India has had two wars with China.
On the ICE two-wheelers front, that is.
The First War
The first was an attempted invasion in the early 2000s, when a few Chinese manufacturers decided to enter India with 100cc-125cc scooters and motorcycles. These were imported by dubious fly-by-night Indian operators, most of whom made money through selling the dealership rights.
It was an epic disaster. The motorcycles/scooters never found any customers. The Indian customers had been spoiled for quality by the incumbents – Hero, Honda, Bajaj, TVS, and Yamaha. They didn’t even look at motorcycles with strange-sounding names and even stranger-sounding brands. Most of these ‘startups’ folded within months. The last nail was the ever-tightening Indian emission standards that the Chinese could not meet at that time.
The Second War
The second war started a few years back and is continuing, as arguably better Chinese brands like Benelli, Keeway, Zontes, Brixton, and CF Moto try to sell slightly more competent motorcycles to Indians. The vehicles of operation are local distributors, certainly of better quality than the last time. The effect is still the same – there are not many takers, and it may soon be curtains down time again.
But the Chinese are relentless. They never stop trying, and that’s an admirable quality. I am sure there would be a third ICE invasion as well from the likes of Dachangjiang and a renewed assault from CF Moto. The important thing here is the unbridled energy the Chinese have of keeping at it. Failure does not deter them. India is not a special market for them. It is just one of the 127 markets their brochure-wielding sales force would conquer one day.
In comparison, the Indians never tried. Hero may be the biggest in the world in unit volume, but crossing the Himalayas never entered the task list. Bajaj may have sold millions of motorcycles south of the Sahel, but never tried their hand at learning Mandarin. This, even though Bajaj’s Pulsar, like all good things in life, has been copied by the Chinese.
In short, the Indians won’t try, and the Chinese won’t stop trying. Guess who will win in the end?
India has been living under a Chinese Invasion
When it comes to electric mobility, India, much like the rest of the world, has always been under Chinese control. At the bottom of the pyramid, entire vehicles come from China. A layer above, the same vehicles arrive in a kit form. For mainstream brands designing and manufacturing their own vehicles, the cells come from China, not to forget all the rare earths’ contribution to the vehicle. For brands that claim that they have achieved a China-independent supply chain, the raw materials for the cells and the motors come from China.
The Chinese lead the world, not just India. At an estimated seven million units in 2024, Chinese E2W production is more than the rest of the world combined. Agreed that most of that scale is due to the Chinese domestic market, but we cannot ignore the fact that nearly eight out of ten electric two-wheelers sold outside China have their IP origin in the country.
What Made the Chinese Omnipresent?
What we see today is an evolved Chinese industry enjoying a massive scale. However, they were not born this way. They have taken steps to reach where they are:
Factory over Brand
Today, we know Yadea because Yadea wants us to know them. For years, Yadea and everyone in Wuxi (or Jiangmen, or Chongqing, or Zhejiang) wanted to be just the factory of the world. “We will produce, and you can put your sticker,” was the popular adage, much before the term white-labeling made its way to the business world.
Sure, there have always been companies like Niu and Vmoto that worked hard to create their brands, but they were born with the idea of the brand. Niu does not pursue white-labeling of its scooters and works hard to keep others from imitating its signature look. At best, you can co-brand a Niu. That too, if you are a ride-sharing company, not an automotive OEM. Vmoto is far more flexible, though they also work hard on creating recognizable products.
InsightEV – Global Electric Mobility
As a result of focusing on being factories to the world, the Chinese did not have to spend much on archaic concepts like marketing and brand building. Sales is what they focused on. Marketing was left to participating in trade shows, though the Chinese stalls always have the grace of a farmer’s market rather than the chutzpah of a fashion store.
No shame in throwing brochures at everybody
Some will stick. Over the years, if a new market has not approached them first, the Chinese have been the first ones to enter through the door. It seems like their sales planners have long-term economic forecasts using metrics like InsightEV’s FAR and TWAR ratios that tell them when a market is likely to turn favorable for electric two-wheelers. Then they walk in, brochures in hand, egos and IPs left at the door, and flood the market before anyone can respond.
InsightEV – Global Electric Mobility
Listening to the customer
When the Chinese started, they did so by copying the looks of the most popular ICE scooters around. The sales conversations often went like this:
You want something that looks like the Honda Dio? We have that.
Honda Scoopy? Yes, we have that too.
A Vespa Primavera? That’s our bestseller!
And so on!
The Chinese have been flexible with what they offer. You can buy similar scooters in different styles, of different quality grades, with different motor outputs, with varying battery pack sizes, different grades of plastics, minor styling changes, even different cell chemistries, types of battery packs, etc. There are no fixed specifications for a product. The customer, in this case, the distributor in any country, gets what they want.
Building scale at an industry level
What works for China is that the big five—Yadea, Luyuan, TailG, AIMA, and SUNRA—have built up massive scales for themselves. However, beyond that, a massive scale has been built at the industrial cluster level. Suppliers for plastics, metal parts, even motors and cells, are shared among everyone, giving the suppliers an even larger scale.
They move fast
The Chinese are the most agile in product development. They are not running after perfection, so their products are flawed. But they knock them out of the door fast. Every year at EICMA, there are new styling themes from Chinese factories, most likely what the Europeans and Japanese had been styling the previous year. It helps that every European turns to China to manufacture the scooter their designers lovingly designed.
There is a constant churn, a sense of dynamism, and eagerness that a typical Chinese setup exudes. That, in turn, is reassuring for the Mom-n-pop shop importer in Indonesia.
The Indian ICE two-wheeler industry has a large moat
Coming back to India, why the Chinese invasions of the Indian ICE 2W market have not worked to date is the high-quality standards that Indian manufacturers have set. Honda has always been good, and they taught Hero. TVS often exceeds Honda, and Bajaj is not a slouch either.
In delivering quality, the Indian manufacturers set the customer expectations high. Low-maintenance machines with 10-year lifespans are the norm, and anything that does not deliver that has little chance in the market. The expected quality standards and their successful delivery by the incumbents act as a large moat.
However, Wars are Global
Both India’s and China’s two-wheeler industries are blue water forces. They don’t have to attack each other’s home turf. The battles can be fought in a third geography. There was another war between India and China, and that happened in Africa. Most of that started and ended between 2005 and 2015 with the Indians routing the Chinese. In Africa, the Chinese came first, like they always do. They flooded markets like Kenya with cheap commuter motorcycles. However, these motorcycles were fragile and prone to breakdowns. Most of these motorcycles are used as motorcycle taxis (Boda Bodas or Okadas in local speak), with heavy use and abuse, at times running more than 50,000 km per year and carrying 220 kg+.
In an industrially impoverished region, motorcycle taxis were not just a means of transport; they were employment. For a few years, the Chinese had the markets all to themselves.
Then came the Indians, TVS, and Bajaj, and they created their African empires, winning every sub-Saharan country with their motorcycles. Bajaj, particularly, looked at Africa with a special interest and even created products like the Bajaj Boxer 150, developed specifically for the African market. Yes, putting a 150cc engine in a commuter motorcycle with a 1285 mm wheelbase was sheer ingenuity in 2011.
The customers in Africa wanted motorcycles that could deliver torque, have engines and frames that could take the abuse of bad roads and overloading, and still deliver a meaningful lifespan. The Indian manufacturers delivered better, again thanks to the build quality that they had perfected in their home market.
As a result, today, when it comes to the African ICE market, the Chinese have been marginalized.
Then the Goalposts Shifted
The Indians were flying high in Africa till the end of the last decade, with hardly any competition and great acceptability with local riders. Bajaj Auto lists several African economies where it claims to be the market leader.
Then COVID-19 happened, and while we may not like to debate the geographical origins of the virus, the pandemic did create an immense opportunity for Chinese electric motorcycle businesses.
Economic stability has never been the forte of most African economies. Thanks to the pandemic, the fragile ones tipped over. Their currencies crashed against the USD. With almost all of them being net oil importers, their oil bills ballooned, spiking pump prices beyond affordable levels. Being a Boda with an ICE motorcycle was no longer economically viable.
InsightEV – Global Electric Mobility
Entrepreneurs had already started experimenting with electric motorcycles even before COVID. On paper and in Excel sheets, electrification had a strong potential. There were substantial deterrents, too. The bigger deterrent was the high mileage requirements. The obvious solution: supporting the motorcycles through swappable batteries and setting up a network.
The other deterrent was the fragile grids in Africa, with many countries having low household electrification rates. Setting up swap points was a challenge. Not every micro geography is conducive to battery swapping. Often, swap stations had to be supported with solar panels and power backup options. The deftness of business operations lies in plucking the roses while navigating the thorns.
Most importantly, these were small Africa-based startups. Ampersand was the first organized player. Started in 2014, the progress was slow till 2019, with only twenty motorcycles deployed in Kigali.
The big boys from India were not interested in electrifying Africa. The Boxer 150s and (TVS) HLX motorcycles were selling without a fuss, and their local distributors did not suggest anything was about to change.
COVID-19 Changed the World
Then COVID-19 hit, and post that, electrification gained momentum, driven more by desperation than by anything else. Investor money started trickling into the continent, all aimed at electrifying the Bodas. Ampersand was joined by Roam, Spiro, Max, Kifa, Kiri, REM, Gogo Electric, and many more.
The Indians did not blink.
Perhaps the biggest move in African e-mobility was the generous funding and eventual control of Spiro by Equitane. With Equitane’s backing, Spiro has access to many times more capital than the rest of the African ecosystem combined. They have also deployed more motorcycles than everyone else put together. In doing so, Spiro has emerged as a plausible player that we may term as a ‘manufacturer’ in scale, even though the hardware still comes from Horwin, in China.
China Powers Africa
The Chinese origin is important. Nearly every manufacturer except Gogo Electric and newcomer Zeno has Chinese origins. And when we say that “some players do not have Chinese origins”, it means that the cells still come from China.
The Horwin QBD series is the most popular motorcycle in Africa. It is the motorcycle that gets deployed by Spiro.
The Chinese have been quick to react and realize that this is an opportunity where the early mover has an advantage. So last Canton fair, Chinaworld (excellent publication) reported that at least four new ‘African’ motorcycles were on display.
These are not even the top factories in China; more like the second rung. Yet they took less than two years to come up with motorcycles targeted specifically at a promising market.
Not to mention, the Chinese are also farsighted in co-developing new products specifically for the African market. This, for example, is the TailG Jidi, a Boda Boda motorcycle, co-developed with local startup Kofa, specifically for the African market.
Meanwhile, the Indians…
The Indians have stayed domestic market first despite being strong in Africa. Both Bajaj and TVS still don’t have any electric motorcycles in their portfolio. It was only a couple of months back that CNBC reported that Bajaj had started work on an electric motorcycle to be launched under the Boxer brand name.
Meanwhile, African startup Gogo Electric already does retrofits on the Bajaj Boxer, though the scale of operations is very small.
Yet, it would be fun to watch the IP issues unfold when Bajaj brings in an e-Boxer.
No dates were shared by Bajaj for when the electric motorcycles would be ready, but that may be a long time if the company plans to come to Africa with the e-Boxer. After all, the African e-Boda is not about the motorcycle alone. It is an ecosystem built around swappable batteries, swap stations, and fast chargers. Everything has to be developed and scaled up.
On the other side is an opponent that now turns out 5m long electric luxury sedans in two years.
Bajaj has none of that today. Neither does TVS. Considering the biggest player, Spiro, has now committed USD 280 million (much more in waiting) to take the market from Bajaj, the Indian manufacturer has to counter with a large investment of its own if it plans to retain its kingdom, a kingdom that is fast changing its character.
Large investments should not be a problem; Bajaj is the world’s most profitable two-wheeler manufacturer. It is the intent and the direction that may be lacking. We are yet to see an urgency. That may just be Bajaj’s inability to read the tea leaves.
InsightEV’s report on the African Motorcycle Taxi Market (below) forecasts X.Y million electric motorcycles required for deployment in the African market.
InsightEV – Global Electric Mobility
