Lifan: The Guys Who Are Freaking Out The Auto Industry
I’m not a big motorcycle guy. In fact, I was a little freaked out when my kid sister, a grown-up AP reporter, bought a Yamaha scooter. But I’ve got to say, I’ve been fascinated with the brand Lifan Motorcycles, ever since I read about them in Don Tapscott’s
Wikinomics.
They’re decently large company ($900M annually), but they’re only about 1/50th the size of, say, BMW. They’re based out of Chongquing, a growing metropolis near the Yangtze River. It’s no little city-state, either - Chongquing is the most populous of China’s provincial-level municipalities. Lifan burst onto the scene fairly recently (around 1992), initially beginning as a motorcycle repair shop. Today, they’re cranking out over 700,000 cycles a year, shipping to over 100 countries.
It’s no surprise that Lifan and its Chinese compatriot brands are really taking over the motorcycle industry; they currently account for nearly 50% of the global motorcycle output now, according to Tapscott’s book. It’s what they’re doing with cars that’s beginning to really freak out the global automotive industry. They make a car called the Lifan 520, which I’d position against a Kia Optima or a souped-up Honda Civic. This car has leather seats, dual airbags, a DVD system and a huge trunk. It retails for $9700, which is about $6000-8000 less than the other two cars.
The reason Lifan made it into a book that was largely about knowledge management and peer collaboration was because they used these methods to create tangible goods, rather than information-based services, which is usually how this type of technology is leveraged. Lifan’s physical assembly model is totally modular.
Remember, this company sprang out a repair shop not too long ago, so the idea of using interchangeable parts to accomplish larger tasks is in their blood. In the car and motorcycle industries, traditional production networks resemble a pyramidal structure, with one leader commanding network segments to crank out whole products. Lifan has trumped the supply chain challenges that the hierarchical model encountered by working in clumps, or clusters. These small entities collaborate on development, design and manufacturing.
By the way, don’t bother looking for a Lifan 520 on Craigslist. I already checked. They’re not in the States yet. To learn more about how Lifan is using peer collaboration, pick up a copy of Wikinomics
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