ATVs

	Zhejiang Lianmei's LMATV-110F model features a 110cc, 4-stroke single-cylinder air-cooled engine. Price is $270.

Backed by a strong support infrastructure, this city's output and exports are forecast to rise even amid challenges.

Yongkang remains China's leading hub for ATVs. Almost half of the country's total output and exports come from this city in Zhejiang province, and the proportion is expected to increase in coming months despite hurdles.

The 350 suppliers there benefit from the center's established auxiliary industries.

Considered China's hardware capital, Yongkang has a number of companies engaged in parts and accessories fabrication. Factories are setup in several business parks, including Hardware, Huku and Great Wall, where most ATV makers are also located.

This arrangement not only facilitates component procurement but also encourages product development collaboration among manufacturers.

The Zhejiang Provincial Recreational and Sports Vehicles Association, which is based in Yongkang, assists suppliers in forming these strategic alliances. This is under efforts to solidify the province's status as the source of innovative technologies in the line.

As regards overseas trade, the city's proximity to seaports is an advantage. Most companies export products from the Lingbo harbor, as it is nearer and charges a lower rate compared with other shipping points.

All these factors aid Yongkang makers in dealing with tough challenges.

The past year has seen a significant change in national policies affecting the ATV industry. The stringent requirements for acquiring an export license, the reduced tax rebate and the new labor law have forced many small companies to shut down operations. As such, the supplier base has shrunk by more than 30 percent.

Currently, companies fear the looming global economic recession. The trade barrier in the Western market is another concern.

Even so, ATV manufacturers are optimistic. The majority is estimating at least a 30 percent rise in output and exports in the next 12 months.

This upbeat outlook is influenced by high demand from Europe, North America, Australia and the Middle East, regions with strong purchasing power.

Suppliers are also anticipating a positive outcome from their differentiation strategies. These include specializing in one or two product categories to boost competitiveness, and collaborating with experienced engineers in Chongqing, which is a hub for high-power ATVs, in developing new designs.

The quality, safety and efficiency of units are also being emphasized.

Yongkang makers offer youth/children's, sports, utility and sports-utility ATVs. The first two types account for the bulk of output.

Designs for children's use have a lower speed limit and a safety on/off switch. Sports models feature stronger frames, components and tires. Both exhibit a displacement ranging from 50 to 300cc.

The majority of companies source engines from Chongqing. The popular brands include Longxin and Zongshen. Materials for the housings and tires, on the other hand, are procured locally.

Steel is the predominant material adopted for the body and the suspension because it is durable and costs less than aluminum. Suppliers, however, can also employ the latter on request.

Yongkang-made ATVs meet CE, EPA and EEC standards. They go for between $200 and $800. The engine displacement is the main price determinant.

As designs under OEM and ODM contracts constitute 60 percent of exports, manufacturers' R&D teams focus primarily on complying with buyers' requirements.

These groups, each composed of 10 specialists, render client-specified frame, tire and suspension designs.

Because engines are outsourced, customers define only the performance parameters of the units to be installed.

Companies such as Zhejiang Chaozhong Industrial Co. Ltd complete prototypes in four to six months, depending on the availability of materials and components.

Models bearing in-house brands represent 10 percent of shipments. OBM business, however, is strong among some Yongkang companies. Ninety, 30 and 25 percent of exports at Zhejiang Kaifeng Group Co. Ltd, Zhejiang Lianmei Industrial Co. Ltd and Xiongtai Group Co. Ltd Vehicle Branch, respectively, consist of ATVs carrying in-house brands.