BYD Expands Business Scope into Motorcycles
Recent pictures of a motorcycle being tested by personnel working for BYD have been circulating around Chinese news outlets. The Economic Observer, a Chinese newspaper, reported that BYD has confirmed that it is developing motorcycles in partnership with another company.
Last year, news had already emerged that BYD planned to cooperate with Spanish motorcycle brand Nerva to build an electric motorcycle. The motorbike would use BYD’s iron phosphate battery to achieve a peak power of 12.1 kW and a maximum speed of 125km/h.
BYD is not the first automobile company to build motorcycles. In June, 2021, in the announcements of the Ministry of Industry and Information Technology in China, Guangxi Automobile Group’s newly-built motorcycle enterprise appeared. In August 2021, Great Wall Motor established a new company with a business scope that includes the R&D, manufacturing and sales of motorcycles, in addition to motorcycle parts and accessories.
Great Wall Motor plans to invest more than 556 million yuan ($79 million) in the motorcycle market, and it is estimated that the powertrain production line with an annual output of 10,000 motorcycles will be completed in December 2023. Liang Henian, former executive director and vice president of R&D of Great Wall Motor, has mentioned in his book that Wei Jianjun, the head of Great Wall Motor, was a motorcycle enthusiast in high school. During the Guangzhou Auto Show in 2019, Wei made sure to visit the K1600 Grand America at the BMW booth.
Over the past three decades, the Chinese motorcycle market has gone through a tumultuous journey.
In the 1990s, a large number of private enterprises entered the motorcycle industry. According to statistics collected by the China Association of Automobile Manufacturers, in 2007, the production and sales of domestic motorcycles both exceeded 25 million units.
However, around 2010, many cities successively issued the policy of banning motorcycles. As of 2011, 186 cities in China have joined in and, by 2013, motorcycle sales in China dropped to 23 million units.
Not until 2020 did some cities in China relax their ban on motorcycles. However, despite the relaxation, sales have been declining. According to data from the China Motorcycle Chamber of Commerce, in 2022, the sales of motorcycles totaled 21.42 million, a 15.55% decrease from the previous year. Interestingly, despite the overall decline, sales of motorcycles with large cylinder volumes actually increased by 44.68% year-on-year.
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The motorcycle industry, like the automotive industry, has been shifting towards electrification. However, unlike the electric vehicle market, the electric motorcycle market has been relatively slow to gain traction. In 2022, the sales volume of electric motorcycles in China amounted to 7,632,700 units, a 14.46% decline from the previous year. This drop was largely due to the high cost of batteries, which has made electric motorcycles less competitive in terms of price compared to their gasoline-powered counterparts.
In the medium to long term, electric motorcycles have great growth potential. Chinairn, a third-party research institute, predicts that by 2027, the compound annual growth rate of motorcycle production in China will be about 5%, and the proportion of electric motorcycles will increase from 20% to 30%.