All-terrain Vehicles

All-terrain vehicle manufacturing is one of China's fastest-growing export industries. Shipments in 2005 will approach US$500 million, up from US$300 million in 2003.

Sales are forecast to continue rising with stable prices and the launch of more powerful models stimulating demand.

Featuring an overview of the industry, as well as profiles of key manufacturers, this new report shows you how to profit from such expanding supply-market activity.

You'll also benefit from a review of developments in Taiwan, where makers differentiate themselves from their mainland China counterparts by focusing on high-end ATVs.

What you'll get

In-depth profiles of 15 leading suppliers in mainland China and Taiwan, including details on manufacturing capabilities, new products, pricing strategies and more. Based on in-person factory tours and interviews with senior managers, this impartial information is available nowhere else

Detailed profile tables of 54 additional suppliers, highlighting key information such as production capacities, output ratios, export capabilities and main machinery installed

A Product Gallery featuring 124 of the most popular export ATVs, including detailed specifications and full-color pictures

The results of Global Sources' latest supplier survey, forecasting price, product, production and R&D trends for the next 12 months

This report covers: youth/children's ATVs, sports ATVs, utility ATVs and sports-utility ATVs.

How you'll benefit

See how the new features that China's ATV suppliers are adding to their products will impact your sourcing decisions

Find new opportunities by learning which suppliers are investing in bigger factories, better equipment and new production lines to meet anticipated demand

Discover what ATV makers in Taiwan are doing to cope with intense competition from mainland China, especially in the youth/children's ATV line

Benefit from quick-to-use summary listings covering all featured suppliers, with easy-to-compare statistics, as well as verified contact details

Executive summary

In only five years, China's exports of all-terrain vehicles have reached almost US$500 million. The country's annual production of ATVs, which consists mainly of 50 to 250cc models that can run up to 100kph, already accounts for about 40 percent of the world's total ATV output.
Suppliers in the industry mostly started out as motorcycle or scooter makers, relying on their expertise in these related fields to provide them with the knowledge necessary to branch out into ATV manufacturing. More recently, a large number of companies manufacturing automotive parts have also diversified into ATVs. The technical backgrounds of these makers enable them to quickly and easily modify designs to meet changing demands.

The following are some of the key trends we see in China's ATVs export industry:

• More high-displacement models will be released in the next 12 months. Makers, especially those based in Chongqing, will be developing 300 to 600cc ATVs for those utilizing ATVs for heavy work-related tasks rather than for recreation.

• Export sales will continue to grow by double digits as demand for ATVs, especially from the United States, continues to rise.

• To prepare for the anticipated increase in exports, suppliers will be boosting production capacity by upgrading manufacturing equipment and technology, and QC systems.

China-made ATVs are classified according to application and differ mainly in engine displacement. Low-displacement models (50 to 90cc) are categorized as youth/children's ATVs and sports ATVs, while higher displacement versions (200 to 250cc) are classified as utility ATVs because they are designed mainly as work vehicles. A hybrid between utility and sports ATVs combines the features of the two types and can be used for both work and recreation.

The Products & Prices section of this report describes typical China-made ATVs, plus the main factors that differentiate low-end, midrange and high-end units from each other.

Key production processes, and how they differ in small, midsize and large companies, are discussed in the Manufacturing section.

The majority of ATV suppliers in China are wholly China-owned private enterprises, although there are a few that are foreign-invested or state-owned. The 69 makers featured in this report reflect this industry composition: more than 90 percent are private locally owned companies. Three percent are foreign-invested and another 3 percent are state-owned.

One of the suppliers interviewed for this report is Loncin, one of the largest makers of motorcycles in China. The company started volume production of ATVs only three years ago, but the product line has since grown into a multimillion-dollar business for the maker, generating US$40 million in exports last year.

ATV production in China is centered in two key locations. Chongqing, which is one of the world's largest cities, produced 100,000 ATVs last year, or about
half of China's entire ATV output for 2004.

The other major ATV production hub, Yongkang city in the province of Zhejiang, has a smaller ATV manufacturing industry, with annual capacity reaching 40,000 units.

Global Sources research teams toured the factories of 15 makers and spoke with senior executives who discussed their 2004 performance and forecasts for 2005. This report has an in-depth profile of each of these makers, as well as detailed profile tables of an additional 54 suppliers.

Industry overview

All-terrain vehicle manufacturing in China is still in its infancy, but is already one of the country's fastest growing export industries, registering around a 20 percent increase in overseas shipments annually. The country exported an estimated US$300 million worth of ATVs in 2003 and shipments this year are expected to total almost US$500 million.
China's ATV industry started out about five years ago with a few motorcycle makers based in Chongqing, a main motorcycle sourcing center, branching out into the line. Subsequently, scooter makers in Yongkang, a major scooter production hub in Zhejiang province, also followed suit, cashing in on rising ATV demand from the United States and European Union. These scooter suppliers were particularly keen to produce ATVs after a ban on scooters was implemented in several cities in the US, which reduced the demand for scooters.

As the popularity of ATVs grew, even makers from industries remotely related to the ATV sector joined the line. This has resulted in a supplier base that, at present, consists of established makers with strong backgrounds in motorcycle or scooter manufacturing and virtual start-ups whose only experience is in producing motorcycle or automotive parts such as shock absorbers and gears.

Output of powerful ATVs increasing
China's selection of ATVs consists mainly of models equipped with engines ranging in displacements from 50 to 150cc, capable of running at maximum speeds of up to 100kph. Designed mainly for recreational purposes or for use by children, these models currently account for about 80 percent of the country's total overseas shipments of ATVs.

However, some suppliers are focusing on more powerful ATVs designed to take on heavy tasks. These high-power ATVs are equipped with implements such as snow-clearing tools and hooks for farming, towing and transporting of goods. Most models have engines ranging in displacement from 300 to 600cc, but a few 650cc units are also available. The engines of these 650cc ATVs are modified versions of engines originally designed for mini vans.

Two key factors are driving the move toward high-power ATVs. First, there is an emerging group of users, particularly in the United States, that utilize ATVs for tasks other than recreation. These users are far older than the age group that ATV suppliers in China typically target. They consider ATVs as workhorses, rather than leisure vehicles, to be used for landscaping, property management and maintenance.

The second reason has to do with competition in the manufacturing industry. New makers continue to join the line, and these companies, small suppliers in particular, are churning out basic 50 to 250cc ATV models to quickly respond to demand and make a quick profit. The more established suppliers, wary of inevitable oversaturation in the low-displacement segment of the industry, are thus shifting their focus to ATVs with higher engine displacements to distinguish their products from the rest.

This strategy, however, is limited to manufacturers with a background in engine production that is strong enough to enable them to easily modify existing engine designs and boost displacement. Thus, the majority of suppliers making this move are large companies, and are based particularly in Chongqing, the main production center for ATVs in China.

Chongqing's supplier base consists mainly of well-established motorcycle makers that have expanded their product lines to include not only finished ATVs but ATV engines as well. Engine production in the city is so robust that it has grown into a thriving industry of its own. Companies now make engines not only for their own use, but also to market them as standalone products, targeting ATV makers in other production hubs and even overseas. In fact, 60 percent of the 1.1 million engines that China exported in the first half of 2004 came from Chongqing.

Even ATV makers that outsource engines will eventually be capable of releasing high-displacement models as high-power engines become more abundant in supply. Chongqing makers, however, will be a step ahead of their competitors as they already have the technological know-how necessary to produce high-power ATVs.

For makers that continue to produce low-displacement models, R&D efforts are limited to minor improvements in the ATVs' safety features and, for some, aesthetics. Enhancements related to the former include automatic brakes that minimize loss of control of the vehicle and remote controls designed especially for children's ATVs, while the latter refers to brightly colored ATV frames and bodies.

Samples of supplier profile

China Taotao Group Xiangyuan Industry Co. Ltd
Privately owned China Taotao generated US$1 million in sales from the export of ATVs in 2004, about 6 percent of total earnings for the year. The rest of the company's revenue comes from bicycles, electric scooters, motorcycles and gasoline-powered pocket bikes.

Seventy percent of exports are sold under OEM contracts while the rest is shipped bearing in-house brands. The main overseas markets for ATVs at present are the United States and European Union, each accounting for 40 percent of exports. Australia absorbs the remaining 20 percent.

Products
China Taotao's ATV line consists of two types: sports models, which account for 75 percent of output, and children's units, which make up the rest. Sports ATVs have engine displacements of 110, 125 and 250cc and range in price from US$450 to US$1,800 per unit. Children's ATVs, priced from US$280 to US$400, have a displacement of 50cc.

Engines and cylinders are from Chongqing-based suppliers. The 250cc engines are sourced from Jianshe Group, which uses Yamaha technology. Tires and wheels, as well as metals such as steel and iron used to make the frame and body, are also sourced domestically.

To regularly update its product selection, China Taotao allots about 8 percent of its annual sales to R&D. Efforts of the 16-member R&D team focus on both product form and function, which for the ATV line, means brighter colors, more safety features and higher engine displacements for upcoming models.

Due mainly to its OEM orientation, China Taotao coordinates new product development efforts with customers and component suppliers, rather than universities or research institutes. A 400cc ATV, for instance, is currently being developed in cooperation with engine manufacturers in Chongqing.

The company regards price competition as the main challenge to ATV growth in the next 12 months. Its strategy for this year therefore involves a 5 to 10 percent reduction of quotes for its products.

Manufacturing
China Taotao's 100,000sqm factory in Jinyun, Zhejiang is mainly for the manufacture of ATV frames and bodies, assembly and testing. Housed within the facility are 12 bending machines and 50 welding machines that are used for machining ATV frames and the company's other products. Four plastic injection machines for plastic ATV parts as well as two assembly lines are also found in the factory. Plating is subcontracted to companies in Zhejiang.

Sample of product gallery

Children's/youth ATVs Buyang Model: FS401 Minimum order: One TEU Packaging type: Carton Delivery time: 7 days Indicated price: US$330.00 Description: Engine type: 50cc petrol, single-cylinder, four-stroke, air-cooled; 30kph maximum speed; 1:9 compression rate; chain-driven transmission; CDI ignition; electric start

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