The real situation of Chinese motorcycles in Africa: facing Indian motorcycles have no power to fight back!

 Motorcycle in Africa

 Today I want to talk to you about the motorcycle market in Africa.

 Why do we have to talk about this topic?

 Because I recently wrote an article in which I explained how Chinese motorcycles compete with Japanese motorcycles in the Vietnamese market for over 20 years and then were completely squeezed out of the market by the Japanese.

 After this article was published, while most of my friends acknowledged my opinion, others said that the failure of Chinese motorcycle companies in the Vietnamese market was not only due to their own problems, but also due to the secret restrictions on Chinese companies in Vietnam. This is not only due to the problems of Chinese motorcycle companies themselves, but also due to Vietnamese restrictions on Chinese companies.

 Although Chinese motorcycle companies have lost the Vietnamese market, they have long been exploring the African market, mainly in Africa.

In the African market, Chinese motorcycle companies are the absolute king.

 Products from the Baj Group of India

 I thought they were right and started looking for information, but my research shows that the real African motorcycle market is contrary to what they thought.

 Chinese motorcycle companies don't dominate the African market. The African motorcycle market really dominates India's Baji Group.

 Africa's mainstream two-wheeled and three-wheel markets are largely monopolized, while Africa's high-end motorcycle market is dominated by Japanese motorcycle companies such as Honda and Yamaha.

 Although Chinese motorcycle companies entered the African market around 2003, they have not succeeded in gaining a considerable share of the African motorcycle market in the past 20 years, let alone becoming the "absolute king".

Here is a brief overview of the African motorcycle market.

 African motorcycle

01.

 In terms of the motorcycle ownership in different countries in Africa, we can say that the motorcycle ownership in each country is not high.

 It is no exaggeration to say that the number of motorcycles in Indonesia alone is the number of the entire African continent.

 According to the Indonesian Motorcycle Industry Association, Indonesia will sell 6.53 million motorcycles a year in 2019, down from the 8.03 million motorcycles sold nationwide in 2011 and 7.14 million motorcycles in 2012.

 In fact, Indonesia is already the third-largest motorcycle market in the world.

 How many motorcycles are there on the entire African continent?

 African media estimates that there will be at least 30 million motorcycles in Africa by 2020. In 2016 alone, 2.6 million motorcycles were registered on the continent.

Of all African countries, South Africa, Egypt, Nigeria and Morocco account for another 80 percent of all African motorcycle sales.

 The Chongqing Guangyu Motorcycle Company is based in Egypt

In terms of market share, who are the top seven players in the African motorcycle market?

India's Baj Group (Bajaj);

Suzuki (Japan);

Yamaha (Japan);

Austrian KTM (KTMSportmotorcycleAG);

Honda, the Indian hero (currently 100% owned by an Indian company);

Honda (Japan);

 TVS Corporation of India (TVSMotor);

 Baji Group motorcycles are sold mainly sold in India with a market share of over 35% in South Africa, Egypt and Nigeria.

 In the Nigerian market, for example, Indian motorcycle maker Bajie exported 500,000 vehicles in 2015 alone, long capturing 40% of the Nigerian market.

So, how are Chinese motorcycle companies performing in the African market?

 African motorcycle

02.

 Chinese motorcycle companies are also not exempt from difficulties in Africa, ranking 10th in total sales in Africa.

 However, the 10th ranked Chinese motorcycle company is not well-known brands like Jialing, Lifan or Haojue, but Chongqing Guangyu Motorcycle Company, which focuses on China's low-cost rural market and mainly produces three-wheeled motorcycles.

Why do the products of Chinese motorcycle companies not even compare with those of Indian companies in Africa?

 In my opinion, there are several reasons why this is true:

 First, the African market is flooded with used motorcycles from Japan, South Korea, Europe and the United States. The prices of these used motorcycles are still far from those of the new ones, and the quality of these used motorcycles from the developed countries is guaranteed, and buyers can buy and use them for five to six years.

 In South Africa, the average age of a used motorcycle is 8 years, which is a considerable time.

 And these used motorcycles have entered the new motorcycle market.

 Second, it is the issue of intellectual property rights. I have no intention to discuss whether the Chinese motorcycle company on its engine and other major motorcycle parts have their own intellectual property rights, but when China's main motorcycle into the African market, especially in South Africa, Egypt, Nigeria and Morocco four big markets, intellectual property become other foreign motorcycle companies prevent China's main motorcycle companies to enter the "roadblock".

 Chongqing Longxin initially wanted to enter the South African market as an engine supplier, but was far ahead of Japan's Honda.

 In 2004, Honda sued Longxin in a South African court for patent infringement of the GX 160 engine, which lasted for seven years, until Honda and Longxin settled out of court in 2011, before Longxin's products entered the South African market.

 Third, this is of course the old problem facing Chinese motorcycle companies in the Vietnamese market: internal distortion and price wars. Behind the extreme price war, Chinese motorcycle companies do not have enough profits to fully improve their after-sales channels. As a result, the market obtained through low prices is handed over due to poor after-sales service.

What did Indian motorcycle companies do to conquer the African market?

 African motorcycle

03.

 First, although Indian motorcycle companies initially relied on joint ventures with Japanese motorcycle companies to acquire the latest motorcycle technology, Indian motorcycle companies have never had an intellectual property dispute with Japanese motorcycle companies in the African market.

 Whatever the Indian companies does, it at least allows Indian motorcycle companies to have unimpeded access to the African market.

 Secondly, Indian motorcycle companies have established better after-sales service and sales networks in African countries, especially in South Africa, where there are a large number of Indian expatriates.

 Since India was a British colony for a long time, Indian-origin immigrants settled with British colonists in all British colonies around the world, including Africa.

 Especially in South Africa, a large number of Indian immigrants arrived with the British after the Boer War. Even the famous Indian politician Mahatma Gandhi remained in South Africa for 21 years.

 It can be said that Indian motorcycle companies have a better "home field advantage" in Africa than the Chinese.

 At the same time, after the establishment of joint ventures with Japan, the quality of Indian motorcycle companies has been significantly improved. It can be said that the current level of Indian motorcycles is at the same level as that of Chinese motorcycle companies.

To sum up, we can say that in the African market, Indian motorcycle companies are the real absolute king, while the market share of Chinese motorcycle companies in Africa is actually not as big as they imagined.