Jialing's Exports to Increase

China Jialing Group, one of the country's largest motorcycle makers, expects to turn more towards overseas markets to benefit from free trade.

Jialing's President He Shibin last week announced his firm will increase exports by 10 per cent on average during the next five years.

Jialing will invest in technical renovation by increasing investment in product development to 5 per cent of sales from 1 per cent, He said.

The Chongqing-based motorcycle giant exported 46,000 motorcycles last year, a 104 per cent rise over 1998.

China's entry into the World Trade Organization (WTO), believed possible this year, will help Jialing in the international market, He said.

China surpassed Japan to become the world's largest motorcycle manufacturer in 1993. It has kept the ranking since then. Last year, China assembled 11 million motorcycles.

However, He said, WTO entry and free trade, will test the company's ability to compete globally.

The group, probably China's biggest motorcycle exporter, capable of making 2 million products a year, plans to increase yearly sales to 2 million units by 2005 and 3 million by 2010.

About 910,000 units were sold last year, 45 per cent more than in 1998 despite sales limits on the home market. About 3.7 billion yuan (US$446 million) was earned, up 68 per cent.

The market for two-wheeled vehicles in China is becoming saturated. There are 50 million motorcycles on China's streets and byways, one-fifth provided by Jialing.

Motorcycle manufacturers, after 20 years of fast growth, are being squeezed by auto makers in markets.

With savings adding up, more Chinese are buying cars, and many of them are substitutes for motorcycles.

Major motorcycle manufacturers are turning to overseas markets accordingly, and Jialing is a case in point.

Jialing has a joint venture with Honda Motor Co. Corporate executives said co-operation will expand with the technically and financially strong Japanese motorcycle giant.

Jialing has 30 subsidiary companies and 3,000 outlets in 50 countries, which He described as the firm's advantage in exploring overseas market.

Corporate executives said room still exists for Jialing to grow. An accelerated development of the impoverished western area will create demand, He said.

Experts predict the country's market will not become saturated until 2015. Annual demand is expected to increase to 12 million vehicles by 2005 and 15 million by 2010.

(Source: CIEC)

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