Scooters

Although exports continue to expand, China's scooter industry has undergone restructuring as suppliers come to terms with new safety and environmental regulations in the U.S., their main export market.

These new standards, which include emission checks, safety tests and speed-limit controls, have kick started a rapid industry consolidation, with major implications for buyers worldwide.

Discover where to find the best sourcing opportunities in this shrinking industry, with profiles of 80 key suppliers spotlighting new products, pricing strategies, R&D plans and more.

You'll also benefit from a complete industry overview, offering production forecasts and information on design trends, QC developments and other vital issues that will impact your sourcing activities.

What you'll get

Deep profiles of 20 leading manufacturers, based on factory visits and interviews with senior managers, against which you can benchmark other suppliers you contact. This information is available nowhere else.

Detailed profile tables of 60 additional suppliers, containing core sourcing information such as production capacities, output ratios, R&D capabilities and export markets

The results of Global Sources' latest supplier survey that summarize makers' projections for the next 12 months

A Product Gallery featuring 173 of the most popular export models, with detailed specifications and full-color pictures

This report covers: gas-powered scooters, electric scooters, powerboards and all-terrain vehicles

How you'll benefit

Get to better understand the changing production processes followed by different China manufacturers

Find out which producers are using components and have QC procedures that meet your standards

Be the first to know upcoming design, price, and other manufacturing trends for the next 12 months

Discover which production centers in China most closely fit your scooter sourcing needs

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

Executive summary

The scooter manufacturing industry in China is undergoing a major shift in its production strategies as it tries to combat recent changes in regulations from its major export market, the United States.

Mainland China supplies approximately 60 percent of the world's lightweight scooters, and exports, as expected, have been expanding since Global Sources published its first report on Scooters in December 2003.

Exports in the first seven months of 2004 amounted to US$231 million, which is almost 90 percent of the US$261.50 million export sales registered for the entire calendar year 2003. The growth trend is expected to continue in the second half of 2004.

However, new environmental and safety standards have tipped the industry on its heels. The major findings in this report are:

1) Small companies with limited capital and insufficient R&D capabilities will be the most affected.

2) Unable to develop scooters based on new regulations, these small suppliers might switch to related products or eventually stop manufacturing scooters — resulting in a shrinkage of the supplier base.

3) Midsize and large suppliers will have to improve product quality and enhance QC procedures.

4) Many suppliers will seek alternative markets such as Africa and Asia.

5) Despite decreasing demand from the United States, most suppliers plan to expand their production capacities in 2005. This is mainly because of an anticipated increase in demand from the EU market.

6) In an effort to differentiate their products, suppliers will increase output of value-added scooters such as pocket bikes, electric scooters with pedals and three-wheeled stand-up scooters known as e-chariots.

Pocket bikes, mini choppers abound
Manufacturers in mainland China specialize in lightweight scooters, including gas-powered models, electric scooters, all-terrain vehicles (ATVs), kick scooters and powerboards. Among the 80 suppliers in this report, electric scooters are the largest category in terms of volume, comprising 40 percent of exports. Gas-powered scooters represent 38 percent, and kick scooters account for 14 percent. ATVs, which are a relatively new product line for many suppliers, make up 7 percent.

Production of hybrid scooter models, which are characterized as having physical features of motorcycles or bicycles, is also increasing. Among these hybrid models are mini-choppers, pocket bikes and motorized kick scooters that can also be used as powerboards.

The majority of scooter production in China comprises low-end and midrange models, ranging from US$20 to US$50 for electric scooters and below US$100 to US$200 for gas-powered models.

Industry overview

China produces 60 percent of the global supply of lightweight motorized scooters. For the first seven months of 2004, the total value of exports amounted to US$231 million, an increase of 84 percent over the same period in 2003.

Output and exports have been on the rise since production began in mainland China less than a decade ago. However, production strategies are currently undergoing a major shift as suppliers battle with stricter standards in their main export market, the United States. The standards in question include gas-emission checks, safety tests, and speed-limit controls.

Many China suppliers are unable to meet these safety and environment standards due to the high investments required. Small suppliers with limited capital and insufficient R&D capabilities are, therefore, likely to drop the line or switch to other products.

Midsized and large companies with some capital are looking to markets such as Africa and Asia to dispose of their existing inventory, while at the same time developing new designs that meet the stricter standards of the United States. These companies are also shifting focus to ATVs and recreational vehicles, or increasing the output of pocket bikes, electric scooters with pedals, and three-wheeled stand-up scooters known as e-chariots.

A positive outcome of these developments will be that China suppliers will have to improve their product quality and enhance QC procedures. In the Global Sources Supplier Survey (see page 17), most makers plan to purchase equipment to upgrade QC and testing standards, in 2005. The quality of motors and engines made locally is also expected to improve.

Of greater concern to makers exporting to the United States is the ban on scooters that some local U.S. governments are contemplating. This is translating into lost orders. It is unsurprising, therefore, that the majority (81 percent) of suppliers surveyed in this report have selected the EU as the market with the best growth potential in 2005, while only 63 percent have selected the United States. This is despite the fact that the EU currently accounts for only 17 percent of exports, whereas the United States absorbs almost 30 percent of exports.

This anticipated increase in sales to the EU explains why most suppliers in China plan to expand their production capacities in the next 12 months. Ninety-three percent of respondents to the Global Sources Supplier Survey will expand their production capacities in 2005, and 97 percent expect export sales to increase.

Industry composition
The scooter industry comprises an estimated 500 suppliers, only 300 of which are capable of export. The rest are small assembly workshops that either sell in to the local market or subcontract for exporters.

Privately owned companies — mostly owned by Chinese entrepreneurs and some foreign-invested — dominate the industry. A fraction of makers are joint ventures with companies in Taiwan, Japan and Hong Kong. There are very few trading, publicly listed or state-owned companies.

Samples of supplier profile

China Buyang Group Co. Ltd
Founded in 1992, China Buyang has become one of mainland China's largest scooter suppliers, with export sales having increased from US$32 million in 2003 to US$130 million in 2004 — an unprecedented increase of more than 300 percent.

The privately owned company produces at capacity with 3.6 million units annually. All of its products, which include electric and gas-powered scooters, ATVs, motorcycles, skates, and powerboards are for export.

In 1999, the Buyang brand, which accounts for 10 percent of all direct exports, earned the distinction of being a China High Quality Brand. Products under another in-house brand, Feishen, have been sold to Wal-Mart and AutoZone in the United States.

The company offers a complete lineup of export and after-sales services. It also keeps track of orders and collects feedback from buyers to help its R&D team become more focused in design projects.

Products
All products comply with GE and CE standards, and a few are patented. In the next 12 months, however, the maker is planning to focus on applying for patents rather than acquiring certifications to prevent design copying.

The company invested US$10 million in R&D in 2003 and plans to increase this figure by more than 50 percent in the next 12 months to allow its 100-worker design team to base its designs on EU environmental safety standards. Some of the planned upgrades will include improving the safety features, frame design, and battery and motor efficiency of its range.

Prices of China Buyang's latest gaspowered series start at US$200 and can go as high as US$1,000 for EPN-certified models with aluminum alloy housings, and which have maximum speeds and loading capacities of 120kph and 200kg, respectively.

Gas-powered scooters from the company are available with 33cc to 49cc and two- or four-stroke engines, and which cover speeds of 18kph to 20kph. Electric scooters, on the other hand, feature 120W to 500W motors with input voltage of 110-240VAC and output voltage of 24-36VDC. These units use sealed lead-acid batteries that charge in four to six hours and feature aluminum alloy or wooden decks. Belt-, chain- and axis-driven transmissions are available.

Manufacturing
China Buyang first began producing electric scooters in 2001 and followed these with gas-powered units in 2002. Today, it posts monthly output of 300,000 scooters, using 15 production lines, and has six lines for paint-baking.

Sample of product gallery

Gas-powered scooters China Buyang Model: FS517A Minimum order: 50 units Packaging type: Carton Delivery time: 7 days Indicated price: US$280.00 Description: Max speed 48kph; 49cc, single-cylinder, air-cooled, 4-stroke engine with 1.5L tank capacity; 12V/7Ah battery; packed in 158x41x66cm carton

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