Expanded production of ATVs by large manufacturers in Taiwan has pushed profit margins for many of the island nation's 20-plus other quad manufacturers down to between 15% and 20%, or half of where they were just a few years ago, according to a recent report by the China Economic News Service.
Taiwan's most prolific exporter of ATVs, Kwang Yang Motor Co. (KYMCO), expanded into the development of four-wheel products three years ago. Sanyang Industry Co. (SYM), a company now supplying a quad to Bombardier Recreational Products (BRP) of Canada, introduced its first ATV in March.
Companies such as Kwang Yang and Sanyang have proved successful due to their ability to sell at a lower price than the local competition. Their prices are lower because, with an advantageous parts-procurement position and strong R&D capability borrowed from their two-wheeler businesses, they are able to keep costs lower.
However, according to the CENS report, both Kwang Yang and Sanyang say that their low-price marketing strategy is a response to cutthroat competition from rivals in China and is not designed to force smaller Taiwanese suppliers out of the market.
Copyright 2005 Powersports Business