Modularization in the Chinese Motorcycles Industry

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Case Details:

Case Code : BSTR165
Case Length : 19 Pages
Period : 1995-2005
Organization : -
Pub Date : 2005
Teaching Note : Not Available Countries : China
Industry : Motorcycles

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Growth of the Industry

The history of the Chinese motorcycle industry could be broadly divided into four phases. The first phase was the ‘exploration phase,'spread between the 1950s and the 1970s. The first Chinese motorcycle was developed in 1951 to meet the country's military needs during the Korean War. It was developed on the lines of K500, a German model used in World War II. Till the end of 1970s, motorcycles produced in China mainly catered to the military needs...

Modularization at Chongqing Province

Geographically, the operations of motorcycle manufacturing companies in China were clustered around three regions – Chongqing, Guangdong and Zhejiang (Refer Table I for region wise motorcycle production details). Chongqing had an annual production capacity of over five million. By 2001, the annual production and sales of the region had reached around 3.3 million units and Chongqing came to be known as the ‘motorcycle capital of China.'The motorcycle exports from the region accounted for nearly 2/3 of the total motorcycle exports in China. Many famous motorcycle manufacturers like "Jialing," "Jianshe," "Lifan," "Zongshen" and "Loncin Group" and many small assemblers operated from Chongqing, contributing to the region's dominance in motorcycle industry (Refer Exhibit V for leading motorcycle manufacturers in Chongqing)...

The after Shocks

By the early 2000s, Chinese motorcycle manufacturers began to face a host of problems in the shape of regulatory restrictions from foreign markets, especially Vietnam. The control of import of motorcycles and their parts into the country, law suits by original manufacturers for infringing their design patents, and the Chinese Government tightening regulatory restrictions for elimination of counterfeit assemblers who remodelled foreign engines and controlling new entrants in the industry were some of the major problems. In addition to the external pressures, low quality of imitation products also became a cause of worry...

Exhibits

Exhibit I: Motorcycle Population Growth in China (1983-1995)
Exhibit II: Leading Motorcycle Manufacturers in the World
Exhibit III: Some Leading Motorcycle Manufacturers in China
Exhibit IV: Leading Motorcycle Exporting Countries in the World (1999-2003)
Exhibit V: Leading Motorcycle Manufacturers of Chongqing
Exhibit VI: Some Local Brand Motorbikes
Exhibit VII: Honda Fakes in China
Exhibit VIII: Imitation Parts
Exhibit IX: The Yamaha- Tianjin Gangtian Case
Exhibit X: WTO Agreement on Trade Related IPRS


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