China’s Zhejiang QJiang Motorcycle Co plans to establish a joint venture with a registered capital of USD2.5 million with Harley-Davidson Motor Co Group. Huamei Motorcycle will manufacture, assemble and sell internal combustion engines and motorcycles, as well as offer related services. It received an investment of USD2 million from QJiang Motorcycle and USD500,000 from Harley-Davidson. QJiang Motorcycle said the tie-up of the two motorcycle firms was for sales of two types of motorcycles with engine capacities of 338 and 500 cubic centimeters, and other products. Zhou Mi, Senior Researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said the establishment of the JV was aimed to better cope with restrictions on motorcycles by local governments, tap China’s huge motorcycle market and deal with the high cost of imports. Currently, a number of cities in China have restrictions or ban certain types of motorcycles.
“Despite restrictions on motorcycles from local governments, consumers still show increasing interest in the vehicle due to relatively lower prices compared to cars, and convenience especially during traffic congestion. In addition, many regions, especially counties and rural areas, still have less restrictive rules on motorcycles,” Zhou said.
China’s production and sale of motorcycles reached 13.37 million units and 13.33 units in the first eight months this year, a year-on-year increase of 22.65% and 21.42%, respectively, according to the China Chamber of Commerce for Motorcycles. A report by LeadLeo Research Institute, a market research provider, showed that the motorcycle market in China will continue to grow with an estimated annual production of 19.57 million units in 2024.
Last year, Li Shufu, Chairman of Geely Holding Group, which is a major shareholder in QJiang Motorcycle, called for an easing of motorcycle restrictions to promote upgrading the industry. Li suggested that the government should roll out transportation regulations specialized for motorcycles, resume licensing of motorcycles in pilot cities, and launch driving tests.
Founded in 1985, QJiang Motorcycle was the first motorcycle and parts manufacturer in China to conduct cross-border acquisitions. It bought Italian motorcycle company Benelli in 2005. To date, the company owns four brands – Qjmotor, Benelli, Keeway and KSR. It sells products in about 130 countries and regions. In 2016, Geely spent CNY1.1 billion to acquire 29.77% of QJiang Motorcycle’s shares and became the company’s largest stakeholder. Earlier in 2019, Harley-Davidson partnered with QJiang Motorcycle to build a new type of motorcycle with an engine capacity of 338 cu cm, and planned to sell the products through Harley-Davidson’s retail dealers in China. According to LeadLeo, demand for motorcycles in Asian countries amounts to 82% of the global total, the China Daily reports.
