Insight from the Asian motorcycle scene


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Consumption tax complications

posted Apr 29, 2014, 8:50 AM by Loose Tube   [ updated Apr 29, 2014, 8:50 AM ]

On the surface, 2014 would appear to be the beginning of a revival. 
With first quarter foreign big bike registrations up 35% despite a weakened Yen and domestic brands up 48% year on year, what could go wrong? 


The motorcycle market in Japan would appear to be reacting to the increase in Consumption Tax (Value Added Tax on the sale of goods) which took place on April 1st. The last increase in 1997 which saw a rise from 3% to 5% triggered a surge in purchases followed by a slump (and government collapse). The current increase from 5% to 8% may well be causing the 1Q bounce and this is supported by media reports of extensive spending in advance of the tax hike.

Meanwhile the Tankan short term indicator of economic confidence has been following a positive trend since the introduction of quantitative easing at the beginning of 2013. However, small, medium and large automotive enterprises are all forecasting a significant down turn in April.

At the same time the consumer confidence index of willingness to buy durable goods has almost dropped to the lowest point experienced during the 2008 economic crisis.

In the bigger economy, eyes will be on the impact of Abenomics and a recovery in sales in the 3Q. Let's see the consequences for motorcycle sales.

Big-bike market set to change gear in Thailand

posted May 15, 2013, 10:52 PM by Loose Tube


Thailand's premier English language newspaper, The Nation, reports on the changing nature of the big bike market in Thailand.

Ducati started assembling its Monster 795 in its plant in Amphur Plakdaeng, Rayong, in September 2011 and reached domestic sales of over 1,200 units in the first year. Overall production in 2012 reached 2,391 with the excess for export. The production range at the plant now includes the following models: Monster 795, Diavel, Diavel Cromo, Diavel Carbon, Multistrada 1200 (from March 2013), Multistrada 1200 S Touring (from March 2013), Multistrada 1200 S Pikes Peak (from March 2013).

Despite Triumph's many years head start in Thailand, it seems unable to take advantage of Thai Board of Investment (BOI) incentives and domestically made machines are considered as imports, thus driving up costs significantly. They also appear to be locked into a distribution agreement with Britbike, managed by Thai celebrity Dom Hetrakul. The outcome is a niche market product, when they had all the elements to develop brand and distribution across the region with a broader appeal. With sales of 400 units in the 6 years up to 2012, this can be considered a serious strategic error on Triumph's part. 

JAMA Motorcycle Market Trend Surveys Fiscal Year 2011 Survey Results

posted May 15, 2013, 10:29 AM by Loose Tube

JAMA - April, 2012                                                                                                                                                                                                            

The Japan Automobile Manufacturers Association is pleased to release the results of the survey it conducted in fiscal year 2011 (ending March 31, 2012) on motorcycle market trends in Japan. Primarily targeting new-model purchasers, JAMA conducts this survey in odd-numbered years in order to track changes in Japan’s continuously evolving motorcycle market.


The latest survey drew 5,150 responses, and adjunct surveys were carried out simultaneously to clarify the situation behind the prolonged decline in demand that has come to characterize Japan’s motorcycle market.

Trends in Motorcycle Demand in Japan, Fiscal 1991-2010




1. Main Survey (Purchasers of New-Model Motorcycles): Principal Findings
  • Ownership declined among users in their 30s or younger, but increased among users in their 50s or older, underscoring the continued rise in the average age of motorcycle users.
  • Replacement demand accounted for 59% of all new-model purchases, up from 57% in the 2009 survey. First-time purchases accounted for 15% of the total, not significantly different from the previous survey’s figure but underscoring a sustained decline in first-time motorcycle purchases.
  • Over 70% of owners in Tokyo (i.e., its main 23 wards) reported experiencing difficulties in finding parking space for their motorcycles.
  • Respondents expressing the desire to continue riding motorcycles in the future totalled 87%, down from the 92% recorded in 2009.

2. Adjunct “Special Topics” Surveys

1) On Reasons for the Decline in Motorcycle Demand: Principal Findings

Responses by engine capacity:
  • Class 1 motor-driven cycles (50cc & under): “No further need for use (commuting to work/school, etc.),” “Retired from work/Quit job,” “Started working/Changed jobs,” “Purchased power-assisted bicycle,” “More convenient to take train or bus.”
  • Class 2 motor-driven cycles (51-125cc): “Difficult to park at destinations,” “Difficult to park at home,” “Motorcycle was stolen,” “Cited for motorcycle parking violations,” “Retired from work/Quit job.”
  • Mini-sized motorcycles (126-250cc): “Difficult to park at home,” “Lost confidence in own strength and stamina,” “Fewer friends and acquaintances to ride with,” “Less time for motorcycling due to other interests,” “Difficult to park at destinations.”
  • Small-sized motorcycles (251-400cc): “Work schedule leaves no time for motorcycling,” “Daily activities leave no time for motorcycling,” “Less time for motorcycling due to other interests,” “Fewer friends and acquaintances to ride with,” “Difficult to park at destinations.”
  • Small-sized motorcycles (401cc-): “Had children,” “Motorcycle upkeep costs,” “Work schedule leaves no time for motorcycling,” “Daily activities leave no time for motorcycling,” “Family members/others increasingly opposed to my motorcycle use.”

Responses by age group:
  • Teens/20s: “Started working/Changed jobs,” “Purchased automobile,” “Purchased mini-vehicle,” “Spending on travel instead,” “Spending on audio-visual equipment instead.”
  • 30s: “Got married,” “Moved,” “Purchased real estate,” “Motorcycle upkeep costs,” “Rent payments on residence/land.”
  • 40s: “Work schedule leaves no time for motorcycling,” “Daily activities leave no time for motorcycling,” “Motorcycle upkeep costs,” “Education costs (rider/family members),” “Difficult to park at destinations.”
  • 50s: “Lost confidence in own strength and stamina,” “Purchased power-assisted bicycle,” “Retired from work/Quit job.”

2) On Secondhand-Motorcycle Purchasers: Principal Findings

Note: References to new-model purchasers are based on information obtained from the main survey.
  • In the Class 1 and Class 2 motor-driven cycle categories, the percentage of men purchasing secondhand models was higher than the percentage of men purchasing new models.
  • In all motorcycle categories, the percentage of persons in their 30s and 40s purchasing secondhand models was higher than the percentage in their 30s and 40s purchasing new models.
  • The percentage of secondhand-model repeat purchasers was higher than the percentage of new-model repeat purchasers.
  • Reasons for purchasing secondhand models: “The model and engine capacity I wanted had to be within budget,” “Don’t have the financial leeway to purchase a new model,” “Secondhand models can be handled with less concern [for damage, etc.] than new models.”

3) On New-Model Users’ Perceptions of Motorcycles: Principal Findings
  • A large percentage of women respondents viewed motorcycles as a “Means of transport” and “Lifestyle commodity,” while a significant percentage of male respondents considered them a “Hobby item.”
  • A high percentage of users in their teens viewed motorcycles as a “Means of transport,” while a high percentage of users in their 60s or older saw them as a “Lifestyle commodity.”

See the original article in full at http://www.jama-english.jp/release/release/2012/120404-4.html

China International Motorcycle Exhibition (CIMA) 2012

posted May 5, 2012, 7:04 AM by Loose Tube

Visit the China International Motorcycle Exhibition (CIMA) 

October 2012 

Very often trying to find a way in to the Chinese motorcycle industry can be difficult. Obscure websites written in poor English hinder communication as do poor phone connections. The answer to the problem is to visit the CIMAmotor expo the biggest commuter motorcycle trade exhibition in the world. Each year more than 103000 people (including 32000 trade visitors) view over 450 exhibition stands (90 motorcycle companies and 360 parts and accessory companies) displaying more than 1000 motorcycle models and too many spare parts and accessories to count. CIMA represents 90% of the Chinese motorcycle industry including all of the top 50 factories with many companies choosing CIMA to launch their new products (112 new models were displayed in 2011); the expo generates over 100 million RMB on site. 

2011 saw the launch of the bigger displacement motorcycles from China with Europe and North America primary market targets. With the Chinese domestic market greatly reduced due to Government policies banning the use of motorcycles in urban areas more and more motorcycle companies are looking to export and have the EURO and DOT certificates of conformity or are looking for cooperative partners. 

Making their debut at the CIMA 2011 were Yadea and Qianjiang two of the biggest electric scooter manufacturers in the world. This year will hopefully see many more EV companies contributing. 

CIMA not only attracts Chinese exhibitors, in 2011 36 foreign companies from UK, USA, Germany, Japan, Spain, France, Italy, Thailand, Korea and Taiwan chose CIMA to showcase their products to the Chinese audience. CIMA 2011 saw 41 motorcycle events held in conjunction with the expo including- stunt displays, product demonstrations, company news releases, beauty pageants and development forums 

2012 will see the introduction of a series of motocross races some of which will ask you the visitor to participate (don’t worry we’ll supply the bike and safety gear) and the launch of Australian Don Hampton as he attempts to ride 20000 kilometres around China on a motorcycle and sidecar. 

The exhibition centre is the 3rd largest in China and boasts restaurants, tea rooms and bars (with really cheap beer)! 

For the 2012 expo CIMA have introduced the VIP Service Pass which is available to overseas motorcycle/parts/accessory traders. The VIP pass includes free hotel accommodation, Personal Assistant (translators, tour guides) and much more. For more details see the VIP Service information. To apply for the VIP pass contact me at cima.vip.service@gmail.com 

I sincerely hope to see in Chongqing! David McMullan, the Englishman in China.

Taiwan motorcycle show

posted Apr 8, 2012, 6:27 AM by Loose Tube   [ updated Apr 9, 2012, 9:06 AM ]

Previous editions of the Taiwan motorcycle show have been hampered by a lack of participation by some of the big domestic vehicle manufacturers and this would appear to be the case this year. However, for industry professionals seeking low cost high technology, as well as a reliable bridge into mainland China, then Taiwan should not be ignored.  

News from China

posted Apr 8, 2012, 6:08 AM by Loose Tube   [ updated Apr 8, 2012, 6:28 AM ]

Although China is a frequent destination for Western manufacturers when implementing global sourcing initiatives, it is not a large market for their motorcycles and scooters and as such remains somewhat of a mystery.

Chinamotor provides detailed insight into what's happening in the motorcycle industry from China's perspective. 



Tokyo Motor Show 2011 highlights

posted Dec 20, 2011, 2:01 AM by Loose Tube   [ updated Jan 10, 2012, 6:52 AM ]

Traditionally the Tokyo Motor Show presents a snapshot of the future both for those involved in the automotive industry as well as the general public. Manufacturers put on show their vision of what the future holds. For the motorcycle industry this long-term perspective separates this show, held every two years, from the annual Tokyo Motorcycle show, which is held at the end of March and marks the beginning of Spring. The Tokyo Motorcycle show provides makers with a chance to display their new range to dealers and prospects alike. For many customers who having spent the winter months studying motorcycle magazines, take the opportunity to attend the show in order to view all the market has to offer in the flesh and to finally decide what this years bike will be.    


From a motorcycle perspective there were two vehicles that caught our attention in 2011 and best represented the philosophy of the Tokyo Motor Show. Not because they were necessarily better than the others, but rather they focus our attention on the possible shape of things to come.


Honda




The iconic status of Honda's RC multi-cylinder bikes which dominated motorcycle racing in the 60s is rarely leveraged in marketing activities. Perhaps Honda believes this image is irrelevant to the mass of today's motorcyclists or maybe they have not designed anything since then that could be compared. So it was a delight to see the RC-E battery-electric motorcycle in a 250cc sized machine.


The batteries are mounted under a false fuel tank and where the radiator would normally sit. The motor is centrally positioned in the frame on the same axis as the swinging arm pivot. With suspension by Ohlins and radial Brembo front calipers, the bike signals serious intentions in high performance motorcycles.



The original RC series marked a leap into the future and left the opposition battered and bruised. Drawing parallels with the original RC models, so central to Honda's philosophy and future success must have involved serious discussions. By putting the RC legend on the line by association, the new electric RC is throwing down the gauntlet to all comers. 


One thing is certain, the RC-E will never sound like the original RC 6-cylinder range.






Meanwhile, over at Yamaha the issue of the future of motorcycles included the beautiful single cylinder Y125 Moegi, but also the rugged XTW250 Ryoku. The concept of a "work horse" utility vehicle is not new. The 50 cc Honda Motra was sold in Japan in 1982-1983 as a heavy-duty recreation mini bike with a large load capacity. The rugged and utilitarian appearance coupled with a specific transmission for steep terrain signalled a departure from conventional bikes available at the time. Honda revisited the concept in 2004, incorporating similar stylistic traits in the PS250 scooter.

 

Honda Motra 
  Honda PS250 

As popular displacements in developing markets creep upwards, we ask ourselves what type of bike would offer an alternative to the ubiquitous Super Cub underbone bikes so common the world over. The Super Cub is a supreme generalist, so by segmenting its target audience, competitors are able to focus on specific functions and design bikes that perform them better. If these segments sustain new models, successive iterations will lead to various new models. So Yamaha's XTW250 Ryoku is an attempt along these lines.


Indeed the choice of a 250cc engine reveals global aspirations. The seat is low, accommodating a variety of physiques, but the engine is high, suggesting the bike is comfortable on rough terrain and at least 30 cm of water. The large rear tyre and carrying racks implies the bike can generate sufficient traction to carry a heavy cargo, both for recreation and work when on un-paved roads or off-road. The enlarged fuel tank reduces stops on long adventure trips but also provides important added range on journeys into remote areas where petrol stations are rare. 

Yamaha



The Super Cub will remain the vehicle of choice in most of South East Asia, but the XTW250 Ryoku demonstrates that a different bike could perform better in an environment that crosses over between urban and rural life.

Revised Forecast for Japan's Vehicle Demand in Calendar Year 2011

posted Oct 20, 2011, 10:48 PM by Loose Tube

JAMA - September 30, 2011

Released by the Japan Automobile Manufacturers Association (JAMA) in December 2010, the original forecast for vehicle demand in Japan in calendar 2011 became inapplicable as a consequence of the earthquake and tsunami that devastated northeastern Japan on March 11 this year and various resulting factors, including a shifting economic environment, changes in consumer confidence, and severe disruptions in automakers’ supply chains. 

With the domestic production operations of Japan’s vehicle manufacturers now well on the way to full recovery, present conditions have made it possible to formulate revised demand projections for the current calendar year.  The revised general demand forecast for 2011 is as follows:

Motorcycles

The motorcycle market in Japan has been locked in a prolonged slump, attributable to a number of factors including the shrinking youth population and shifts in market trends for consumer goods.  In 2011, however, the introduction of new models is expected to help boost overall motorcycle sales to a total of 435,000 units, up 2.7% from 2010.

1) Class-1 Motor-Driven Cycles (50cc & under)
Demand is forecast to surge in this category over the previous year, as a result, first, of a general focus on economy and energy conservation (driven by the impact of the recent recession and by the March 11 disaster) and, second, of the introduction of new models.

2) Class-2 Motor-Driven Cycles (51cc & over)
In 2011 sales of motorcycles with engine capacity of 51cc or greater—with the exception of motorcycles in the small-sized category (over 250cc), for which demand is projected to decline amid economic uncertainty—are expected to grow compared to 2010, owing partly to the introduction of new models in both the Class-2 (51cc-125cc) and mini-sized (126cc-250cc) categories.  

See the original article in full at http://www.jama-english.jp/statistics/forecast/2011/110930.html

The small displacement motorcycle market

posted Oct 18, 2011, 7:17 PM by Loose Tube   [ updated Jan 13, 2012, 8:53 PM ]

In 1994 Piaggio launched its first subsidiary in Vietnam to manage the importation of scooters, particularly the Vespa brand which enjoyed a favorable image in the mind of the Vietnamese. In order to stimulate domestic manufacturing, the government followed the example of other South East Asian countries and applied import tariffs on completely assembled units lacking in local content. In view of the market's potential, Japanese makers set-up manufacturing operations soon after (Suzuki in 1996, Honda in 1997 and Yamaha in 1998). Following a price and quality war with Chinese assemblers, by 2005 the Japanese makers had begun to dominate, with top products selling for under $2,000.



In the meantime Piaggio incorporated the sizable import tax into its prices and continued selling its 125cc scooters at a premium of over $5,000, focusing on branding activities as a differentiation path to success. Annual volumes of unmodified European spec vehicles were sufficient to convince management to open a manufacturing plant in Vietnam in 2009. However, the key point is the significant number of customers willing to pay a premium for a scooter in a country whose GDP per capita is $3,100, much lower than other developing markets in the region, implying the existence of untapped sales potential across the region.

This level of segmentation and sophistication was not reflected in the low cost small displacement under-bone cub-derivatives, basic backbone motorcycles and plain scooters available across Asia until the Kawasaki Ninja 250R appeared at the Tokyo Motor Show in the winter of 2007. Since then there has been an increase in model types and Honda have addressed this by rolling out a comprehensive plan that brings together, advanced technology products (CBR250R), low cost production and a revolution in motorcycle racing regulations. The choice of Thailand as a manufacturing base reflects a confidence in its supplier base and intellectual property rights protection in Thailand. In October 2011 Suzuki in conjunction with Haojue announced the launch of the Suzuki GW250 "Baby B-King" targeting the Chinese market, further exemplifying the increased competition among small displacement vehicles and a different approach to the intellectual property rights issue in China.

As society and infra-structure changes across Asia, more opportunities for new products will appear, albeit highly nuanced and specific in nature, as the industry in the region switches from a production to a customer focus. With big bike sales slumping globally, this will be the main area of growth in the industry. For example, a combination of paved and unpaved roads would imply that products comfortable in both of these environments would thrive. Indeed America's Motorcycle Industry council sought to promote off-road products in China in 2010.

What of the non-Asian response? Established brands such as Triumph, Ducati, BMW, Moto Guzzi, MV Agusta and Harley Davidson all have models in their museums that could provide a historical reference for a new small cc product. So it came as no surprise when it was leaked that Triumph may be planning a 300cc street bike. Various versions of such a product manufactured in Thailand would permit the rapid expansion of Triumph's distribution network across Asia and Latin America, in advance of those markets transitioning to larger displacement products in the coming years.

Although WTO participation and other trade agreements bring a general reduction in trade tariffs, it still leaves European and American production costs higher than Asia. To be competitive, such manufacturers need Asian manufacturing bridgeheads. The launch of Triumph's factory in Thailand gives them more than 5 years head start in terms of sourcing suppliers and establishing relationships over the non-Asian competition. It's of strategic importance that Triumph moves forward with this small displacement bike project before their advantage is eroded.

However, there are other routes to success. The merger of KTM and Bajaj would appear to be a win-win situation for both parties, which leverages Bajaj's low cost production and existing distribution in low cost markets, with KTM's off-road fame, technical prowess and global distribution. The rapid conception, development and launch of the 125 Duke reflects well on this partnership and would appear to have already thrown down the gauntlet. In addition, Bajaj's alliance with Kawasaki which sees them assembling and distributing the Ninja 650R and distributing the Ninja 250R through their Probiking network in India is a further example of creativity in distribution.

Where will the next surprise come from? Perhaps Qianjiang's legendary Benelli brand will offer us a surprise. However, even if it were true, this is unlikely to make an impression due to weaknesses in distribution and technical concerns. It's more likely that Piaggio will use its base in Vietnam to develop new motorcycle products under the Aprilia brand and Ducati to answer from their new base in Thailand.

The discussion so far ignores the potential of such products to reinvigorate the industry in developed markets. The Ninja 250R, 125 Duke and CBR250R have all achieved excellent sales results in developed markets as fun entry level products. Is this the start of a truly global phenomenon?

Honda's strategy masterclass

posted Aug 12, 2011, 7:27 AM by Loose Tube   [ updated Jan 13, 2012, 8:47 PM ]

Introduction

Successful strategies often combine the tangible and the intangible with a smattering of complexity, but those that endure are difficult to copy. One of the techniques used by firms to delay pursuit by competitors is obviously secrecy, though sometimes it's impossible to keep all elements of a strategy secret if they fall into the public domain. What if hiding the final piece that completes the picture is enough to prevent the whole image coming into focus until it is virtually complete? When this occurs, it leaves the competition with what appears to be an insurmountable mountain to climb. Honda is credited with manufacturing about 20% of the world's motorcycles, but how can it position itself to maintain or even improve that? Here's an example of how.

Part 1 - Racing

It's 10 years since Honda and the other Japanese constructors phased out there last 2-cycle road bikes in developed markets. This simple fact was enough for them to cajole the FIM (the federation that governs motorcycle racing internationally) into ending the historic 500cc 2-cycle Grand Prix Championship and transitioning to the the 1000cc 4-cycle MotoGP Championship in 2002. As the premier class it garners most attention, but subsequent to that change the 125cc and 250cc classes continued as 2-cycle havens.

The disconnect between the 4-cycle products being manufactured and sold with the 2-cycles being raced became difficult to justify from a marketing point of view for Japanese constructors. Furthermore, in a world ever more conscious of pollution, the reputation of the 2-cycle engines being raced seemed inconsistent with a general drive for a reduction in gas emissions. So together with championship organizers, DORNA (a sports management company), who had their own concerns over the cost of participation and lack of competition, Honda managed to lobby for the end of the 250cc 2-cycle championship in 2009. It was replaced by a 600cc 4-cycle championship called Moto 2 with each entrant using a standard engine provided by Honda, prepared and maintained by a neutral company. No major production motorcycle manufacturers entered the championship as racing with a Honda engine represented a significant marketing obstacle. It was of utmost importance that this was a success for Honda and indeed it was. The racing was close and entrants were many.

2011 will now be the last year of the 125cc 2-cycle championship. In 2012 it will be replaced by a 250cc 4-cycle championship, but with engine supply open to all comers. In advance of this, Honda developed and launched the NSF250R. A version of this bike will be campaigned in the 2012 world championship and at the same time a version will be made available world wide for amateur racers.  

The NSF250R is powered by an all-new liquid-cooled single-cylinder 249cc four-stroke engine specifically designed for racing. Technical highlights include an engine layout with the cylinder tilted back 15 degrees to concentrate mass. To generate strong power throughout the high-rpm range, the NSF250R incorporates titanium valves for both intake and exhaust to reduce friction and lighten the valve train. Furthermore, the design reduces friction between piston and cylinder and improves durability by offsetting the cylinder center line and applying nickel silicon carbide (Ni-SiC) for the cylinder surface treatment. The cassette gearbox design was selected for quick and easy gear set changes for the close-ratio, six-speed transmission, thereby allowing gear selection to be optimized over a large variety of racing circuits. This lightweight, well-balanced machine offers impressive power output and superb handling to achieve a great blend of high performance plus rider-friendly traits well suited to up-and-coming racers. The suggested retail price in the USA is $28,599.

To summarize, the change to Moto GP from 500cc, to Moto 2 from 250 2-cycle and Moto 3 from 125 2-cycle all seem to be compatible with Honda's outlook. After winning the 2011 Moto GP world championship, the next goal will be to popularize 250 4-cycle racing globally and win the Moto 3 championship in 2012 for which they are earnestly prepared.

Part 2 - Market

In 2008 global production of vehicles under 250cc was a least 40 million or 80% of the total. Although many markets have regulations and legislation that favor displacements under 200cc, the 250cc displacement physically resembles smaller vehicles and the segment is destined to grow as regulations change.

Customers in developing markets are now expecting more advanced products that provide an improved riding experience and safety.

Many markets in the developing world enjoy a thriving low cost production based racing scene. Apart from a full event calendar in each of the main markets in Asia, the underbone class is also part of an Asia Road Racing Championship which is sanctioned by the FIM with rounds in Malasyia, Indonesia, India, Japan, China and Qatar.


Part 3 - Product

In November 2010 Honda announced that following the launch of the PCX 125cc scooter in March 2010, Thai Honda would start production of the new CBR250R road sports model. This CBR250R has the largest engine displacement of any vehicle produced by Thai Honda and was its first road sports model. The CBR250R ia a global model for export to a wide range of countries such as developing markets in ASEAN but also Japan, Europe, North America, and Australia from spring 2011. The bike was immediately visible at the winter's International Motorcycle Shows touring the USA.

Honda Motorcycle and Scooter India (Pvt.) Ltd. planned to start production of the CBR250R in spring 2011 and extend sales from India to South America.

The CBR250R is equipped with a newly-developed liquid-cooled 250cc 4-stroke 4-valve single-cylinder DOHC engine that is easy to handle. It uses an electronically controlled fuel injection system (PGM-FI) as well as an O2 sensor and exhaust catalyzer.

The CBR250R incorporates Combined ABS, a world first for a 250cc-class road sports model. In Japan the basic model retails for JPY 449,400 including tax, whereas the class leading Kawasaki Ninja 250R built by Kawasaki Thailand (launched October 27th 2007 at Tokyo Motor Show) retails for JPY 533,000 including tax. That's 15% cheaper.

The Ninja 250R already occasionally features in the Asia Road Racing Championship mentioned above. The Yamaha R15 (150cc) has a one make championship in India and there are many other examples of small displacement bikes being popularized on the track, and although Yamaha are preparing an entrant for the Moto 3 championship, they lack a low cost 250 sports bike. As yet Kawasaki has not announced an entrant into the Moto 3 championship and therefore find themselves unable to promote the Ninja 250R sufficiently. Although the CBR250R is different to the NSF250R, cosmetic changes to the road bike are inexpensive. There's an obvious marketing link to capitalize upon.

Part 4 - Market-in approach

By the the year 2000, Honda manufactured products in 33 countries as part of their self-termed "market-in" approach. The advantages of manufacturing near target markets may include lower labor costs or exchange rate risk mitigation but the primary advantages involve an increased awareness of customer needs and the circumvention of import tariffs, positioning Honda to win cost leadership battles. 

Honda started production in Thailand in 1964 enjoying 36 years of experience before starting the manufacture of the CBR250R. This provides important guarantees in terms of workforce know-how and systems as well as supplier coordination, know-how and reliability. Of course all of the 36 years are not needed to prepare for this step, but the complexity should not be underestimated and by incorporating the CBR250R into their globalization strategy they raise the stakes.

Conclusion

If we count back in time we can see how the pieces fit together. The idea of a Moto 3 championship occurred at least 2 years ago, and with it came the NSF250R. About the same time the CBR250R was conceived. The push for the Moto 2 championship seems like an intermediate step in order to establish Moto 3. Today Honda has the prospect of:

·          A 250cc prototype championship with a truly global appeal and they offer the first competitive entrant

·          A massive 250cc street bike global market

·          An inexpensive but fully featured 250cc road bike with a refined production and supplier platform

·          A 250cc product with global appeal that combines the low-end in developed markets with the high-end in developing markets

The obvious and foreseeable next step is the promotion of rounds in the Asia Road Racing Championship to host Moto 3 races in the World Championship. The targets are Indonesia and India, by which time Honda's virtuous circle is closed.

Those ready and able to compete, please step forward.

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