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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"It is often observed that the Chinese companies have 'the
capability to modify product architectures through parts copying and remodelling.
'In particular, what has been happening in the Chinese motorcycle industry which
has become the world largest (13 million per year) can be regarded as a typical
example of the 'modification of architecture.'"1
- Chunli Lee, Takahiro Fujimoto and Jin Chen in 2002.
"It is paradoxical to observe that after a long span of
about two decades of development, even though the top companies have the
capacity of one million units and the collective production volume has overtaken
Japan to become the No. 1 in the world, the Chinese enterprises still keep on
imitating the models from foreign companies…"2
- Dongsheng Ge and Takahiro Fujimoto in 2004.
World's Largest Motorcycle Manufacturer
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Since the early 1990s, the Chinese motorcycle industry has seen a rapid
expansion. In the 1990s, China's motorcycles production grew at an average
annual rate of 46 per cent. The annual production showed a sharp increase from
less than 50,000 units in 1980 to 10 million in 1997 (Refer Exhibit I for growth
in Chinese motorcycle population between 1983 and 1995).
By 2003, China's motorcycle production was around 14 million, roughly half the
world's total motorcycles production (Refer Exhibit II for leading motorcycle
manufacturers in the world).
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Most Chinese motorcycles were offered at low prices and mainly targeted the
low-end market segment. Their popularity was not restricted to just domestic
markets.
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They were in demand in the overseas markets of
developing countries in Southeast Asia, South Asia, Africa and developed
countries in the Middle East. In fiscal 2002, motorcycle exports by
China were about 3.43 million units ($650 mn), which increased to almost
nine million motorcycles ($1.45 bn) in fiscal 2004.
More than 150 motorcycle manufacturing companies operated in China. The
five leading Chinese motorcycles manufacturers, Qingqi, Jialing,
Zhejiang, Jincheng and Xindazhou had captured 43.7 per cent share in the
domestic market (Refer Exhibit III for leading motorcycle manufacturers
in China). |
Modularization in the Chinese Motorcycles Industry
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