Sun, Jun 30, 2002 page12

• Trade rules rev up motorcyclists

  Taiwan's entry into the WTO means the motorcycle market, long restricted to machines under 150cc, has to open up and almost every manufacturer in the world is scrambling to get some of the action

  • By Keith Bradsher / NY TIMES NEWS SERVICE
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  Chen Ming-hwa, a 22-year-old college student, watched intently as a repairman here modified the engine on his gray 125cc Kymco motorcycle to increase its power to the equivalent of a 180cc bike.

  But for Chen, the modification was not enough. By the end of the year, he hopes to buy an imported Kawasaki motorcycle with a much bigger engine that displaces at least 500 cubic centimeters. "I'm getting a little bit tired of a small bike," he said. "I want the feeling of a bigger bike."

  

  Under the terms of its accession to the WTO in December, Taiwan, one of the world's largest motorcycle markets, is dropping a ban on private registrations of bikes with engines bigger than 150 cc. The ban was imposed in 1979 to conserve energy, but it has served as a trade barrier as well. More powerful motorcycles have been reserved for the police and the military. Many motorcycle owners are now getting their bikes modified to make them more powerful. In Taipei, Taiwan, Chen Ming-hwa, left, monitors Huang Mao-feng, a mechanic, who is making his bike engine more powerful.

  PHOTO: NY TIMES

  Chen and many other Taiwanese will get their first chance on Monday. Under the terms of its accession to the WTO in December, Taiwan, one of the world's largest motorcycle markets, is dropping a ban on private registrations of bikes with engines bigger than 150cc.

  More powerful motorcycles have been reserved for the police and the military here since before Chen was born, and they have acquired a special mystique as a result.

  The ban was imposed in 1979 to conserve energy, but it has served as a trade barrier as well. Taiwan's three motorbike manufacturers -- Kymco, San Yang Industry and Yamaha, a joint venture between a Taiwanese company and Yamaha of Japan -- are extremely strong competitors in the market for small motorcycles, supplying the entire domestic market and exporting one-third of their production as well. But the Taiwanese manufacturers have little expertise in building large motorcycles.

  Practically every major motorcycle manufacturer in the world is now preparing to re-enter the Taiwan market with bigger bikes, including full-line Japanese makers like Honda and Kawasaki and luxury and specialty brands like BMW of Germany and Harley-Davidson of the US. They are drawn to an unusual market where motorcycles outsell cars two to one -- the result of US$2.20-a-gallon gasoline prices, chronic traffic jams and average income still a bit below those in the West.

  "Not importing for more than 20 years -- definitely, a lot of buying power accumulates," said Roland Lu, the special-sales manager in Taiwan for BMW motorcycles. BMW is planning to sell motorcycles with engines up to 1,200cc in Taiwan later this year, for prices reaching US$30,000.

  Yeh Feng-ming, a spokesman for San Yang, said his company and its domestic competitors were confident that most Taiwanese would continue to buy small domestic motorcycles, because they are very cheap by world standards and can be serviced practically everywhere. Motor scooters with 50 cc engines retail for around US$1,000 here; motorbikes with 150cc, about twice that. The domestic manufacturers are also trying to develop motorcycles with engines of up to 250cc.

  Still, government officials are watching carefully. "Taiwan is pretty advanced in the small scooters," said Yeh Wei-yu, the senior engineer for motorcycles at the Industrial Development Bureau. "The local industry is way behind on the larger bikes."

  Many Taiwanese industries, including high-technology businesses like semiconductor and computer manufacturers, are moving operations to mainland China. But the motorcycle industry has stayed here, employing 10,000 people in this nation of 20 million, and that gives it extra influence with government officials who worry about the loss of manufacturing jobs.

  China is trying to jump directly from bicycles to cars, skipping over motorcycles, which produce nearly as much air pollution as cars. The Chinese government has discouraged the establishment of a large domestic motorcycle industry.

  While dropping the ban on private registrations of large motorcycles, Taiwanese regulators are taking several steps that will tend to slow any shift toward big imported bikes. For starters, they are imposing strict tailpipe emission rules on motorcycles over 250cc.

  Regulators are also drafting the world's most stringent standards for how hot the exteriors of motorcycle exhaust systems can become. With 10 million motorcycles in use here, nearly one for each adult, many commuters in shorts suffer burns on their legs from grazing other motorcyclists' tail-pipes and mufflers in dense traffic.

  The government will also require special driver's licenses to operate bikes with engines over 250cc. Motorists must take 32 hours of instruction to earn the special licenses, and the government has so far only offered a single small class, using government-owned bikes. Private driving schools are lining up to offer the course once they too can legally register big motorcycles.

  Yeh said all these policies were meant to protect the public interest, not to erect new, less obvious trade barriers. "Taiwan cannot afford to do anything to hinder the market," he said, because of a national commitment to abide by free-trade rules.

  Some motorcycle shop owners doubt that there will be many buyers for big motorcycles, especially at first. They warn that the market even for small motorcycles has been weak because of a long recession that is only now starting to show signs of ending, and because of Taipei's new subway system, opened in stages over the last four years.

  Lee Huang-fu, the manager of a motorcycle store across the street from where Chen was having his bike engine upgraded, sat next to a battered desk this week and looked sadly at his selling floor, where a few salesmen loitered with little to do. "The economy is bad," he said. "People cannot afford even the small bikes nowadays."
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