Export Strategies of Chinese Motorcycle companies

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February 03, 2010

Export Strategies of Chinese Motorcycle companies

The Chinese motorcycle manufacturing industry was once synonymous with low-quality on the international market. It was the loose consumer environment with its low requirements for brands and technology that had earned valuable time and nourishment for many enterprises to grow, and now, all of these have become good memories. After having stored enough power from the long-term struggle in the domestic market, all those enterprises are now facing the inevitable fact that is to enter the international market.

There is no excuse in market competition. The pain resulted when Chinese enterprises compete with those huge multinational enterprises might be good for Chinese motorcycle enterprises, which are still groping their way in the developing process. Therefore, this article is going to analyse several difficulties in the export of Chinese motorcycle industry.

Current Status of Chinese Motorcycle Enterprises & American Consumption
It is well known that the USA is a country which appreciates law and credit. The construction of entrepreneurial credit culture plays a very important role in building up a new image and trying for a sustainable development for enterprises. In the USA, enterprises always cherish the social credit which is not easy to get, while in China, many enterprises just ignore it. Due to the great pressure from living environment, Chinese motorcycle enterprises are unlimitedly thirsty for profits and even let profit direct their development and are totally ignorant of making an overall strategic plan. This will lead the companies to the misunderstanding of bending solely on profit.

Now in China, the listing of new products is generally through the type-approval carried out by relevant testing departments, while the supervision strength in COP (consistency of production) is not great, which results in the deviation between the performances of those samples being tested and those mass-produced ones. According to the requirement of COP, the mass-produced products should be identical with those samples that have been certificated. Such a requirement plays a significant role in guaranteeing the product quality.

The USA has clear and standard requirements on COP. The emissions of motorcycles should always meet the requirements established during type-approval in their whole life cycle. Such a prescription helps ensure that motorcycles can always have good emission characteristics during their life period, guaranteeing the effective implementation of the emission standard.

China also has some similar prescriptions on COP, but has no definition on how to effectively implement them. If things go on like this, Chinese enterprises would take this wrong idea that once those samples pass the test, everything would be okay, and they would pay less attention to monitoring the mass-producing process. More severely, many enterprises consider that they can squeeze out more profits due to the configurations between vehicles delivering for check and mass-producing vehicles. This will cause the product quality of enterprises to linger in low levels and therefore lose the precious reputation in market competition.

China has recently strengthened the force of supervision on the motorcycle industry. The State Environment Protection Agency of China has carried out an spot check on motorcycles in the markets and found that there were both good and bad motorcycles in the market. But this action is a positive drive to promote the qualities of motorcycle industry. It is hoped that NDRC and CQC can continue to strengthen the monitoring power on the quality of motorcycle circulation source so as to help the enterprises establish the concepts of quality and brand, make good foundations for future export.

The internationalisation road of Chinese motorcycle industry
To fulfill the internationalisation plan, the Chinese motorcycle industry should firstly accelerate the process of promoting brand image, so as to change the original impression that the Chinese motorcycle industry has left to the world. Due to the slow growth of the Chinese domestic motorcycle market, the pressure brought by under utilisation of capacity has made export extremely important. It is an inevitable trend for Chinese motorcycle manufacturers to expand to the whole world. But now, those Chinese self-owned motorcycle brands are still the in infancy stage and can only be exported to those third-world countries which have comparatively low requirements on products. Therefore, it is only when Chinese self-owned brands reach the level to compete with those international brands in product development, quality stability, brand management and so on, can these brands get a share in the markets of developed countries.

Secondly, Chinese enterprises should further improve the quality awareness of managers and technical content of motorcycles, and strengthen the management power. Enterprises should strictly follow the standards in each stage from new product development, production process to delivery inspection, so as to take responsibility for customers, enterprises and win public praise in foreign markets.

In addition, Chinese enterprises should make a strategic development plan which should be detailed and pragmatic, and then go ahead steadily and surely, so as to guarantee a sound and sustainable development. The foreign motorcycle markets usually call for consumption culture which can only be connected with the brand. Compared with those multinational companies which have a brand heritage of over 100 years, the influence and gold content of Chinese motorcycle brands are pretty low. However, some multinational brands have already formed brand matrix, intact product chains which covers each segment market. But some Chinese motorcycle enterprises are short of an overall systematic thought on the construction of brand, also short of continuity on brand architecture, and deepness and broadness on propaganda and public relations. All of these constitute the main reasons for the difficulties the Chinese motorcycle industry meets in its export process.

Finally, Chinese enterprises should realise the real coalesce with the world. Many Chinese motorcycle enterprises' export is still in the OEM stage, mainly relying on the brand resources of several foreign enterprises and distributors to earn a little processing charge. The network resource and market information are controlled by foreign party. Chinese export brands still need to deal with a rather strange international market. The much more complicated environment of laws and policies as well as different procedure for handling affairs might block Chinese motorcycle enterprises' expansion in foreign market.

Besides those factors from the market, the organisations in the Chinese motorcycle industry should also enhance the cooperation and communication with the USA on the emission standard and certification work between the two countries and help Chinese enterprises understand the relevant standards and certification assessing work of the American EPA, so as to drive the product export to the American market, and realise a harmonious joint venture of the two countries' regulations and standards.

Author: chinamotor - Source:CHINAMOTOR

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