China market is tough for foreign makers

According to the report: The Chinese buy some 16 million-plus bikes a year. And China's legion of bike manufacturers rule the market. That's largely because ferocious price-cutting has made life miserable for globally dominant players such as Honda, Yamaha and Suzuki…Japanese manufacturers have sizable local production networks, and high-end luxury bike producers such as BMW's motorcycle division and Harley-Davidson continue to see big potential for their brands in China…However, unlike the auto sector, where China brands are still developing, mainland motorcycles enjoy a huge and loyal following. Chinese players such as Guangzhou Motors, Zongshen Motorcycle (one of its 150cc cruisers is pictured here), Shanghai Feiling Motorcycle, and scores of smaller bike makers control more than two-thirds of the domestic market. In the mass market segment for midsize street bikes Chinese rivals can undercut Japanese rivals, in some cases, by about 30 per cent on price.

"The number one problem for Japanese motorcycle makers in China is that there are too many local makers who churn out cheap bikes, setting quality aside, and they sell well," says Noriyuki Matsushima, an analyst at Nikko Citi Securities in Tokyo.