Motorcycle global market analysis (Part 1): Overview of emerging nations

 This report contains an overview of the major motorcycle producing countries of the world. This Part 1 report contains information on developing countries including China, India, Indonesia, Thailand, Brazil, Taiwan, and Pakistan, while the Part 2 report contains information of the developed countries of Japan, Europe, and the U.S.

 According to Yamaha Motor Co., Ltd., the 2014 global demand for motorcycles was 55.67 million units, unchanged from the previous year. This was the result of a decline in demand across all major markets, excluding India. Yamaha estimates a 1.3% year-over-year (y/y) increase in the 2015 global demand, with demand reaching 56.4 million units. India, which overtook China as the world's number one purchaser of motorcycles in 2012, is forecast to see an increase of 6.3%, surpassing 17 million units. Thailand is seeing demand growth for the first time in three years, which will grow by 12% to reach 1.9 million units. On the other hand, reduction in demand continues in China, which will see an 8.4% decrease, putting demand at 9.76 million units, below 10 million for the first time.

 The 2014 motorcycle production in China fell by 7.6% y/y to18.91 million units. This is a result of regulations that controls purchasing in urban areas, as well as a decline in demand in rural areas, the increased popularity of electric bicycles, and a decrease in exports. On the other hand, India, the world's second largest producer of motorcycles, saw production volume surpass 18 million units for the first time in the fiscal year between April 2014 and March 2015 (FY 2014). If these trends continue, India is expected to surpass China and become the world's number one producer of motorcycles in 2015.

 In Indonesia, the 2014 unit sales (shipped volume) was in a position to surpass 8 million units for the first time. However a reduction in the gasoline subsidies following the presidential elections had a negative impact, resulting in an increase of only 1.6% y/y, to 7.87 million units. In Thailand, economic slowdown and a decrease in income for agricultural households negatively affected 2014 sales, recording a y/y decrease of 15.1%  at 1.7 million units, below 2 million units for the first time in four years.

Related Report:
Motorcycle global market analysis (Part 2): Overview of developed nations (Apr. 2015)

Source: Compiled from Yamaha Motor Company financial results

 China, the world's largest producer of motorcycles, saw a y/y decline in production for the third year running in 2014. The 7.6% drop, to 18.91 million units, saw production dip below 20 million mark for the first time in nine years.

 The 2014 automobile sales exceeded 25 million units in China, suggesting that demand in the country has shifted from motorcycles to automobiles. Other factors leading to the decrease include: 1) Purchase regulations in urban areas. Meanwhile, rural farm workers, traditionally the largest buyer, are increasingly working away from home, leading to a decrease in motorcycle sales. 2) The popularity of electric bicycles, which do not require licensing or registration. This is eroding the market for motorcycles. 3) In addition, there has been a decline in exports, which account for nearly half of production (9.28 million units, down 6.1% y/y).  All of these factors have led to a decrease in sales.

 In addition, the 2014 three-wheel vehicle production also decreased 2.6% y/y to 2.36 million units. The combined production of motorcycle and three-wheelers decreased 7.1%, y/y to 21.27 million units.

Source：Chinese Automotive Industry Yearbooks and China Association of Automobile Manufacturers' website

Source：Chinese Automotive Industry Yearbooks

Source：Chinese Automotive Industry Yearbooks (Note): Production data is from the top twelve companies with data available for 2013.

 India, which boasts the second highest motorcycle production in the world, saw a 10.5% y/y increase in production in the first 11 months of FY 2014 (From April 2014 to February 2015), to 17.04 million units. The FY 2014 full-year results are expected to surpass 18 million units, and come close to production volume in China. In Fy 2015, India is likely to beat China and become the top motorcycle manufacturer. As for the motorcycle sales, India kept the top position and saw growth of 9% y/y in the first 11 months of FY 2014, recording sales of 14.68 million units. The unit sales are projected to surpass 16 million mark for the full fiscal year.

 Hero MotoCorp, which was a joint venture with Honda until 2011, has the top position in terms of production in India. The company saw production increase by 6.7% to 6.11 million units. However, its share of the total production in India dropped 1.1percentage points to 35.9%. Meanwhile, Honda's local subsidiary, Honda Motorcycle & Scooter India, saw production increase by 21.5% over the same period, to 4.1 million units. This is almost double the company's 2010 manufacturing results and represents a 24.1% share of motorcycle production in India, making Honda Motorcycle & Scooter India the second largest producer of motorcycles in India.

 The third largest producer is Bajaj Auto, which is partnered with Kawasaki Heavy Industries. In the first 11 months of FY 2014, they saw a 2.7% y/y decrease to 3.07 million units, while the fourth place TVS Motors saw a 24.1% increase in production to 2.22 million units.

 Indonesia, the third largest motorcycle manufacturer in the world, saw an increase of 2.5% and production of 7.93 million units in 2014, with sales (shipments) increasing by 1.6% to 7.87 million units during the same period. Results up to June predicted a pace that would see sales surpass 8 million units. However, this pace slowed down in the second half of the year,  following the presidential election in July 2014, and policy announcment to reduce gasoline subsidies starting in November (fourth quarters sales dropped 7% from the same period in the previous year, to 1.81 million units).

 An executive of the Indonesian Motorcycle Industry Association predicted that 2015 motorcycle sales would  once again be projected to surpass 8 million units, on condition that the economy recovers steadily and policy interest rates are reduced (February 2015 announcement).

 In 2010, Honda and Yamaha's market share was both around 45%, almost splitting the market in half, however, from 2011 a gap began to form. In 2014, Honda's market share was 64.2%, while Yamaha's was 30.1%, less than half that of Honda. Honda has introduced a range of new motorcycles, and also increased local production. Honda's local production reached historic highs of 5.3 million units in May 2014, and is planned to reach 5.8 million units in 2015. On the other hand, in April 2015 Yamaha plans to open a local motorcycle development base in Jakarta with the aim of developing motorcycles specifically for the local market.

Source: Material: Indonesian Motorcycle Industry Association, etc.

Source: Company press releases, news reports, etc. (Some figures include MarkLines' estimates)

 Thailand is the 5th largest motorcycle producer in the world (Vietnam is the 4th), and saw a heavy drop in production in 2014 for the second year in a row, falling 16.9% y/y to 1.84 million units. Sales have also seen a sharp decrease, dropping 15.1% y/y to 1.7 million units, the first time the figures have been less than 2 million in four years. This has been the result of several factors: the economic slowdown and the revenue decrease in agricultural households which came as a result of the abolition of the government rice purchasing scheme. The Thai motorcycle market is expected to see the recovery in 2015, with Honda projecting sales of 1.75 million units and Yamaha projecting sales of 1.9 million units.

 By manufacturer, the largest company, Honda, saw registered sales decrease of 9.0% y/y to 1.35 million units. However, the second largest manufacturer Yamaha saw a drastic 40.7% drop y/y, while Suzuki and Kawasaki both dropped around 20% y/y. As a result, Honda's 2014 market share accounted for 79.7%, an increase of 5.2 percentage points. Meanwhile, Yamaha's market share dropped 5.6 percentage points to 13.0% in 2014.

Source: The Federation of Thai Industries

Source: The Federation of Thai Industries

Source: Thailand Automotive Institute

Brazil is the sixth largest motorcycle producer in the world, and produced 15.2 million units in 2014, recording a 9.3% y/y decrease. This is the result of the economic downturn and the fall in resource prices, along with a decrease in sales during the soccer World Cup and the presidential elections.

 The Brazilian Association of Motorcycle, Moped, and Bicycle Manufacturers (ABRACICLO) admits that while the economic situation has not improved in 2015, the events of 2014 that led to a drop in sales (The World Cup & the presidential election) will not be repeated this year, and in January 2015 production figures are predicted to remain stable and match the 2014 figure of 15.2 million units.

 Honda, the largest manufacturer, saw production volume drop of 9.9% y/y in 2014 to 12.4 million units. Honda's production accounted for 81.7% of Brazil's total production, representing a slight decrease in the share of overall production. While other companies saw a drop in manufacturing, Yamaha saw a 6.1% increase to 196,000 units.

 Domestic sales in Brazil fell to 1.43 million units in 2014, a drop of 10.2%. According to the ABRACICLO, the 2015 sales are predicted to increase slightly from 2014, projected at 1.46 million units (January 2015 announcement).

Source：ABRACICLO (Note) Suzuki has produced motorcycles in Brazil since 1995. Suzuki's data between 2009 and 2011 are estimated figures.

Source：ABRACICLO

 Taiwan is the 7th largest producer of motorcycles in the world, and in 2014 production reached 1.18 million units, 5.4% growth, an increase for the second year running. This is thanks to increased domestic sales and exports. Kwang Yang Motor Co, Ltd, the top manufacturer in 2014, saw a 14.6% increase in production to 512,000 units. At the same time, Yamaha Motor Taiwan Co., Ltd., which is the second largest manufacturer, saw a 5.9% decrease in production, manufacturing only 331,000 units.

 Taiwan exports about 40% of its production volume, and the 2014 exports increased for the first time in two years, by 18.3% to 499,000 units. Exports grew mainly due to sales to Europe. Taiwanese domestic sales in 2014 rose by 4.4% to 674,000 units.

Source：Taiwan Transportation Vehicle Manufacturers Association

Source：Taiwan Transportation Vehicle Manufacturers Association

 Pakistan's motorcycle production volume (including three-wheelers) was 771,000 units in FY 2013 (from July 2013 to June 2014), a decrease of 5.9% y/y when compared to past years, the third year in a row of decline. The highest production number was recorded in FY 2010, with a production value of 839,000 units.

 Sales also decreased during FY 2013 for the third year running, dropping 5.9% y/y to 772,000 units. The largest maker, Honda, saw a slight increase in sales, to 639,000 units, a 5.3 percentage point increase in market share, to 82.8%.

Source：Pakistan Automotive Manufacturers Association

Source：Pakistan Automotive Manufacturers Association

Source: Federation of Asian Motorcycle Industries、General Statistics Office of Vietnam (Note) Vietnamese production volume data for 2013 is provisional.

Source: Data in Vietnam and Myanmar-Federation of Asian Motorcycle Industries. The data in Vietnam is from Yamaha Motor's financial result reports.

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