Lot of info..

Maybe if I had not been to China and seen ATV's pounded together with impact guns and ball peen hammers...Id give you a decade...

Having been there Id say you better be patient.. maybe in your grand kids lives...

 

So which brand do you import?

 

Not sure I understand. Are you suggesting, because I have this opinion, that I must have a vested interest in this happening?

Not at all. I have no horse in this race. I'm not arguing that Chinese ATV quality is good. In fact, I made the opposite observation in this thread, when I suggested that my own "used ATV" shopping experience indicated that the name brand stuff lasts, and the Chinese stuff doesn't. I didn't even own an ATV until a few days ago. I'm just a guy who is interested in observing and thinking about these patterns.

My own background is in software development. In my business, I have to complete with imported code from India and Russia. It's the same basic economic model: Poor initial quality, bad service, cheap price. But improvements are being made and the competition will get stiffer until most of us become commodity providers.

 

tv's is one thing- atv's (off roading vehicles) is another.

by the time (if) the chinese catch up to the quality of present big 7- it'll be too late- because the big 7 will be working on something even better (well, maybe not honda that should wake specta up )

telling ya- you won't see china making any atv to compete with the current big 7- too much money and too much of a gamble. I'd bet the farm on it

 

there's absolutely no "pattern" comparison to software code and atv manufacturing- there's nothing that can even be remotely related through business principal between the two. You can't just state one business model and assume that's where it's heading- there is no "basic" economic model.

software cost nothing but bandwidth to ship around the world, can be mass produced by a team of 4 humans with $10k worth of equipment and can be accomplished in a 1500 sf office space. Some of the item's in your list below may very well be manufactured in china, but not most- and certainly not the best. They do well because they sell in quantity for cheap. I would hardly consider china has cornered the market in any of the items listed below:

Many consumer electronics categories
Musical instruments
Bicycles
Sporting goods
Photovoltaics
Batteries
Toys

Time will tell- but I wouldn't hold your breath. China might look powerful on paper, but not so good in terms of tangible assets. Some alarmists believe china will some day own America- but 62% of the land in america is privately owned- good luck with that! China will eventually implode from within.

 

The abstract, for both industries, is that cheap labor drives down final cost. There is no economic law in the world of making ATVs that says $2/hour labor can't compete with $15/hour labor. If the lower paid guy can be taught to produce nearly the same level of quality as the higher paid guy, it's not even a horse race. Western businesses are becoming experts at how to get acceptable quality out of Chinese factories. To a scary degree.

Sure. If the software only has to say "hello, world" in one langauge.

There's just a little bit more to it than that. When you consider project managing, specifiying, designing, writing, testing, documenting and deploying systems with millions of lines of code, integrated with and dependent on other complex systems, delivering finished software isn't just about bandwidth.

This is not an all-or-nothing equation. There will still be high end ATVs not made in China. But the majority of ATVs will probably be made there someday. Many will still carry the same brand names they use today.

I'm sure there are Audiophiles who insist that the best stereo amplifiers are American or maybe European made. But, unlike 30 years ago, when most good amps were made here and widely purchased, today, you can only find such things at a very limited number of specialty dealers, and they cost about 5 to 10 times as much as the very good and widely popular stereo amplifiers that are made in China.

I'm not rooting for China to accomplish this.

I simply think it's foolish to believe that economic reality doesn't apply to ATVs because there is something unique about the ATV market.

Lots of people thought Japanese motorcycle companies would never be able to compete with Harley-Davidson. Harley-Davidson nearly died, several times, because their management didn't wake up until the company had to be put on the chopping block. They did eventually reinvent themselves, but new Harleys are not really affordable for the everyday working man anymore, are they? It's become a niche product, while the Japanese brands that people used to say were junk now dominate the landscape.

 

sorry for the long post-

I understand what you’re saying- but your economic model isn’t the only relevant model, and I don't think it's relevant in this case... Like you said, there are many examples of manufacturers losing out to cheaper labor costs in China- however; the atv market IS one of many unique markets that China will find itself lost in.

The Chinese are cleaning up selling cheaper “knock-off” atv’s. They would have to invest tens of billions on tangible infrastructure to manufacture atv’s on par with the other 7 major manufacturers that’ve been building quality (except Honda ) atv’s for dozens of years.

China does not need to do this- China has cornered the market on cheap “novelty” atv’s. China's model is "build a cheap atv that looks like a quality atv, and continue to sell them in America in high quantity for as long as the'll buy'em."

The risk for China to invest billions into quality engineering is too great (especially based on their tarnished reputation)… Cheap atv’s are a cash cow for China and always will be. No other major manufacturer is pumping out cheap units, therefore, theirs is no competition in those regards; China is fulfilling one demand, and the other major (big 7) are filling the other demand, and both are cashing in.

If China started pumping out high quality atv’s tomorrow- and ceased with manufacturing low quality atv’s- they’d lose both markets- they’ll lose billions because no one would buy a “high quality” Chinese atv when they can buy one from the deeply rooted and reputable big 7. Americans (for the most part) are extremely loyal consumers. China has a long and far reaching reputation of being cheap in the automotive industry- that ain’t changing anytime soon.

A better example-

Milwaukee, Bosch, Dewalt, Skill, Makita, Hilti

Are all brand name, premium power tools. Each manufacturer has hundreds of factories all over the world…

You could spend 1/3 the price for a Chinese knock-off power tool- yet, good luck finding a Chinese powertool in any GC job box. Maybe some homeowners tool chest but not on any professional job site. Hand tools are another unique market- there’s a huge demand for cheap hand tools, and everyone sees them at the dollar stores, auto parts stores and elsewhere- china has been producing cheap hand tools for 50 years- but you won’t find them in any snap-on, mac, matco, craftsman or wayne tool chest in any shop unless it’s a hacked up modified re-welded tool to reach a bolt.

The tool industry is a great comparison / example on how both industries co-exist. China is making loads of money on cheap tools- and they don’t need to make high quality tools to compete with major brand name tool manufacturers… same thing with atv’s.

 

Yes I am.. While it may not be ATV's (but I doubt it).. Been doing this a while here...in the past when ever someone as passionate as the Chinese industry posts... They are connected to it some how...

 

The Japanese came here with a HIGH quality, reliable product.. and backed it up with dealer networks..
The Japanese proved most everyone wrong..

The Chinese came here with Junk... and rather than support that Junk.. they import a new "brand" every year or so...
The Chinese have fooled a few..

 

Why tens of billions of dollars to make ATVs? Artic Cat, the entire company, is worth about a quarter of a billion dollars, and that includes the snow mobile business. Why would it cost tens of billions of dollars to recreate something that can be bought for about a quarter of a billion?

It's not "China" per se, but hungry Chinese companies who want more than what they currently have. Capitalism at its best, even when strangely harnessed to a Communist regime.

Quote:

If China started pumping out high quality atv’s tomorrow- and ceased with manufacturing low quality atv’s- they’d lose both markets- they’ll lose billions because no one would buy a “high quality” Chinese atv when they can buy one from the deeply rooted and reputable big 7. Americans (for the most part) are extremely loyal consumers. China has a long and far reaching reputation of being cheap in the automotive industry- that ain’t changing anytime soon.

It's not an either/or choice. They are perfectly capable of being in both the high and low ends of the market at the same time. Certainly no shortage of desire, capacity, or capital.

Agreed that professional tool users wouldn't knowingly seek out knock-offs or cheap tools. BUT, that doesn't mean some of their favorite tools aren't in transition to being made in places like China or India. The issue for that market is whether or not the consumer perceives the tool is not quality, thereby ruining the reputation. All of those brands have at least some production in China.

If you walk into a Best Buy and ask to see the very best LED TV they sell, there's a good chance it's made in a Toshiba or Sony plant in China. Consumers won't assign signficant value to where something is made if the demonstrated quality is good.

It happens in slow motion and not very publicly, so it may be hard to comprehend at times, but it happens.