ON MARCH 31, 2024 BY photomotoman MOTORCYCLING
Share This!
Why Will the Chinese Dominate in the EV Market, Be it Vehicles or Motorcycles?
Chinese vehicles, irrespective of whether they are cars or motorcycles, are seeing great success in the marketplace. The question is why? What is it in terms of Chinese production that brings virtually every manufacturer to their shores, eventually?
It seems that whatever western manufacturers do, or what their governments do, the Chinese growth continues, unabated. Most western democracies and their manufacturing elites have deemed it necessary to partner with Chinese companies in order to compete. A clear example of an auto manufacturer and a motorcycle manufacturer facing the same dilemma, has created conditions whereby collaboration seems to have replaced competition.
For automobiles the example is Nissan and Honda, two fierce competitors. Nissan chief executive Makoto Uchida stated recently: “Emerging players are very aggressive and are making inroads at incredible speed. We cannot win the competition as long as we stick to conventional wisdom and a traditional approach.”
Nissan’s EV mass-market product, the Leaf, is now aging and only the Ariya, which is expensive has been launched as a viable all-electric alternative. BYD, a Chinese electric vehicle manufacturer is producing electric vehicles for sale in Japan, England and Australia for as little as $9700 US (7,600 English pounds or $14,700 AU. Even when tariffs are imposed, western nations cannot compete at those prices.
The Japanese president of Honda calls what is happening a “once-in-a-century transformation in the automotive industry”.
The Japanese have vowed to cut the costs of their EV’s by a third, launching 16 new EVs by 2026 in order to boost global sales and its competitive position.
Ford faces a similar situation. For decades, Ford has honed its engineering and supply chain for internal combustion engines (ICE), becoming as cost-effective as possible. However, the rapid introduction of EV’s and mandates for EV’s, places western manufacturers at a disadvantage, as Chinese companies began EV and battery research over 23 years ago. Add to that government funding, financial incentives and much cheaper labor costs, and Chinese manufacturers have improved the quality of electric products at an astonishing rate.
Whether Tesla, Ford or Renault, the problem remains the same.
The EV Motorcycle Conundrum
In the west, pollution and the factors that contribute to it, were not treated with the same urgency that faced Asian nations. Whether Shanghai, Beijing, Tokyo, Delhi or Mumbai, the need for a move away from ICE has been in the works for more than 20 years. It has only been the result of climate change and global warming that has moved western nations to action.
In the interim, Chinese, Indian and products from Thailand have been rapidly researching both electrification and other options. Only in the last few years in the west have these concerns become pursued by manufacturers, and the market is unprepared, still, to react to the issues facing the world in relation to CO2 emissions and global warming. Like frogs in a slowly warming pot, we failed to react. Only when the effects started to damage our ecosystem and our economic fortunes did we in the west react.
Meanwhile, in China and India, rapid electrification and the development of hybrid technologies was advancing. Every western motorcycle manufacturer with the exception of Ducati, has moved its manufacturing into China, Indian or Thailand, either as joint ventures or more recently, increased ownership of Chinese, Indian and companies from Thailand.
Will this remain a permanent fixture in the years to come? The answer is likely, yes. North American manufacturers, producing in North America find it almost impossible to compete. Not only are the markets in Europe and North America stagnant, but there is also no ready acceptance of EV technology as there is no sense of urgency, especially in North America to change. However, what it does mean, is that dominance in the manufacturing of motorcycles will increasingly be from Asia.
While many North Americans decry the purchase of Chinese and Indian brands, being historically purchasers of western manufacturers, replete with all the biases and contempt for foreign manufacturing, the younger generation have no such compunction. They see a good product, getting better, at a substantively cheaper price as a great buy. They have no intent of paying even $20,000 US for a motorcycle, when they can buy what they see as a comparable product for $10,000 or $12,000 from China.
Two motorcycle companies, KTM and those of the Pierer Mobility AG in its entirety, recently laid off Austrian employees in favour of more production in China. Where two years ago, only one motorcycle and engine were made in China, now the whole line of motorcycles either is, or will be made in China by 2026.
https://motorcycles.news/en/ktm-job-cuts/
Even ultra-expensive vehicles of both four and two wheels are seeing upwardly mobile young people, worldwide, purchase Chinese products. Their argument is simple. If you can’t show me a product that is appreciably better, longer lasting with a better warranty and resell than the Chinese counterpart, I won’t buy it.
Next year may be a watershed year for the motorcycle industry in both Europe and North America. New offerings, dealerships and economic forces are creating circumstances where companies like Harley-Davidson and Indian are increasingly losing business to foreign production. As mandates become reality in relation to EV’s and Zero-Emission Vehicles, it will be even harder for North American brands to compete. A clear example of this is how Harley-Davidson has now jumped on board with an Indian manufacturer of motorcycles in order to hopefully see an increase in its market share in Asia. Ultimately, Harley-Davidson will be importing its brand back to the USA from India. A watershed moment for the company indeed.
The future looks to favour Asian Manufacturer’s vehicles and their production overseas for the foreseeable future.
Thanks to Techradar.com for stimulating research on this subject.
Ciao…
Leave a Reply