An exclusive interview with Thomas Peng, Vice General Manager, Guangzhou Haojin Motorcycle Co. Ltd., China
Haojin Company is based in Guangzhou, China. This is working in collaboration with Honda, Japan. Thomas Peng, Vice General Manager of Guangzhou Haojin Motorcycle Co. Ltd., China during his visit of Pakistan held a special sitting with MOBILE WORLD and exchanged his views on certain vital issues.
In his exclusive interview Thomas Peng informed that: Our brand name is Haojin, we are hundred percent Chinese investments in private sector. We are an independent company. The present state of motorcycle industry in China is not very good. We are facing some problems for the motorcycle business; world declining economic situation has affected a lot especially because of the petrol prices. For Chinese motorcycles there are only two markets; one is domestic market and the other is overseas market.
Our company was established in 1993 in Guangzhou so we are 23 year old. Initially we were doing trading business by selling motorcycles, but motorcycle manufacturing was started in 2001. Since then we have introduced our own brand.
For domestic market the big cities like Beijing, Shanghai, Hangzhou and all other big cities are forbidden for motorcycles due to various restrictions. Now domestic market for motorcycle industry is limited to the country side, small cities and rural areas only. You can imagine the market size is shrunk. Therefore, we are facing a lot of problems in this business.
He further stated that overseas market contributes fifty percent of the Chinese motorcycle exports but it is also going downward. Our company Haojin was shocked in year 2008 when there was worldwide inflation. In 2011 we promoted our exports to Iran, Algeria, Ankara and other places and we were in top two export companies in China. We are always concentrating on quality control, new products and innovation etc. without this you cannot get the market share.
Replying to various questions Peng said; during my trip I have visited Turkey, Iran and Pakistan. In turkey we are doing business since 2012. We have partners there. In Iran we are doing business since last eleven years and we have 45 to 50 percent share in Iran market. We are exporting engines of the motorcycles various models including CG, CGO and Off-roaders.
We have not invested in any overseas market we are only exporter. In future we may be thinking for investment. I have also visited Bangladesh and Latin American countries. They complained that the cost of Chinese bikes is increasing. In such circumstances we may think to shift our manufacturing plants to some other countries. But the regulations, policies and other issues of those countries were creating hindrance. In China and India the buyer’s market is big while in other countries demand is in smaller number. Hence, few metal parts could be manufactured in other countries, but not everything could be localized due to small quantity.
To another question he said; Pakistan is totally new market for us we missed this opportunity in last ten years. We presumed that we had not right product for this market so we did not pay attention here. But during this visit I have studied and gained lot of information about Pakistan market. I think we can get the chance to enter this market. There are 200 million population in Pakistan. We are new comer and we see here the exporters too who are exporting motorcycles to Afghanistan and Sri Lanka.
Thomas Peng commenting on the local market said; I have seen a lot of motorcycle models in Pakistan market comprising mostly CG and 70cc. This was my three day visit to study Karachi and Lahore market of motorcycle I am surprised to know that 50cc and 70cc motorcycles which are already disappeared from all over the world but in Pakistan these two models are still very popular. When I inquired about this issue the people replied that Pakistanis are technically very advanced mechanics therefore, they could repair even the oldest models in this country and after renovation they run it for another five to seven years.
They can reproduce the parts which are not available in the market. The other aspect is the fuel consumption which is 70 km in one litre by 70cc whereas 125cc gives 40 km. so Pakistani consumer likes to prefer the economy, then the cost of maintenance. Spare parts of these models are easily available all over the country at the cheapest prices so why they should give up the use of such popular vehicles. Here roadside mechanics are expert in repairing of these bikes in rural and urban areas and small & big cities. Moreover, about 125 bike assemblers are working having a severe competition and the prices of these bikes are the cheapest compared to other models of higher capacity engines.
Peng said; our plan to enter this market depends upon the market report and the decision made by the company management. We hope our customers would like the Haojin brand products. Our 80 percent engine sales range is of 125cc and 150cc. Other products include 100cc, 110cc, 200cc and 250cc. This is my second visit of Pakistan, earlier I had come ten years ago. But for motorcycle business this is my first visit, Thomas Peng concluded.
-Published on pages#12-13 in September-2016 edition of MOBILE WORLD Magazine