BEIJING - With today's uncertainty in China's motorcycle industry, it seems Chongqing Lifan Holdings Co Ltd made the right moves when it began expansion overseas in 1998.

Lifan CEO Shang You noted during the recent high-profile EICMA China - the nation's top motorcycle show - that the future for domestic motorcycle companies is "not at home, but brilliant overseas".

He based his remarks on the figures illustrating a struggling domestic market.

While China's motorcycle production hit 26 million units last year, only 18 million units were sold in the country, a 5 percent drop over 2009, the first decline in the sector's history.

During the first half of this year, combined sales have shown double-digit decreases. Some leading manufactures even saw a slide of 30 percent year-on-year.

Industry watchers expect it will become even more sluggish in the second half.

The net profit for the whole sector was only 10.6 billion yuan last year, less than a single mid-sized car company, Shang noted.

Motorcycle companies that lost money in 2010 suffered combined losses of 640 million yuan, 30 percent more than the year previous.

Lifan's exports and local production in foreign countries that began over a decade ago are now insulating it from the downturn.

Since 2000, it founded sales companies in the United States, Germany, France and Mexico.

It built factories in Vietnam in 2002, Turkey in 2008 and Thailand in 2010.

Lifan plans to open another factory overseas this year, but declined to release the location and total investment at this time. Its sales in overseas markets hit 4.3 billion yuan last year, a figure expected to surpass 5 billion this year.

IPR, branding

"Lifan also has a farsighted view on IPR (intellectual property rights) protection in overseas markets," Shang said.

It is the only motorcycle company among enterprises in China ranked in the top 50 for number of registered patents, according to the State Intellectual Property Administration.

A recent example is software for a chip controlling state-of-the art electronic fuel injection (EFI) developed in partnership with the German company Infineon Technologies and Lifan owned patented EFI technology.

It has also held a series of campaigns to build its brand overseas, including a motorcycle jump over the Red River in Vietnam, a climb up the 6,187-meter Pajoma Peak in Nepal and a show on Mount Kilimanjaro in Africa.

Other efforts include sponsorship of a popular kungfu show in Laos and Kenya. On July 2, Lifan inked a partnership agreement with Italian motorcycle company MV Agusta to expand cooperation on high-end motorcycles.