Employees at Lifan's motorcycle production line. Provided to China Daily

Shifting gears

An avid fan of history books, Yin says it is important for companies and individuals to adjust their development mode according to specific situations.

"Just like in wars, the battlefield is constantly changing as you move forward. In today's world when changes take place every day, we should be prepared to transform accordingly."

For Lifan Group, Yin says, the immediate challenge is to further enhance its presence in the overseas markets. "When Lifan was set up, we decided to focus mostly on the domestic market. But we realized that we faced formidable competition in the domestic market from big foreign brands and large State-owned companies. We decided to focus on overseas markets as it offered higher profit margins even though there were stiffer challenges," Yin says.

Lifan adopted many measures to establish its presence overseas, with most of its strategies centered on localization, including local hiring and production. In Africa, most of the company's products are made from heat resistant materials to combat the hot weather, says Mou Gang, vice-president of Lifan Group.

Lifan is now in more than 160 countries and regions including Europe, the United States, Southeast Asia and Africa, and works with more than 140 dealers. In 2011, the company's exports reached $636 million (480 million euros), and accounted for more than 40 percent of overall sales revenue and 60 percent of its profits. Sales in the US and Europe accounted for 5 percent of the total overseas figures in 2011 and are expected to increase to 20 percent by 2015, Yin says.

Though exports are the major money-spinner, the company is also sparing no effort to enhance its presence in the domestic market.

"With the dramatic improvement in living standards, the domestic market is also becoming increasingly important for us. In the future, we expect domestic sales to account for 40 percent of the total sales with the remaining coming from overseas markets," Yin says.

Versatile approach

But the real transition for the company would be when it is able to stamp its presence as a company focused on making different types of automobiles.

"Although we started our business with motorcycles, we realized that making cars is more profitable, with automobile costs typically more than 15 times that of a motorcycle. We want to transform ourselves into a large automobile manufacturer, more on the lines of Honda of Japan and BMW of Germany," Yin says.

Lifan got product permission from the National Development and Reform Commission in 2005 to make cars and in January 2006 rolled out its first sedan - the Lifan 520.

Yin says the company exported 46,000 vehicles last year.

"Auto sales constitute roughly 60 percent of the group's revenue and the rest is from the motorcycle sector. It is expected that by 2020, revenue from the automobile sector will be four-fifth of our group's revenue, with the rest from the motorcycle business," says Yin, speaking Mandarin in the typical Sichuan accent, fast and full of changing tones, and exhilarating sounds much like his favorite food, hot pot.

But experts warn that the bright future of the Chinese automobile industry is also fraught with risks and difficulties.

Shi Jianhua, deputy secretary of the China Association of Automobile Manufacturers, says rising raw material and fuel costs will affect market development. Other obstacles like an appreciating yuan and trade frictions are also loom.

Yin agrees that the market situation now is even more severe than in 2008 when the global financial crisis broke out.

"Only those companies that can move up the value chain by providing better value-added products will be able to find a way out in these kinds of situations. That's why we want to make more mid- and high-end vehicles as part of our third transition."

Yin says that for China's automobile brands, the biggest challenge is the lack of core technologies. "It is important for companies to develop their own patents and brands," he says. Lifan owns more than 6,482 patents and spends roughly 5 percent of its revenue on R&D.

The company has also set up R&D centers in Chongqing and Brazil , the first private automobile company to have a national R&D center in Brazil. Lifan is also the first Chinese motorcycle manufacturer to have a national technology center in Chongqing.

"We are also looking at the possibility of having another R&D center, probably in Europe, by 2015," Yin says.

The other side

Lifan has also invested in financial and real estate businesses. "But these industries cannot be deemed as pillar industries for Lifan to develop. Only the automobile and motorcycle business can help us to achieve our ambitious targets," says Yin with a confident smile.

Yin still has not lost the passion and zeal for hard work. Employees at the Lifan units are constantly on their toes, as Yin is known to make frequent checks of the manufacturing facilities and production techniques.

Like his favorite businessman Henry Ford, who worked until he was 85, Yin never thinks he is too old to start a business, and plans to become the oldest entrepreneur globally.

"The oldest entrepreneur till now is someone who is 88 years old. I am still in the prime of my career and hope to break this record. I hope I can work another 15 years and help make Lifan an international automobile giant, besides being a motorcycle tycoon."

Contact the writers at huhaiyan@chinadaily.com.cn and mawei@chinadaily.com.cn