China. Since July 2019 the two-wheeler industry is fast growing

Chinese Motorcycles Market has changed mood since July 2019 and after a long decline is growing an impressive 20% with Year to Date October at 13.8 million sales, up 6.6% The e-scooter segment is booming but also vehicles with traditional combustion are fast growing.


Economic Environment

Chinese economy continues to falter in the third quarter after GDP growth slowed to a near three-decade low in the second quarter. Available data for August reveals that the official manufacturing PMI remained in negative territory for the fourth consecutive month. Lower output and overall new orders, especially from overseas, are reducing purchasing activity and capping job creation. Moreover, exports contracted again in August after rebounding in July, while imports continued to drop on low oil prices and subdued domestic demand. Meanwhile, trade disputes escalated again in late August following the U.S. decision to increase tariffs by 5% on all Chinese goods starting 1 October. 

Uncertainty regarding the China-U.S. trade war will continue to weigh on growth this year, while weak global demand and domestic economic imbalances are additional downside risks. That said, the government’s commitment to support the economy via fiscal stimulus and accommodative monetary policy should make the 6.0–6.5% growth target for this year attainable


2019 Sales Figures

Chinese Motorcycles Market is not more the locomotive of the global industry since the 2015 government decision to ban motorcycles from urban center aiming reducing the pollution.

Following the last year fall, when the market landed at 15.5 million units, over 7 million below the global top market, the Indian, in the 2019 the Chinese two-wheelers industry have lost sales up to May , while a following fast recovery allows to see year to date August figures moderately positive.

Indeed, according to date released by the Chinese Association of the Automotive Manufacturers, sales declined in the first quarter with 3.4 million, down 12%.

In the second quarter the market recovered with April sales at 1.32 million units (-2.2%), May sales at 1.45 million (+0.6%) and June at 1.58 million (+15%) ending the first half 2019 with 7.7 million sales down only 3.1%.

Since July the market has been revitalized and is growing with an impressive pace of +20%. In October sales at 1.39 million units were up 20.0% with Year to Date figures at 13.848.000 up 6.6%.


Market Trend

China’s motorcycle industry claims to have developed the largest motorcycle production center in the world. The industry is centered on three regions — Guangdong and Zhejiang provinces and Chongqing city in the Chongqing municipality.

China’s domestic motorcycle sales reached the all time record in the 2014 with 26.9 million sales.

During the 2015 the Chinese Government has taken the dramatic and unbelievable decision to ban motorcycles in urban centre (why not cars?) causing at the industry the deepest fall ever reported in the motorcycles world industry, when in the 2016 the market fell down at 16.8 million. The government has explained the decision aiming to cut down urban pollution, imploring people to use public transportation. The reason given behind this is that most Chinese motorcycles are two strokes, and these have much higher exhaust emissions than a four stroke powered motorcycle. 

In the 2017 there was a little recovery when the market was up 2% at 17.1 million, but in the 2018 the commercial battle between US and China has reduced the domestic demand for consumer goods and the 2-wheeler sector was hit again. The year ended with 15.5 million vehicles sold, losing 9.1% from the previous year.

Actually the Chinese market is the second largest in the World after being overtaken in the 2016 by India and now stands in second place with a growing gap towards the leader and ahead of Indonesia and VietnamActually China represents 24.9% of global sales.


Banning e-bikes

The consequence of banning the traditional scooter industry was to boom the-bike (moped or electric bike) industry up to a record of 30 million annual sales. However, e-bikes carry some very pronounced drawbacks in China. A walk through a Chinese city that has a high prevalence of e-bikes reveals these problems clearly: electric bicycles zipping around in every direction, dominating the bike lanes, driving on the sidewalks, virtually running down pedestrians, and weaving in and out of traffic often with little heed to road rules or personal safety.

As effect, over 10 major metropolitan areas, including Beijing, Shanghai, Guangzhou, Xiamen, and Shenzhen, have restricted or outright banned e-bike usage.


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