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Smaller manufacturers covet new markets



 

A trip to any of Chongqing’s top 5 motorcycle factories will reveal state of the art technology (lots of robots and laser welding) which produces top quality products for the likes of BMW, Yamaha and Piaggio as well as their own brands. Here we will have a look at the other end of the spectrum.

Some years ago I visited a motorcycle manufacturer who specialized in export to Kenya. Rather than sitting imperiously in its own grounds this factory was in a small back alley trading estate in the Yang Jia Ping district of Chongqing. The inside of this plant was populated by a single production line around which about a dozen men and women busily attached various parts and fairings to the frames in what seems to be no particular order; there are no welders to be seen, everything had arrived at the factory pre-welded. There’s no research and development going into their projects, there are no design departments nor do these companies employ design companies. Quality control mainly consists of riding a finished motorcycle around the small car park for 5 minutes before passing it for export. These lads are essentially middle-men. They don’t design or produce anything. They don’t even have anything designed specifically to order, no bespoke parts. If you are lucky they will offer you models with a selection of different fairings and wheels.

Here’s the rub. For years these ‘manufacturers’ have been making a good living from importers on the African continent. Many importers there forgo efficient after-market services for cheapness and it works for them as it’s necessary for riders to have a working knowledge of their motorcycle in order to maintain and fix it themselves. This had been a fact of motorcycling life in Africa for decades but now exporting opportunities there are becoming fewer and fewer (mainly due to the arrival of Bajaj, Hero and TVS as well as cheaper Japanese models) and smaller manufacturers are looking for other markets including Europe and America.

Why Europe and America?

The markets in Europe and North America (and to a smaller degree Australia and New Zealand) are nowhere near as big as traditional Chinese motorcycle markets in terms of numbers sold, but they do have a big advantage in some ways. The biggest advantage is the profit made on each motorcycle unit exported to these regions which is far in excess of any unit sold to a developing country. This has caused many a small manufacturer to cast his greedy eye in that direction. Many of these smaller concerns have developed websites on which you can see their state of the art facilities and huge work force; they are, of course, not real photos of the plant but merely copied from the websites of other manufacturers. Also, they do not have the power to test their models for EURO 3 or 4, DOT or other certificates of conformity needed around the world but will invite the prospective importer to do that for themselves (actually, nearly all Chinese motorcycle manufacturers are able to get parts to construct a working motorcycle that can pass the EURO 3 COC. EURO 4, DOT, EPA and CARB are an entirely different matter) and many inexperienced importers worldwide- tempted by the cheap prices of the motorcycle units- are entering into projects with such companies.    

The problems with dealing with motorcycle manufacturers like this are manifold. I have been contacted (more than once) by importers and dealers who have started a business relationship with such companies only to find that they have gone out of business or converted their export business to electric scooters (or bicycles, tricycles etc.) as soon as they found the motorcycle export market tough going. Also, inexperienced importers may not have the relationship with EURO, DOT testing agencies necessary to guarantee a smooth ride. Some employ agencies to test the bikes for them and sometimes this is disastrous as unscrupulous agents have been known to fake the COC (this happened in America just last year) causing all concerned to face big fines. In probably the biggest case of this in recent years CFMoto, who are universally lauded as China’s most progressive motorcycle manufacturer, exported motorcycles with fuel tanks that did not operate properly to control evaporative emissions, or petrol vapours. About 1,400 vehicles were imported into America without proper emission control information labels. The EPA ordered CFMoto to recall and replace all uncertified fuel tanks with certified ones and imposed a fine of $725000 dollars on them and their partners. This was not entirely the fault of CFMoto as they had employed an agent to deal with the certification (there is no way CFMoto would have knowingly faked certification) but the negative affect on their growing reputation in America cannot be understated.

Here’s a summary; if you are inexperienced and looking to get into the importing of Chinese motorcycles follow the following rules. Visit the factory that you are in contact with. Check that they are an established manufacturer and not likely to go bust or change their business model at any time. Check that they will arrange the COC themselves. Insist on receiving copies of the COC before importing and show them to the relevant agencies in your country for verification. Most of all don’t let the thought of extra profit from cheaper motorcycles cloud your judgment when it comes to importing; it could all end in tears!

 

 


April 12, 2016
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