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China market for cheap electric bicycles in danger!

2013 annual production of 82 million conventional bicycles and 37 million electric two wheelers commonly electric scooters legalized as bicycles.
 

 
Shanghai, The Chinese government has announced in April 2014 that they want to grow the export value of Pedelecs within the next 5 years to an average of 1000 USD and that they want to remove the PB Battery scooter style electric two wheelers from the Chinese roads and have them replaced by more bicycle like vehicles utilizing light weight lithium batteries.

The market share of lithium batteries should reach by 2019 at the latest one third of the sales. This would be equal to more than 10 Million annually sold units if the annual sales volume of vehicles would not change during that time.

Since today more than 3,000 companies offer in China lithium battery packs for electric two wheelers, quality and safety is often on a very low level. Only the price counts at the end. That is why the Chinese government announced within the 2014 5 year plan, that it wants to focus the market to 5 main players to bring the battery industry to a global competitive position not only in price but as well in reliability and safety. The CBA (China Bicycle Association, in China a very powerful organization which is on one hand representing the industry inte- rests and on the other hand is part of the government to control and direct the industry according to government policies) has joined in October 2014 the Battery Safety organization (www.BATSO.org) with the target to use the BATSO Test manual and certification process governed by TÜV Rheinland to clean up the Chinese domestic market from safety issues which have become a public issue in China already including features on TV about fires which even caused some death toll.

International Industry welcome to be part of the quality transformation in China
The International two wheeler Industry considers China commonly only as a sourcing country for inexpensive bicycle components but not yet as a export destination for high end products. But with the rising wages in China wealth is growing for wider parts of the society. China is a consume driven country which could be seen on the streets where car owner usually take the most prestigious car which they can afford, like it was common in Europe maybe until 2-3 decades ago. In the moment when the Image of the bicycle will be flipped from the vehicle for the poor which can not afford a car to the vehicle of the smart, sporty and healthy people. Under such conditions the Chinese domestic market will consume millions of expensive bicycles and pedelecs not only from local sources but as well from international brands if they deliver them a prestige benefit.

Image Transformation of the two wheeler has started in China already
For International two wheeler companies it is crucial to keep an eye on the image transformation since this will determine the domestic purchase power which will be available for purchase of two wheelers. That it is moving could be seen as well in the category of the powered two wheelers where in 2013 BMW Motorcycle established a first sales office in China due to the fact that grey imports did rise and signaled that the market is waking up. For the last decade the PTW which was commonly considered as something for people who could not afford a car. But now like known from the EU and US market people who own a car purchase a high end motorcycle for pleasure use only - and in this case it should be the best available on the market.

Similar mind changing of early adopter consumer groups can be seen as well in the bicycle and the pedelec area where bicycle clubs are founded and there members do tours together with their high end vehicles which are imported due to the lack of local sources of such products.

CBA study trip - join now!
CBA offers a study trip for members of the international bicycle industry March 22nd to 29th of March 2015. The study trip will be located conveniently between Taipei Cycle Show and China North show.

Read the agenda here:
>> CBA study trip 22 - 29 March 2015


Media response
>> www.bike-eu.com

Text: Hannes Neupert

Picture: BATSO.org

24 February 2015
 

 
 

Events:

8th - 22nd September 2017
ExtraEnergy Pedelec and E-Bike Riding Test

3rd - 4th October 2017
Wassenaar, Netherlands
ExtraEnergy Ergonomics Test

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