Taiwan’s Motorcycle Industry Cutting edge tech reaches out to the world market                                                      By Polly Yang  2007.06.12 Characteristics of the Industry Taiwan’s motorcycle makers have reached a self-manufacturing rate exceeding 98%. Meanwhile, with a consolidated supply chain linking everything from motorcycle parts to complete motorcycles, production volume of Taiwan’s motorcycle industry not only meets demand for domestic market but also plays a vital role in supplying the international market. Over the past three years, annual production value of Taiwan’s motorcycle industry has exceeded more than NT$40 billion, while production value of Taiwan’s motorcycle parts industry grew even more significantly, jumping from NT$28.6 billion in 2003 to NT$40.5 billion in 2004 with an increase of 42%. The total production value of motorcycles and parts in 2004 reached as high as NT$82.7 billion. Even though star Hi-tech industries have overshadowed the traditional industries in Taiwan, there are still industries striving to upgrade their production quality and marketing competitiveness.  Motorcycle industry is one of the best examples and it has become one of Taiwan’s most competitive industries. In 2006 production value of Taiwan’s motorcycle industry and parts industry came to NT$41.5 billion and NT$37.6 billion respectively, with a total production value of NT$79.1 billion.   Production Value of Taiwan’s Motorcycle Industry Unit: NT$100 million       year  industry 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 motorcycle 465 411 369 367 303 307 406 422 440 415 growth rate 0.87% -11.61% -10.22% -0.54% -17.44% 1.06% 32.25% 3.94% 4.27% -5.68% Motorcycle Parts 410 325 308 259 205 243 286 405 406 376 growth rate 12.64% -20.73% -5.23% -15.91% -20.85% 18.91% 17.70% 41.61% 0.25% -7.39% total 875 736 677 626 508 550 692 827 846 791 Growth rate 13.51% -15.89% -8.02% -7.53% -18.85% 8.27% 25.82% 19.51% 2.3% -6.50% Source: Taiwan Transportation Vehicle Manufacturers Association   Domestic and International Markets In 2006, the total sales volume of Taiwan’s complete motorcycle (CBU) was 1,235,210 of which 746,504 went to the domestic market and 488,706 went to the international market. The opening of more convenient public transportation system and changing consumer tastes had led to an oversupply on the domestic market with sales volume in Taiwan gradually declining from 1.19 million sets in 1994 to 746 thousand sets in 2006.   But this adversity has inspired manufacturers of motorcycles and parts to focus more upon developing new products and expanding the export market. Taiwan’s exports to Europe have become increasingly competitive with its status as a WTO members and the appreciation of Euro. This can be seen in 2004 when export value of complete motorcycles soared to record highs, with much growth attributed to the rebound of the global economy, booming international trade and the increasing demand for the ATV parts.   As we can see from the statistics over the past 3 years, in 2004, exports volume for motorcycles (CBU plus KD) was 840 thousand sets, accounting for 52.10% of total sales while in 2005, with export volume was 650 thousand sets, accounting for only 45.16% and in 2006, 680 thousand sets, accounting for 47.53%. Exports grew from a ratio of 34.12% in 1998 to 47.53% in 2006, as indicated in the chart below. As a result it can be said that Taiwan’s motorcycle industry has moved from its domestic-sales-oriented stage to largely become an export industry.   Production & Sales Volume of Taiwan’s Motorcycle Industry year 1998 1999 2000 2001 2002 2003 2004 2005 2006 domestic sales vehicle number 872,168 796,919 759,170 628,776 633,078 781,033 772, 814 793,918 746,504 market share（CBU） 65.88% 67.06% 67.49% 73.87% 72.19% 71.01% 60.92% 62.28% 60.44% market share（including KD） 65.88% 67.06% 67.49% 62.23% 56.49% 58.21% 47.90% 54.84% 52.47% growth rate -14.34% -8.63% -4.74% -17.18% 0.68% 23.37% -1.05% 2.73% -5.97% exports CBU 451,754 391,507 365,775 222,440 243,900 317,519 495,776 480,768 488,706 market share 34.12% 32.94% 32.51% 26.13% 27.81% 28.90% 39.08% 37.72% 39.56% growth rate -10.80% -13.34% -6.51% -39.19% 9.65% 30.18% 56.14% -3.22% 1.65% KD -- -- -- 159,217 243,619 243,192 344,633 173,024 187,581 Sub-total 451,754 391,507 365,775 381,657