China’s motorcycle industry transformation behind Zhang Xue’s winning the championship: evolving from scale-driven to value-driven, with overseas expansion benefits beginning to emerge

From early days when it was deeply trapped in overseas markets in low-price competition and its reputation was dented, to today as Chinese brands stand on the podium at the world’s top-tier races, the overseas expansion path of China’s motorcycle industry is undergoing a shift—from a scale-driven approach to a value-driven one.

Recently, Zhangxue Motorcycle won the championship at the World Superbike Championship (WSBK) Portuguese round, becoming the first Chinese motorcycle manufacturer to win in this international top-tier event. This landmark breakthrough also reflects the long-term transformation process the entire industry has been going through in overseas markets.

The Chinese motorcycle industry began shifting to overseas markets relatively early. In the late 1990s to early 2000s, the industry once expanded rapidly in certain overseas markets by leveraging low prices, but it later fell into a predicament characterized by price wars, declining quality, and a sharp contraction in market share.

In recent years, as industry companies have gradually adjusted their products, brands, and market layouts, China’s motorcycle exports have shown a trend of synchronized growth in both volume and price. According to customs data statistics and analysis, in January–December 2025, China’s exports of complete motorcycles totaled 18.2346 million units, up 25.77% year over year. Export value was $11.389 billion, up 30.67% year over year.

Of particular note, according to statistics from the China Motorcycle Association, the average export price of China’s motorcycles in 2025 has exceeded $660, which is more than ten times compared with a decade ago.

Industry analysts believe that the industry as a whole is gradually shedding its image as low-end and low-priced, entering a stage that places greater emphasis on product value and sustainable development. The industry’s self-deprecating line of “selling by the pound is better than rib-price” is being rewritten by reality: “high-end models sell well in Europe and the U.S., while Africa and Latin America have become a stable base.”

Early vicious low-price competition turned motorcycles into a negative case study for going overseas

This more-than-20-year saga of the motorcycle industry’s ups and downs in overseas expansion can also be seen as one of the snapshots of Chinese manufacturing moving toward “value-driven overseas expansion.”

In the late 1980s and 1990s, multiple cities in China successively implemented bans and restrictions on motorcycles. The domestic demand market, which had been growing quickly, continued to shrink, forcing large amounts of excess motorcycle production capacity to shift overseas in search of survival space. Against this backdrop, overseas expansion evolved from being companies’ strategic choice to becoming the industry’s survival necessity.

Around 1997, led by Jialing, Chinese motorcycle companies were among the first to enter the Vietnam market. With a pricing of about $700–800—roughly half the price advantage of similar Japanese models—they quickly gained traction. In just two or three years, dozens of companies such as Lifan, Loncin, and Zongshen followed in dense succession, flooding into Southeast Asian markets. Leveraging a low-price strategy, Chinese motorcycles once captured more than 80% of Vietnam’s market share, nearly pushing out traditional giants such as Honda and Yamaha from mainstream channels, staging an astonishing “low-price breakthrough” at scale.

But this seemingly prosperous expansion of market share planted the seeds of collapse from the very beginning. In the race to secure limited market share, companies quickly plunged into bottomless price slaughter. Export average prices dropped from about $800 in the early period all the way down; at their lowest, they were only $170–200. According to a report by Global Times (Huanqiu.com), around 2002, the per-unit profit from Chinese motorcycles exported to Vietnam was only 30 yuan RMB, far below a reasonable profit margin.

Meager profits directly squeezed the space for investment in quality and service. To protect earnings, some companies reduced specifications and lowered standards in areas such as frame thickness, key components, and braking systems. Combined with the widespread absence of after-sales repair service systems, negative word of mouth about “high failure rates and poor durability of Chinese motorcycles” spread rapidly. At the same time, countries such as Vietnam, to protect their domestic industries, raised import tariffs in succession, introduced requirements for localized production, and launched anti-dumping investigations. Under multiple pressures, the market quickly turned around.

After 2005, Japanese brands essentially “recovered lost ground” across the board. The market share that Chinese motorcycle brands had once piled up through low prices evaporated almost entirely within just a few years.

For a long time after that, Chinese motorcycles in the global market were firmly branded as “low-end, cheap, and unreliable.” Even in emerging markets such as Africa and Latin America, they still struggled to escape the cycle of low-price involution. As a result, the industry’s overseas expansion faced a deep development dilemma.

A sunset industry makes a comeback again: product and layout optimization drives improvements in export structure

After experiencing early market fluctuations, the industry gradually adjusted its development approach—moving from simply pursuing sales volume and low prices to improving product quality, optimizing market structure, and enhancing overseas services. Export conditions improved step by step.

On the product front, companies increased R&D investment. In the first 11 months of 2025, industry R&D spending reached RMB 4.342 billion. The share of large-displacement motorcycles, leisure and entertainment models, and electric motorcycles increased. Companies such as Fengsheng, Loncin, Qianjiang, and Zhangxue Motorcycle released mid-to-high-end models, gained some recognition in markets such as Europe, and helped lift the overall export average price.

In terms of market layout, the industry gradually reduced reliance on a single region and formed a pattern of coordinated development, with Latin America and Africa as the main markets, alongside Europe, Southeast Asia, the Middle East, and other regions. In 2025, Latin America and Africa ranked among the top two export destinations by volume. Among them, Africa’s export volume grew 59.09% year over year, becoming an important growth point. The European market has relatively higher export unit prices, which serves as an important support for value growth.

In operating models, some leading companies began setting up plants overseas or building localized after-sales networks, reducing trade risks caused by exporting alone. Industry concentration improved somewhat. In 2025, the top ten export companies accounted for 61.44% of total export volume, easing the disorderly competition situation.

At present, China’s motorcycle export volume has remained among the global top ranks for multiple consecutive years. The growth rate of export value continues to be higher than the growth rate of sales volume, indicating that the driving force for growth is gradually shifting from scale expansion to value improvement. In mature markets such as Europe, domestically produced mid-to-large displacement models are gradually taking part in mainstream competition. In markets such as Latin America and Africa, products are mainly practical, and market demand is relatively stable.

Latest data released by the China Motorcycle Association show that this year’s January–February period saw a strong pull from the export market to drive industry growth amid a backdrop of declining production and sales in the domestic market: total export value of products by motorcycle manufacturing enterprises reached $1.914 billion, up 30.15% year over year. Export volume of complete motorcycles was 2.2884 million units, up 25.07% year over year, and export amount was $1.532 billion, up 29.3% year over year.

In other words, from low-price collapse to a value-driven journey forward, China’s motorcycle industry has, over more than 20 years, completed a profound industrial rescue.

Company performance: driven by high gross margins, with racing adding momentum

When it comes to enterprise operations, the importance of going overseas is even more clearly reflected.

Financial reports show that in the first three quarters of 2025, Fengsheng Power (603129.SH), a leading company in the mid-to-large-displacement segment, achieved operating revenue of RMB 14.896 billion, up 30.1% year over year; it achieved attributable net profit to shareholders of RMB 1.415 billion, with a year-over-year increase as high as 30.89%; and gross margin for the first three quarters reached 27.62%.

In 2024, the company’s gross margins for North America and European products were 36.71% and 33.29% respectively, both significantly higher than the 21.28% achieved domestically.

Qianjiang Motorcycle (000913.SZ), a well-known motorcycle company in Zhejiang, disclosed in a recent investor relations activity that the company’s domestic sales performance in 2025 faced pressure, with sales of about 167,200 units, down 20.9% year over year. Sales of models with a displacement greater than 250cc were about 64,500 units, down 26% year over year. By contrast, its overseas sales showed growth, with sales of about 235,700 units, up 3.9% year over year; sales of models with a displacement greater than 250cc were about 51,000 units, up significantly by 28.9% year over year.

In addition, the company’s 2025 semi-annual report shows that Qianjiang Motorcycle’s gross margin overseas was 30.34%, far higher than 23.98% within China.

In China’s motorcycle industry, Huayang Racing (920058.BJ) is the one that established racing teams and participated in international events relatively early. Through the strategy of “product R&D + race operations + cultural cultivation,” the brand has deeply participated in professional races at home and abroad and has already accumulated some recognition and reputation overseas.

The boosting effect of racing culture is reflected in the company’s performance. In the first half of 2025, Huayang Racing achieved operating revenue of RMB 430 million, up 66.05% year over year. Net profit attributable to shareholders of listed companies was RMB 36.7331 million, up 15.79% year over year. Among this, overseas markets contributed as much as 94% of revenue.

Industry consensus is that Zhangxue Motorcycle winning a championship at a world-class event and quickly going viral will also form broad positive momentum for China’s motorcycle industry to go overseas, further opening a new window for the industry’s move toward high-end and global development.

On April 3, a reporter from The Paper contacted multiple listed motorcycle industry companies, including Fengsheng Power and Loncin General, as an investor. Relevant staff all stated that “the company’s recent production and operations are normal and have not been affected by external factors.”

（Source: The Paper）