Expo Situation:
The influence of the global financial crisis on the motorcycle industry appeared fully at last year's America Dealer Expo, this experience is still fresh in the memory of many exhibiting enterprises which went to the 2009 Dealer Expo. The significance of this Dealer Expo is very special because Dealer Expo is the only professional motorcycle trade show in North America and this Dealer Expo is the first professional motorcycle trade show in the world in 2010. In general, this Dealer Expo was confined in the Indianapolis Convention Center and its scale was smaller than usual. It covered an area of 240,000 square feet; about 750 exhibitors came to the show; the number of trade visitors was not smaller than that of last year even though the exhibition scale was smaller. Although this show cannot be read as the sign for the resurrection of the motorcycle industry, it increased the confidence of the industry. The size of the Italian exhibition area and the new Italian products attracted people's attention apart from the American local distributors. Exhibitors and distributors from Taiwan of China and Middle East came and went in a continuous stream. The China exhibition area, which is composed of over 20 Chinese enterprises organised by the Heliview International Exhibition Co., Ltd and over 40 working staff, attracted many purchasers. The Chinese complete motorcycle producers including Chongqing Loncin, Ningbo Rhon, CFMOTO and Sino-Hongkong Baotian appeared at the show; auxiliary and parts producers including Kylin Helmet and Ningbo Yuanrui won purchasers' great interests with their latest products; all Chinese exhibiting enterprises won orders to different degrees.
Learning about the American Market by the Dealer Expo
Many exhibitors and purchasers spoke to the reporter with fervour and assurance in front of the CHINAMOTOR exhibition booth: the motorcycle industry is still not looking good judging from the overall economic situation; the major reason is that the consumers' weak purchasing power has been improved. The products in stock in the first half of last year are still in stock; parts of the distribution channels began to work and sales improved significantly. An American purchaser told our reporter that the parts market had no business in the first half of 2009; small amount of parts delivery appeared in the second half of 2009, but only in very small amount (several grand); it's no match to the amount of delivery in 2008 (a dozen grand), a long time is needed for the motorcycle parts market to recover to its former state. Complete motorcycle sales is zero; the reason is that Chinese motorcycle producers exported too many motorcycles to America in 2008 and the American market became over-heated. There are still many motorcycles in stock; this makes it hard for the capital flow of distributors and also increases the difficulty of promoting new products on market. The consequence of the swarming homogenized products on a market is that the market would die prematurely before its full development; this is a lesson that the Chinese enterprises should learn.
The US market's demands for motorcycle products have the following obvious features:
First, the demands for medium-and-small-displacement scooters and cross-country motorcycles are still low. The reason why these motorcycles were popular in 2008 was that the cost of car was too high due to the high price of fuel. But when the crude oil price was held steady internationally, the cost advantage of these scooters and cross-country motorcycles was lost. So it is normal that these motorcycles lost their attraction.
Second, there is a great demand for large-displacement ATVs, especially the UTVs that have agricultural functions. In the US, ATVs are usually for recreation, entertainment, and other functions but not for transportation. When the crude oil price gets stable, the large-displacement ATVs are more suitable for Americans' driving habits and agricultural use.
Third, the demand for two-wheel electric vehicle is still large. In the Unites States, the concept of environment-friendly power has already been accepted by more and more people, and meanwhile, electric vehicles have obvious advantage in terms of usage cost. The weekly average retail price of ordinary petrol is USD 2.524 or RMB 4.56 per gallon in the Unites States; while the average price of electricity is 7.38 cents or RMB 0.57 per kilowatt-hour. A 150cc scooter needs over 3 litres per 100 km, so it needs RMB 13.68; while an electric vehicle (48V/12 A) can travel 40 km with a consumption of only 0.6 kilowatt-hours which cost RMB 0.34.
Fourth, the demand for motorcycle products will undoubtedly increase. The sales volume of motorcycle had already reached 850,000 units in the Unites States in 2004. Such a large motorcycle population must need a great deal of spare parts and other motorcycle products to guarantee the requirements for maintaining and services. On the expo, those spare parts that are applicable to Japanese motorcycles attracted many distributors, because the original parts cannot meet the requirements of American customers as a result of the limitations from time, transportation and cost.
Seeing from the number of professionals who took part in the Expo, the influence of the 2010 Dealer Expo in America still cannot be replaced. According to the statistics of CHINAMOTOR, not only North American dealers enthusiastically took part in the expo, the number of South American purchasers also increased. In terms of the orders received by the participating enterprises, CHINAMOTOR believes that the American market has an obvious recovery though we cannot say that it is completely recovered. Above all, the large-displacement ATVs and electric vehicles are expected to become the new growth points.
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