Japan's Motorcycle Business May Be Losing Steam
Friday, December 28, 2007SUZANNE PRATT: Back in the 1960s, Japanese motorcycles began to roll into the U.S. market. Their reputation for value and reliability nearly put American motorcycle makers out of business. But as Lucy Craft reports, the Japanese machines are now getting a run for their money, on their own turf.
LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: When it comes to two-wheeled transportation, no country has ruled the road like Japan. From humble mopeds to luxury cruisers, the market has virtually belonged to just four Japanese brands: giants Honda and Yamaha and smaller players Suzuki and Kawasaki. As recently as 2005, more than one out of every two bikes sold around the world was Japanese. But last year, Japan's iron grip on the motorcycle trade started to slip and experts like Shinsei Securities' analyst Yasuhiro Matsumoto say the era of Japanese bike-making supremacy is waning.
YASUHIRO MATSUMOTO, SR. ANALYST, SHINSEI SECURITIES: High-end products, still dominated by Japanese manufacturer. But I just say that, low-end product models, Japanese makers will lose their shares for this segment.
CRAFT: Publicly, industry spokesmen like Yamaha Motor Company's Minoru Takihata remain sanguine.
TRANSLATION OF: MINORU TAKIHATA, SUPERVISOR, PR GROUP, YAMAHA MOTOR CO.: The recent low-end demand has expanded the entire market. The Japanese have always catered to every price range, but can no longer do so. Our share is declining only because the total pie is bigger. I don't see any reason for pessimism.
CRAFT: India and China are now the world's leading customers for motorcycles. Instead of the heavy displacement, speed and sleek styling of plush models sold in the U.S., Europe and Japan, most Indian and Chinese riders seek no-frills transport, says a sales rep for Suzuki.
TRANSLATION OF: SUZUKI REPRESENTATIVE: This is our Chinese export model, GSX-125. It's very cheap and it's good for carrying family members or cargo. It's not a hobby bike, but strictly for commuting to school or work.
CRAFT: Yet despite strenuous efforts to woo riders in developing countries, Japanese and other motorcycle exporters have stalled in China. Isao Katayama, spokesman for Taiwanese maker Kymco, says counterfeiting is rampant.
TRANSLATION OF: ISAO KATAYAMA, MANAGER OF SALES & PLANNING, KYMCO JAPAN: Our bike will probably be counterfeited, with parts that don't fit right and an engine that is poorly machined and breaks down a lot.
CRAFT: To the frustration of the Japanese, China is home for over 100 local bike-makers. They have flooded the market with knockoffs selling for a fraction of the cheapest Japanese sticker price. Local bike producers have emerged not just in China, but in India as well. Yamaha spokesman Takihata insists time is on their side.
TAKIHATA: People are likely to trade up as their income increases, which would favor us in the future.
CRAFT: When it comes to motorcycles, made in China still means cheap and shoddy. The real question for Japanese motorcycle manufacturers is, how fast the Chinese and Indians can boost quality and become a real competitive threat. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.
