Domestic battery cars are all over the streets, while Southeast Asia is still dominated by motorcycles. But among the many brands, the figure of Chinese motorcycles is almost absent in the whole of Southeast Asia.
More than 20 years ago, domestic motorcycles staged a "fast in and fast out" in the Southeast Asian market in a whirlwind posture.
At its peak, Chinese motorcycles occupied 80% of the market in Southeast Asia, but in less than 20 years, there was no foreign enemy to strike, and Chinese motorcycles lost their armor because of "infighting", and the entire market could not be lost by 5%.
More than 20 years later, when we look back on this experience, we understand what it means to truly wield a knife from the palace.
Why has it become a bad thing to lower prices and win the market? The inspiration from Southeast Asian motorcycles may be applicable to many fields of Chinese manufacturing.
How to enter the "Price Butcher".
On the streets of Southeast Asia, Japanese motorcycles used to dominate the streets, and the brand logo that came at a gallop in the roar appeared in front of the public on an almost 100% scale.
Like Vietnam at its peak, almost all motorcycles were Japanese brands - Vietnam would not make them themselves, Chinese products had not yet come, and Western brands were too expensive.
At that time, it was before 1997, not to mention that Chinese motorcycles went to the world, even the domestic market had not yet been fully rolled out. Fortunately, at that time, battery cars had not yet appeared, and the popularity of motorcycles in cities and villages was very fast.
With the increase of domestic market share, domestic motorcycles have finally begun to try to go abroad. Jialing motorcycles from the southwest drove into the Vietnamese market with a roar.
At first, everything went well, and the speed of Jialing's rollout in Vietnam was steady and fast, because in terms of the price of motorcycles, Jialing's entry broke the public's previous stereotype of motorcycles.
With a price of only about $800, I didn't expect motorcycles to be less than $1,500. In this way, new car buyers began to try motorcycles from China. With the same roar and the same speed, it doesn't seem to be any different from a Japanese motorcycle.
In this way, in the upcoming countdown year of the 21st century, domestic motorcycles have entered the markets of Vietnam and even other countries in Southeast Asia in an accelerated way.
Jialing is the first company to eat melons, seeing that he ate melons in one bite, other motorcycle companies are naturally not far behind, and have followed Jialing's footsteps to Vietnam.
And in addition to Vietnam, domestic motorcycles soon drove into its neighboring Cambodia. Like Lifan motorcycles, the police in Phnom Penh are also uniformly equipped to patrol the road.
From the entry of the first motorcycle to the market share to more than 80%, the expansion rate of domestic motorcycles is faster than that of the whirlwind. Japanese motorcycles are no longer popular, and it seems that domestic motorcycles unify the world in Southeast Asia.
However, after jointly dealing with the foreign enemy of the Japanese brand, the domestic motorcycle did not think about how to start the next stage of operation, but waved the knife inward and played the most common infighting game.
Wielding a knife from the palace and killing chickens to take eggs
I have heard this joke, saying that the Chinese made a fortune by opening a gas station on a street, and soon the street will become a gas station everywhere, and finally the gas station business has been dried up since then.
After domestic motorcycles seized the Southeast Asian market, it was also a typical way to play. In the face of external brands, price wars can force opponents away to a large extent.
But if after the market is integrated, the price war is still regarded as a magic weapon, then it is time to be eaten up a little bit.
It's a pity that domestic motorcycle companies didn't understand this truth at that time.
In 1997, motorcycles exported to Vietnam and other countries could still retail at a minimum of 600 US dollars. No matter which way you look at it, this is the lowest price, and if you fall below this price, it is impossible for the company to make money.
But just over 20 months later, the retail price of motorcycles fell from $800 to $600, and later even below $500.
The price war has just begun, motorcycle companies have naturally followed up, and consumers in Southeast Asia are naturally happy.
Sure enough, by around the year 2000, new car buyers found that the retail price of motorcycles had dropped to only about $300.
Things have developed to this bottom, and any company is actually holding on. Not to mention making profits, even motorcycle manufacturing is costly. Therefore, the enterprise at that stage is equivalent to "learning from Lei Feng".
Of course, how can the essence of the enterprise be so kind, their ideas are actually very vicious, they all hope that the opponent will not survive and die, and their own family will unify the market, so that they can make up for the gap in price with scale.
As a result, in order to squeeze the opponent as much as possible, the company began to cut the price again. By 2001, the Vietnamese suddenly discovered that the price of Chinese motorcycles sold in the store was only about 200 US dollars.
In the face of such a low price, consumers are estimated to wonder whether this is still a motorcycle? And the company itself gritted its teeth and said that the price of selling ribs by pound is higher than that of motorcycles by scrap iron!
At this point, the price should not be lower. It is said that according to the price of 200 US dollars for a motorcycle, the final net profit of the enterprise is only 20 or 30 yuan. With such a low profit margin, it is indeed not cost-effective to kill pigs and sell ribs.
The price has come down, and the sad companies suddenly found that none of them had consumed each other, and they were still struggling to hold on. As a result, new problems followed.
Due to the active compression of profit margins, not to mention how big the cost pressure is, that is, the new round of production of enterprises, funds are beginning to be stretched.
In the case of a funding gap, some companies have taken the lead in cutting the cost of motorcycle after-sales service. Seeing that the hole in the funds is still not filled, the last resort can only cut the manufacturing cost of the motorcycle.
The one who should cut corners and the one who should switch to cheap parts should be replaced by the cheaper ones. After such a cost-cutting transformation, the new motorcycle looks like a car on the surface, but there is no way to know what will happen to it.
Japanese brands regain the market
In a 2016 interview with reporters about a motorcycle shop in Hanoi, the owner of the shop said that he had not sold Chinese-made motorcycles for many years. The quality is not good, and it will break if you ride it for two years at most three years.
Not only Hanoi, but also other cities in Vietnam are not doing well enough. In Cambodia, motorcycles that were originally made in China were later replaced by Japanese brands. In Laos, another country, the motorcycles imported are all Japanese brands.
Pull the time back to 2002, which was a critical period when domestic motorcycles lost their reputation in Southeast Asia.
As the price war hurt profits and the quality of motorcycles, Japanese motorcycles, which had been withdrawn from the market, made a comeback.
In addition, Chinese companies have already lowered their prices, and Japanese cars will soon be favored by consumers as long as they set their prices at a slightly lower level while maintaining quality.
The development of the aftermath is also true, domestic motorcycles can not be sold, and the Japanese motorcycles after the price reduction not only ensure the quality, but also meet the expectations of many Southeast Asians in terms of price.
In this way, the Japanese brand killed another horse gun, and in just a few years, the originally lost market was recaptured by them.
Some people may think that domestic brands are also hurrying to repair the quality, so that they can grab the market back. In business, you are not afraid that the price of a certain product is too high, but you are afraid that it will lose its reputation.
The previous Japanese motorcycles were squeezed out in the price war, and they were not consumers' independent choices. As for domestic motorcycles, they took the initiative to give up their reputation and lose their quality, and consumers took the initiative to vote with their feet and drive them out.
Word of mouth has been actively ruined, and it is almost impossible to restore and make up for it. This can be seen from the feedback from the market later.
Many sellers in Hanoi said that Honda and Yamaha were the best sellers, and although the prices were a little more expensive, consumers were willing to buy them.
Compared with before, Vietnam's economy is now up, and many rich people are even willing to buy better motorcycles for the price of a car. In this case, domestic motorcycles that have had quality stains are naturally unpopular.
Some of the cheaper Honda motorcycles are assembled and produced in China, using Chinese-made engines, and consumers will not buy them when they know about it.
The same is true in Laos, where a large number of motorcycles in the country are either Honda or Yamaha. However, none of these cars were imported from Japan.
The Japanese brand has an assembly plant in Thailand, and a large number of motorcycles are assembled and produced in Thailand before being exported to Laos. In Cambodia, some people bluntly said that the quality of Chinese products is not as good as that of Japan.
Not only can domestic motorcycles not compete with Japanese brands, but even Korean-made motorcycles can't compete. On the streets of Hanoi, there are also many Korean-made Daelim motorcycles. However, domestic motorcycles have become synonymous with miscellaneous and unpopular brands in Southeast Asia.
As of 2016, the share of domestic motorcycles in the Vietnamese market has not even reached 5%. More than ninety percent of the market is still the world of Japanese brands.
The evil consequences of a momentary profit
Grabbing the market in the form of a price war is quite short-sighted and will reap the consequences. Behind the price reduction, it will not only compress profit margins, but also compress the space for cost and quality.
If a commodity loses its quality, it naturally loses its life. Today, Japanese brand motorcycles not only firmly occupy the Southeast Asian market, but also maintain a strong sales momentum in other places.
According to 2020 data, Honda's global market share reached 26.4%, and Yamaha's market share was 10.8%. In 2022, Honda sold 17.6 million motorcycles overseas.
In contrast, the export scale of motorcycles in mainland China that year was only 7,644,700 units, which was less than half of Honda's sales. In the eyes of industry insiders, in the competition in the international market, the presence of mainland motorcycle brands has not been strong.
In fact, more than 20 years ago, our motorcycle originally had a chance to qualify, but in the end, because of the knife from the palace, our export road was completely blocked.
Therefore, the overseas export of motorcycles for more than 20 years has also sounded the alarm for other domestic brands, and the quality of the product cannot be damaged because of the short term, and it must be sustainable rather than a temporary benefit.
epilogue
At present, in addition to continuing to struggle in the Southeast Asian market, domestic motorcycles have also tried to open up the American market in recent years.
But now is different from the past, in the past motorcycles were the mainstream means of transportation, and now under the double volley of cars and battery cars, motorcycles are just blindly struggling to support.
As for the future development of electric motorcycles and retreating to the niche hobby market, these cannot be said to be production strategies, but they are completely different from the original situation. Once defeated, completely defeated, this is the path you have chosen, and you can only go on like this.
Resources:
"Domestic Cars, There Is a Mirror Called 'Domestic Motorcycles'" Xinhua News Agency, June 15, 2023
"The Pain of China's Motorcycle "Defeat" Southeast Asia: Love and Kill Self-Destructing the Market, Global Times, September 27, 2016