportion of electric motorcycles to 90% by 2050.
In fact, compared with the those enterprises, Qianjiang is more forward-looking in electrification layout. Since 2000, Qianjiang has been exploring the development and production of electric two-wheelers. But limited by the domestic market environment and policy constraints, it shifted to overseas market for research of related patent technology. After decades of work, Qianjiang has accumulated rich practical experience and integrated solutions in the development, application, equipment access, electronics and information ecology of the new energy.
In 2022, Qianjiang launched a comprehensive layout of electric two-wheelers. For example, it has built a brand new new energy production base, and has realized independent production, sales and operation. With a rich brand matrix, including QJMOTOR e and Molinks, Qianjiang has expanded relevant layout covering new national standard electric bicycles, electric mopeds, and high-speed electric motorcycles.
Motorcycle electrification is likely to take on the same path of the electrification of automobile industry. International and Chinese manufacturers are generally standing on the same starting line. This means that Qianjiang will race with overseas brands such as Honda on a global scale. Qianjiang’s extensive international cooperation has laid it a good foundation for this new competition.
When Qianjiang’s internal supply chain transformation was completed, the external ecosystem also formed quickly. Since 2019, a large number of internationally renowned motorcycle enterprises have actively sought cooperation with Qianjiang. In 2019, Qianjiang and Harley reached a cooperation agreement. The two sides will jointly launch 338cc high-end motorcycle model in the Chinese market for initial sales, and then promote it to other Asian markets. In 2021, Qianjiang reached a cooperation agreement with KYMCO. The two parties conducts new product research and development based on the new scooter platform they jointly built. In 2021, Qianjiang reached a development agreement with Peugeot for joint parts development and complete vehicle production based on the 125cc and 300cc models.
Qianjiang has established extensive multinational cooperation, through which Qianjiang has incorporated international elements into its vehicle design. In addition, it shares cooperative supplier resources. In general, Qianjiang has secured its leading position in the domestic market. More outstanding performance is expected from Qianjiang globalization and electrification battlefield.