Western Securities: The penetration rate of large-displacement motorcycles in China continues to rise, and Chinese motorcycle companies embark on the journey of globalization 2.0

According to the Zhitong Finance APP, Western Securities has released a research report stating that as domestic motorcycle companies continue to enhance their R&D capabilities and product quality control, the gap in products and technology between domestic motorcycle companies and global leading motorcycle companies has significantly narrowed. With the high cost-performance advantage of Chinese manufacturing and the continuous improvement of brand reputation, domestic motorcycles (especially large-displacement motorcycles) are expected to maintain a good momentum in overseas markets, and leading domestic motorcycle companies have considerable growth potential. Key focuses include: CFMOTO (603129.SH), LONCIN (603766.SH), QJMOTOR (000913.SZ). Suggested attention: Great Wall Motors (601633.SH, 02333) high-end brand - Soul Motorcycle. The main points of Western Securities are as follows: Global motorcycle sales are steadily increasing, expected to exceed 60 million in 2024. Europe (excluding Turkey) + the United States + Australia are the main markets for large-displacement motorcycles, with an average penetration rate of over 60% for large-displacement sales; Southeast Asia + India are the largest overseas motorcycle markets, with a combined market size exceeding 30 million, mainly consisting of low-end small-displacement motorcycles; Latin America + Mexico are the main export regions for Chinese motorcycle companies, primarily focusing on low-end motorcycles, with rapid growth in motorcycle sales in recent years and an increase in the penetration rate of large-displacement motorcycles; motorcycle sales in Africa are around 2 million, mainly concentrated in West Africa. Japanese + Indian + Chinese motorcycle companies dominate the global motorcycle market, while European and American brands focus on large-displacement. From the perspective of major global motorcycle players, 1) the four major Japanese companies have a long development history, rich technology and channel accumulation, and their products cover the entire range from low-end small-displacement to high-end sports motorcycles, occupying a leading position globally; 2) Indian manufacturers mainly focus on the low-end small-displacement market, holding a high market share in India and Africa; 3) Chinese manufacturers Haojue and LONCIN rank among the top 10 in global market share, but their current sales are mainly concentrated in low-end motorcycles, with domestic brands CR3 (CFMOTO, LONCIN, QJMOTOR) gradually breaking into the high-end large-displacement market; 4) European and American brands mainly focus on the high-end large-displacement market, with an overall low market share. Domestic motorcycle demand is declining, but there is significant growth potential for large-displacement motorcycle sales. Motorcycle domestic sales have been declining continuously from 2023 to 2024, with domestic sales expected to reach 8.91 million units in 2024, a year-on-year decline of 16.6%. However, the demand for large-displacement motorcycles is growing against the trend, with sales increasing from about 140,000 units in 2020 to 400,000 units in 2024, achieving a CAGR of 30%. Compared to Japan, which is also part of the East Asian cultural sphere, the current development stage of China's large-displacement motorcycle market is quite similar to Japan in the 1980s. From 1980 to 1985, Japan's large-displacement motorcycle sales penetration rate increased from 4.1% to 6.9%, with a peak sales volume of about 12.4 units per 10,000 people, compared to China's current 4X (approximately 2.8 units per 10,000 people in 2024). The peak ownership rate per 10,000 people was 64 units, also approximately 4X of China's current situation, indicating that China's large-displacement domestic market still has considerable growth potential. Exports contribute significantly to domestic motorcycle companies' sales, with vast potential for large-displacement motorcycles overseas. From 2020 to 2024, China's motorcycle complete vehicle export sales increased from 7.0906 million units to 11.0161 million units, with a compound annual growth rate of 11.64%; the proportion of exports in total sales rose from 41.5% to 55.3%, making exports an important growth engine for China's motorcycle sales. Currently, Chinese motorcycle manufacturers have less than 10% market share in the overseas large-displacement motorcycle market, and there is significant potential for large-displacement exports. According to the bank's estimates, the total sales of large-displacement motorcycles in major overseas regions will be approximately 4 million units in 2024. It is expected that by 2028, domestic (domestic sales, neutral scenario) and overseas large-displacement sales will reach 700,000 units and 4.46 million units, respectively. Under the neutral scenario, it is estimated that Chinese motorcycle manufacturers' large-displacement motorcycle exports will approach 900,000 units by 2028, with a CAGR of approximately 25.5% for large-displacement motorcycle export sales from 2024 to 2028. Risk Warning: Tariff policy risks, slower-than-expected penetration rate of large-displacement motorcycles, and slower-than-expected progress of motorcycle manufacturers going overseas