Local assemblers unhappy about Chinese motorcycles<\/p>\n
By Tantri Yuliandini<\/p>\n
JAKARTA (JP): The influx of Chinese motorcycles has caused
\nwaves in the country's motorbike market, threatening the
\ndomination of Japanese brands, especially in the lower end of the
\nmarket.<\/p>\n
Since the government eased regulations on the importation of
\ncompletely built up motorcycles in late 1999, at least 57 brands
\nof Chinese motorcycles have entered the market, many of them
\ncoming in last year.<\/p>\n
Last year alone saw the importation of 173,834 motorcycles,
\naccording to data from the Ministry of Industry and Trade, a
\nmajor number of them from Chinese producers.<\/p>\n
Motorcycles with brand names such as Jialing, Jiincheng,
\nBeijing and Sanex have become commonplace on the streets of
\nJakarta, as well as other parts of the country. They also compete
\nwith Japanese brands in TV advertisements, recruiting well-known
\nfigures to endorse their products.<\/p>\n
Muliadi Harahap, branch manager of PT Indojaya Utama which
\ndistributes Beijing motorcycles, said that the main draw of
\nChinese motorcycles was the low price compared to locally
\nassembled Japanese brands.<\/p>\n
\"It's really back to the problem of economics. Honda
\nmotorcycles have become too high in price to afford,\" he told The
\nJakarta Post over the weekend, explaining that a Honda Supra
\ncosts about Rp 11.8 million (US$1,242) compared to the highest
\nprice for a Chinese version of a similar model of about Rp 8.5
\nmillion ($895).<\/p>\n
The lower prices are the main force behind the success of
\nChinese motorcycles acquiring more than 30 percent of the
\nmotorcycle market in Indonesia, Muliadi said.<\/p>\n
It has also triggered allegations of dumping practices from
\nlocal assemblers of Japanese motorcycles.<\/p>\n
Indonesian Motorcycle Industry Association (AISI) chairman
\nRidwan Gunawan said that the eagerness of Chinese producers to
\nexport their products had prompted them to sell at a lower price.<\/p>\n
He said that production capacity in China was more than 20
\nmillion units a year but its own market only reached about 11
\nmillion motorcycles, making Chinese producers pursue an
\naggressive export strategy to sell the excess capacity.<\/p>\n
AISI groups agents and assemblers of popular Japanese brands
\nsuch as Honda, Yamaha, Suzuki and Kawasaki as well as Italy's
\nPiaggio Vespa. The association recorded domestic sales of 858,190
\nmotorcycles and exports of 115,278 motorcycles.<\/p>\n
According to a survey conducted by AISI, Chinese-make four-
\nstroke cub motorcycles with 100 cc engine capacity should cost
\nabout US$520 to $560, which would become higher when factory
\nlocation and transportation costs were taken into account, Ridwan
\nsaid.<\/p>\n
\"However, it is a fact that some manufacturers have offered
\ncub models for as low as $450,\" he said, adding that since the
\nprice offered was lower than the domestic price in China, it
\ncould be considered as leaning toward dumping practices.<\/p>\n
The association filed a petition in August last year for the
\nIndonesian Anti-Dumping Committee (KADI) to further investigate
\nthe allegations. Investigations are still under way.<\/p>\n
Nevertheless, Ridwan said it was plausible for Chinese
\nmotorcycles to be marketed at a cheaper price.<\/p>\n
He said that Chinese motorcycles used local materials for the
\ncomponents, some of which were not up to international standards,
\nand that the quality of Chinese motorcycles was not as high as
\nJapanese counterparts.<\/p>\n
Low labor costs in China also played a part in keeping prices
\ndown, Ridwan said.<\/p>\n
Muliadi acknowledged that presently Chinese motorcycles were
\nof inferior quality to Japanese brands, adding that in quality
\nHonda was still ahead.<\/p>\n
Among the many grievances of Japanese motorcycle producers are
\nthe alleged infringements of their patents by Chinese producers.<\/p>\n
\"They could very well accuse (Chinese motorcycles of)
\ninfringements because of the fierce competition between (Japanese
\nand Chinese) brands,\" Muliadi said, citing allegations that
\nChinese motorcycles infringed a patent on a Japanese automatic
\nclutch system.<\/p>\n
But he denied that Beijing motorcycles infringed the clutch
\npatent, saying that the clutch system Beijing uses is similar but
\nlarger in size.<\/p>\n
\"If the system is the same and the size is the same, then they
\n(Japanese motorcycle producers) could have a case of
\ninfringement,\" Muliadi said.<\/p>\n
Recently, the producers of Honda motorcycle and distributor PT
\nAstra Honda Motor reportedly found seven patent infringement
\ncases on its decompression device, out of the nine Chinese
\nmotorcycles investigated in Indonesia.<\/p>\n
Honda has demanded that Chinese motorcycle importers stop
\nimports and dismantle the device from existing stock.<\/p>\n
Ridwan foresees that in the future only a few of the 57
\nChinese brands will survive, especially with the ASEAN Free Trade
\nArea (AFTA) being implemented in 2002.<\/p>\n
Muliadi agreed, saying that he expected only about 10 percent
\nof the current brands to survive AFTA.<\/p>\n
\"The ones who survive will be those that have far-reaching
\nvision and immediately invest in production facilities, such as
\nfactories and assembling plants in Indonesia,\" he said.<\/p>",
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