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Does the e-Mobility Wave Spell the End of Taiwan’s 28,000 Motorcycle Repair Shops?

Does the e-Mobility Wave Spell the End of Taiwan’s 28,000 Motorcycle Repair Shops?

Source:Gogoro

Thirty years ago, motorbike repair shops were even more ubiquitous than convenience stores are today. The nearly 30,000 workshops were real cash cows. Now, with the advent of e-bikes, traditional mechanics feel pressure to adjust and venture into unfamiliar terrain.

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Does the e-Mobility Wave Spell the End of Taiwan’s 28,000 Motorcycle Repair Shops?

By Kwang-Yin Liu
web only

Wenfu Scooters in downtown Hsinchu is a small street-front repair shop in a typical shophouse. Its second-generation owner, 66-year-old Mr. Chen, began in the trade as an apprentice almost half a century ago.

His three sons have all become teachers and have no plans to take over the family business. Being close to retirement, Chen is not really worried about the possible impact from electric scooters on his business. However, he acknowledges that the typical mechanic will find it difficult to transition from gas-powered scooters to battery-powered electric ones, because the technologies are quite different.

Although electric scooters presently have a market share of just 10 percent, this is bound to change in the coming 20 years and will affect the livelihood of Taiwan’s remaining 28,000 traditional scooter maintenance and repair shops. (Read: Can Taiwan Transition to Electric Scooters?)

Scooter Kingdom” Taiwan boasts more than 13 million scooters for a population of 23 million people. An avalanche of scooters roaring down the exit ramp of Taipei Bridge is a familiar and oft-used photo motif that has become emblematic of the island.

When 1,300 owners of Taiwan-made Gogoro electric scooters staged a flash mob at the spot last October, cascading down Taipei Bridge and setting a new Guinness world record for the largest parade of e-scooters, the event seemed to herald the new era of e-mobility. (Read: Founder of Gogoro: 'Young People Can, They Just Don’t Have The Stage')

More than 1,000 Gogoro scooters stage a flash mob at Taipei Bridge, setting a new Guinness world record for the largest e-scooter parade. (Source: Gogoro)

Sales of e-scooters keep rising also thanks to substantial government subsidies and aggressive marketing campaigns by manufacturers and dealers. Last year, almost 90,000 e-scooters were sold, more than twice as much as in the previous year. Electric scooters now account for 10 percent of all scooter sales.

Given this trend away from gasoline-fueled scooters, Chang Ching-pao, who runs a scooter repair shop in New Taipei City’s Zhongli District and doubles as head of Taiwan’s National Motorcycle Association, is not as optimistic as his colleague in Hsinchu about the prospect for conventional scooter mechanics.

“I felt early on that electric vehicles are the trend of the future,” remarks Chang. Twenty years ago, he already saw concept e-motorbikes at the Tokyo Motor Show, and on a trip to San Francisco the city’s light rail system made him realize that electric vehicles are the key to future urban mobility.

That future is much closer now. In a bid to fight air pollution, Taiwan’s government has announced that by 2035 – in less than 16 years - all newly bought scooters must be electric ones. This not only poses a massive challenge for manufacturers of conventional scooters; for the 28,000 workshops across Taiwan, mostly small- and medium-sized businesses employing a total of tens of thousands of people, this creates enormous pressure to transition and adjust to the new technology.

The Difficult Transition to Battery-Powered Vehicles

Motorbike repair and maintenance has always been associated with getting ones hands black with grease, oil and grime. The dirty routine jobs include oil changes, cleaning and lubricating chains, and repairing spark plugs.

The maintenance and repair of electric motorcycles, however, follows a different logic.

As Chang explains, extensive knowledge is needed when dealing with gasoline-fueled engines. Typically, an apprentice needs three and half years to master the various engine repairs. Becoming a master mechanic - someone who can diagnose vehicle problems just by listening to the unusual sound or abnormal vibrations of the engine - takes many years of experience.

“Electric motorbikes are like 3C products, you hook them up to a computer for diagnosis and immediately know where the problem lies, and change the parts that are broken,” says Chang. Not only do the maintenance and repair of electric scooters differ from those of gasoline-powered scooters, they also do not leave much room for ordinary workshops to become involved.

He believes transformation is an inevitable development. “If we don’t learn (the new technology), how can we sell scooters in the future?” asks Chang. This means forgetting much of what the mechanics learned in the past and starting over.

Chang’s son is also working in the business that is affiliated with Taiwanese scooter brand Kymco. Therefore, he has already attended several training sessions for the Ionex battery system that powers Kymco’s smart e-scooter. Local distributors offer training virtually every month.

Chang Ching-pao, head of Taiwan’s National Motorcycle Association, has run his scooter workshop in Zhongli for 30 years. He believes that traditional repair shops will inevitably need to transform their business given the trend towards electric scooters. (Photo by Chien-tong Wang)

Aside from training, services must also be upgraded. As Chang explains, all he has to do when a customer collects a motorcycle is hand over the keys and start the engine. It’s a different story with electric vehicles. A typical handover takes more than 30 minutes because every single step – from downloading apps, to going online, removing the battery, charging to using the fast-charging station in front of the store - must be explained in detail, according to Chang.

Chang says that not all people can commit enough resources to learn these things.

Greasy Motorcycle Garages to Disappear in 3 to 5 Years

Chang says that independent “black hand” garages that are not affiliated with the distribution system of a vehicle maker and do not participate in professional associations will feel the greatest impact.

During the economic boom in the 1980s, opening a motorcycle repair shop was easy and sure to make money. But Chang observes that many of these owners are now close to retirement, while their children are not interested in taking over.

He describes the situation in a typical “black hand” garage as follows: The septuagenarian owner sits alone in his workshop and does not even bother to switch on the lights. The space is dreary and humid, and when customers appear at the entrance, they first ask, “Are you there, boss?” because they are not even sure whether the shop is doing any business.

Many owners of such repair shops do not have the means to invest in learning new technology because they are not affiliated with a brand. Chang predicts they will be slowly squeezed out of the market.

The motorcycle association and vehicle makers continue to provide training to help workshops transition and upgrade. The Industrial Development Bureau under the Ministry of Economic Affairs is also mulling subsidies to support the transition. However, the “black hand” garages are most in need of guidance. Chang regards this as a very realistic approach. He believes that garages that lack a special business concept and are unable to sell or service electric vehicles are bound to be eliminated.

Chang recalls that more than ten years ago, when fuel-injected engines became mainstream, a number of garages were squeezed from the market in a first elimination wave. He predicts that the impact from the coming wave will be much greater.

Chang had a rapid charging station for Ionex batteries installed outside his store last year, but customer response has been lukewarm so far. Staff members say that most Kymco smart scooter owners prefer to charge their vehicles at home. (Photo by Chien-tong Wang)

During the 1.5 hours we spent at the repair shop, several dozen customers came in, all having problems with gasoline-fueled scooters. Chang says that so far only a handful of customers use the rapid charging station, yet he regards the investment as an opportunity to learn: “We need to study this, it’s the trend of the future, or else we will be eliminated.”

Back in Hsinchu, Chen responds with a relaxed smile when asked whether he worries that he will go out of business once the e-mobility wave rolls in. He predicts that it will take at least another ten years before that happens.

He does not have much to worry about given that he is on the road to retirement.

As a first step, he terminated his distribution rights for brand scooters five years ago. Other, younger scooter workshop owners, however, will have to face reality – transition to electric vehicle maintenance or go under in the second elimination wave. (Read: Inside a Digital Transformation)

Translated by Susanne Ganz
Edited by Sharon Tseng

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