Western Securities: Domestic high-displacement motorcycle penetration rate continues to increase, Chinese motorcycle companies embark on a global 2.0 journey

The Zhitong Finance App learned that Western Securities released a research report saying that as domestic motorcycle companies' R&D capabilities and product quality control capabilities continue to increase, the product and technology gap between domestic motorcycle companies and the world's leading motorcycle companies narrows significantly. With the cost-effective advantages of Chinese manufacturing and continuous improvement in brand reputation, domestic motorcycles overseas (especially high-displacement motorcycles) are expected to continue to maintain a good momentum, and leading domestic motorcycle companies have a lot of room for growth. Focus on: Chunfeng Power (603129.SH), Longxin GM (603766.SH), Qianjiang Motor (000913.SZ). Recommended attention: Soul Motor, a high-end brand owned by Great Wall Motor (601633.SH,02333).

The main views of Western Securities are as follows:

Global motorcycle sales have been rising steadily, exceeding 60 million units in 2024.

Europe (excluding Turkey) +the United States+Australia is the world's main high-displacement motorcycle market, with an average penetration rate of over 60%; Southeast Asia+India is the largest overseas motorcycle market, with a total market size of over 30 million vehicles, mainly low-end small-displacement road motorcycles; Latin America+ Mexico is the main export region for Chinese motorcycle companies, mainly low-end road vehicles. Motorcycle sales in recent years have increased rapidly, and the penetration rate of high-displacement motorcycles has also increased; motorcycle sales in Africa are around 2 million units, mainly in West Africa.

Japanese, Indian and Chinese motorcycle companies dominate the global motorcycle market, and European and American brands focus on large emissions.

Looking at major motorcycle players in the world, 1) the four major Japanese models have a long history of development, and their products have basically achieved full coverage from low-end small-displacement to high-end sports cars, and occupy a leading position in the world; 2) Indian manufacturers mainly focus on the low-end small-displacement market and occupy a high market share in India and Africa; 3) Chinese manufacturers Haojue and Longxin rank in the top 10 in the global market share. However, the sales volume is mainly concentrated on low-end channel models, and the independent brand CR3 (Chunfeng, Longxin, Qianjiang) has large emissions of high-end vehicles. Models are gradually breaking through; 4) European and American brand products mainly focus on high-end high-displacement Market, the overall market share is low.

Total domestic demand for motorcycles has declined, and sales of high-displacement motorcycles have great potential to grow.

Domestic motorcycle sales declined continuously in 2023-2024. Domestic sales in 2024 were 8.91 million units, down 16.6% year on year, but demand for high-displacement motorcycles bucked the trend. Sales increased from about 140,000 units to 400,000 units in 2020-2024, and the CAGR reached 30%. Benchmarking Japan, which also belongs to the East Asian cultural circle, the current stage of development of China's high-displacement motorcycle market is quite similar to Japan in the 80s of the last century. From 1980 to 1985, Japan's high-displacement motorcycle sales penetration rate increased from 4.1% to 6.9%, with a peak sales volume of about 12.4 vehicles per 10,000 people. This is China's current 4X (about 2.8 vehicles in China in 2024). The peak number of vehicles owned per 10,000 people is 64 vehicles, which is also about 4X of China's current 4X. China's high-displacement domestic sales market still has great potential for growth.

Exports contributed to an important increase in sales for domestic motorcycle companies, and there is plenty of room to go overseas with large emissions.

From 2020 to 2024, China's motorcycle export sales increased from 7.0906 million units to 11.111,000 units, with a compound annual growth rate of 11.64%; exports increased from 41.5% to 55.3% of total sales, and exports have become an important growth engine for motorcycle sales in China. Currently, Chinese motorcycle companies have less than 10% of the overseas market share of high-displacement motorcycles, and there is plenty of room to go overseas. According to the bank's estimates, in 2024, the total sales volume of high-displacement motorcycles in major overseas regions is about 4 million units. Domestic (domestic sales, neutral conditions) and overseas high-displacement sales are expected to reach 700,000 units/4.46 million units respectively in 2028. Under neutral circumstances, the export sales of high-displacement motorcycles in 2028 is expected to be close to 900,000 units, and the export sales of high-displacement motorcycles in 2024 to 2028 is about 25.5%.

Risk warning: Tariff policy risks, the increase in the penetration rate of high-displacement motorcycles falls short of expectations, and the progress of motorcycle companies going overseas falls short of expectations.