Rigorous preparations have been undertaken by Taiwan motorcycle manufacturers to produce 250cc motorcycles and those with bigger displacements to pave way for Taiwan's entry into the World Trade Organization (WTO).

Following its entry, Taiwan will allow the import of heavier-class motorcycles and significantly lower import duties on all types of motorcycles and scooters. In a bid to catch up with the trend and meet business opportunities, some Taiwan motorcycle makers have already rolled off heavy-class motorcycles and are simply waiting for the right time to deliver them both nationally and internationally.

The leading motorcycle makers have reported better export performances for 2000, saying that a contributing factor was the introduction of new models to the world market. These new models, together with prototypes, were exhibited at the two global motorcycle shows held in Italy and Germany in September.

Due to the limitations in the domestic market, some Taiwan manufacturers have established offshore production bases in mainland China, Indonesia and Vietnam. Operations are quite satisfactory and production from those bases are mainly for local consumption, at least for the time being. One company, which had a strong desire to open a plant in Brazil in 1999 to produce scooters and motorcycles, has since canceled the plan due to the sharp currency devaluation and the domination of Honda motorcycles in that Latin American market.

Her Chee Industrial Co., Ltd.

Her Chee Industrial Co., Ltd., a manufacturer specializing in scooter and motorcycle production, has added ATVs to its lineup of goods. The company, based in southern Taiwan, acquired EEC9261 accreditation in June of 2000.

"As far as I know, we are the first Taiwan motorcycle company to be given EEC9261 approval for all terrain vehicles," said Anita Chen, sales manager of Her Chee Ind. "With the approval of our safety standards, our products will be more easily accessible to the European market."

European orders for ATVs made by Her Chee have increased significantly following the acquisition of EEC9261 certification, said Chen. "Our ATVs now can be used on public roads in European countries," noted the sales manager.

Europe still remains the biggest export destination for Her Chee's products, which includes scooters, motorcycles and the latest ATVs. The European market accounts for 45 percent of the company's total exports. The remaining 55 percent is shipped to North America and Latin America.

Despite the economic slowdown worldwide, Her Chee registered a five percent increase in the export of scooters, motorcycles and ATVs. In the first half of 2000, the company's production value rose by 35 percent.

Affected by the limited domestic market, Her Chee had planned to invest in Brazil by setting up manufacturing facilities there. After careful evaluation, however, the company decided not to build the factory due to the economic conditions in that country. "We gave up our intention to invest there partly because the tax system in Brazil is too complicated and partly because its currency devaluation is tremendous," commented Chen.

As a matter of fact, she added, the company had remitted NT$200 million (US$6 million) to Brazil in 1999 to prepare for the construction of a plant there. "The sharp devaluation of Brazil's currency forced us to abandon our investment intention," noted the sales manager. "Moreover, over 90 percent of the Brazilian market is dominated by Honda motorcycles."

Instead of building a factory in Brazil, Her Chee expanded its existing factory in Chiayi, southern Taiwan. All necessary equipment has been installed at the extended factory and production will begin soon, said Chen. "We want to keep our roots in Taiwan. We are not thinking of any overseas investment in the near future," revealed the sales manager.

Like many other motorcycle manufacturers in Taiwan, Her Chee participates in the Intermot Show in Munich, Germany. Two new models of each of its scooters, mini bikes and ATVs were displayed at the international motorcycle show. Most of these new models will be mass-produced early this year. An exception is the mini bikes with 50 and 90cc displacements, for which mass production was scheduled for October of 2000.

Kwang Yang Motor Co.

The Indonesian factory set up by Kwang Yang Motor Co. to produce 125cc scooters finally began operation several months ago, after a two-year delay. The stall was due to political instability in the country.

Construction of the factory began before the eruption of the Asian financial crisis. The financial woes, coupled with social instability, forced the firm to refrain from commencing operations. Kwang Yang decided to begin production a short time ago, when the Indonesian political situation stabilized.

The company produces 125cc Jetmatic scooters. All of its scooters are sold to the Indonesian market, which consumes 500,000 to 600,000 motorcycles a year, explained Su Kuo-chang, vice president of Kwang Yang. The company is headquartered in Kaohsiung, southern Taiwan. More than 120 local workers are employed at the Indonesian factory outside of Jakarta.

Su quoted a newspaper report as saying that motorcycles made in mainland China were being dumped on the Indonesian market. Action is being taken by the local motorcycle manufacturers association to prevent motorcycle imports from China. The vice president acknowledged that motorcycles produced by mainland China are threatening its counterparts in Indonesia and other countries because they are more price competitive.

Su said 70 percent of Kwang Yang's scooters and motorcycles are exported to Europe, with the remaining 30 percent going to Latin America. "Brazil is the biggest market in that continent," said the vice president. The company saw a 30 percent growth in exports to Europe in the first six months of 2000.

In addition to its Taiwan operations, Kwang Yang has established manufacturing bases in mainland China for the production of scooters, motorcycles and engines. The bases are located in Shanghai, Changsha and Chengdu.

The R&D department of this major motorcycle company consists of more than 300 engineers, turning out a number of new scooters and motorcycles every year.

Sanyang Motor

One of Taiwan's top motorcycle manufacturers, Sanyang Motor has developed a new 250cc motorcycle aimed mainly at foreign markets and the local market after Taiwan's entry to the WTO. Though available now, the company is waiting for the right time to release the product.

Currently, the government prohibits heavy-class motorcycles to run on public roads in Taiwan. "Once Taiwan is admitted to the World Trade Organization, we will be allowed to sell our 250cc and higher motorcycles," commented Henry Tsai, assistant manager of the Overseas Business Department.

A new 50cc scooter named Mask was commercialized in April 2000, and will probably be displayed at the Taipei Automobile and Motorcycle Parts and Accessories Show 2001.

Sanyang's exports in the first half of 2000 grew between 20 and 30 percent, noted Tsai. "The increase was mainly due to the increased number of orders placed from the U.K., Austria and Italy," noted the assistant manager.

Sanyang Motor has been operating a factory in Vietnam for several years to produce CUBS. With a monthly production of 60,000 units, the CUBS are sold to local consumers. The company also operates two plants in mainland China. One is located in Fujian province where 200,000 scooters are produced a month, and the other is in Suzhou where motorcycle engines are made for the mainland market. Shark scooters, with displacements of 50, 125 and 150cc, were introduced in March of 2000.

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