Carlos Severiano Flores: "People here spend $60 to $100 a month just on cabs."
San Diego On Boulevard Agua Caliente — "El Boulevard," as tijuanenses call it — a block west of the downtown bullring, stands the first and only Shineray motorcycle dealership in the Americas. Eight models of the Chinese-made motorcycles shine their factory newness through the ten-foot-tall windows of the showroom, turning the heads of pedestrians hustling down the sidewalk. Inside, just behind the showroom, Carlos Severiano Flores sits in his office, which barely accommodates him, a metal desk, and a couple of visitors. A soft-spoken man in his 30s, with close-cropped hair and light-brown eyes, he's dressed in brown corduroys and a snug gray sweater.
Shineray showroom. "This is $1200. The cheapest Honda or Suzuki of this size is about $2400."
The thought of importing motorcycles — Chinese or otherwise — to resell in Northern Baja California came to him almost two years ago. "The idea," Severiano says, "was to bring something that was viable economically in Tijuana, transportation-wise. People here spend $60 to $100 a month just on cabs. So transportation costs are very high. We think we can reduce costs for people who can't afford a car or another brand of motorcycle. Other motorcycle brands here are very expensive. But at the price I'm asking, people can afford them."
Another reason Severiano settled on motorcycles over cars was the difference in shipping and tariff costs. "Imported motorcycles don't have very high importation fees," he explains, "because not many people manufacture motorcycles in Mexico. I think there's one brand, Carabela, but it's been a long time since they marketed them. And they're very expensive, about the same prices as a Honda. We do manufacture cars in Mexico, so the tax on imported cars goes up very high. I've seen taxes around 300 to 350 percent. It's the same with clothes. If you want to buy clothes in China and import them into Mexico, you've got to pay 300 to 350 percent of what you paid in China because clothes are also manufactured in Mexico."
After looking at "over 100" motorcycle manufacturers in China, India, Italy, Spain, and Canada, he settled on Shineray, a motorcycle company with its research and development operation in England and its factory in Chonquing, China. Asked why he settled on Shineray, he answers, "Very good prices. Very good after-sale service. And they have been awarded a manufacturing quality certificate."
The certificate, hanging in poster form in the showroom, was awarded to Shineray in February 2003 by the Quality Certification Centre, a Chinese organization that rates manufacturing quality in large factories in China and abroad. The certification convinced Severiano of Shineray's quality. And he believes it will also convince some of the customer base he hopes to secure, maquiladora workers. "Because this is a maquiladora city," he says, "people here, when they see the certificate on the wall, they know it's a quality product."
Before motorcycles, Severiano's company, Mercantil Cospac, a family business he runs with his father, imported other items from China, "things," he says, "such as saladitos -- salted prunes -- and orange juice machines, which we sell directly to supermarkets here." Because of this previous importation experience, Severiano knew where to start the cycle search. "The Chinese consulate here," he explains, "was very helpful. They put me in touch with a kind of business bureau over there. I told the bureau what kind of product we would like, and they gave us a lot of help."
After purchasing the motorcycles from the factory for a price he won't disclose, Severiano pays $5500 to have an ocean shipping container full of bikes and parts shipped from the port of Shanghai to the port of Ensenada. "At first we started importing through Long Beach," he explains. "The cost is about the same, but, with Long Beach, you have to have a broker here, a broker in Long Beach, and a broker in San Diego. It's a lot of paperwork. Coming through Ensenada, it's just one guy I deal with."
One container, Severiano says, carries 25 to 50 motorcycles, depending on the model. The bikes come only partly assembled -- because "it's a lot cheaper to ship them knocked down than fully assembled because of the space a fully assembled bike takes up in the container."
"The frame," he stands up to pour coffee from a side table near his desk, "comes with the fully assembled engine already mounted in it. We put in wheels, sprockets, chains, handlebars, all of the electrical system. It's better to assemble them here because we don't want anyone coming back saying it's factory-bad. If something doesn't work, I change it before I sell it."
Gesturing for his guests to follow, Severiano walks into the showroom and stops at a small red-and-black model with chrome fenders. It looks like a Triumph bike from the mid-1960s. As a couple of men on the sidewalk peer through the glass wall and carry on a conversation about the motorcycles, Severiano says, "This is the size motorcycle that pizza places and restaurants all over Tijuana use for deliveries. There goes one there." He points to a motorcycle buzzing west down the boulevard. "It's a 125 cubic-centimeter, one-cylinder engine. This is $1200. The cheapest Honda or Suzuki of this size is about $2400. The large pizza chains have contracts directly with Honda or Suzuki. They've told me, 'Let's wait until the contract runs out, then we can talk about your bikes and see how well they work.' "
Next to the 125 is a purple-and-white motorcycle with a road-racing body. "This is a sports bike," Severiano says, "but it has a small engine, 150 cubic centimeters. Since we don't have freeways, we don't need all the power. Plus, we bought only this model right now to sensitize the market, see what people need and want to buy. We don't want to bring in something with a big engine because it's expensive, and it might not sell.
"This scooter," he says, moving next to a metallic black number, "has been our biggest seller. It has an alarm, and you can operate the starter by remote control. It also has the 125 cubic-centimeter engine, and it's automatic. A lot of my customers have said they like it because it gets them across the border quicker when they just want to go to the bank or to pick up some mail in San Ysidro."
The scooter sells for $1525. Along with a couple more 150 cubic-centimeter motorcycles -- a dirt bike and a street bike -- Severiano sells a four-wheel, all-terrain vehicle and a silver-and-black cruising bike with a reclined seating position and a 250-cubic-centimeter, V-twin engine, the largest engine Shineray produces. "They have no freeways [in China] except in some cities, so they don't really need a lot of speed there. Plus, most people can't afford one this big."
The 250 is Severiano's most expensive bike at $3475, though he sells trikes at about the same price. Powered by 150-cubic-centimeter engines, the three-wheelers come in delivery van, open-bed, rickshaw, and passenger-van configurations. "Napa Auto Parts is using [the delivery van] model," Severiano says. "They wanted something cheaper to operate than a truck that could still carry larger parts, like a differential or a transmission. We've sold some of the passenger type to Hotel Corona down in Ensenada. They rent them to the people that come on the cruise ships."
Severiano says he spent $60,000 to start up the dealership. From the time he opened his showroom in the last week of November through February of this year, he says he sold about 60 motorcycles, a sales figure he calls good, though "a little lower than I was expecting." He finds hope for the future in the possibility of competing for delivery contracts now held by Honda and Suzuki. "Our prices are 40 to 50 percent lower than Honda and Suzuki," he says.
A challenge facing Severiano is the way Mexicans view motorcycles. "We don't have the culture of motorcycles in Mexico," Severiano says. "People associate them with wealthy people and businesses."
Tijuanenses, Severiano says, also worry that motorcyles wouldn't be safe in the city's frenzied traffic. "Drivers are very aggressive," he explains, "and there are a lot of accidents. But we tell people that they can control how safe the motorcycle is by riding safely. We warn them not to let the adrenaline get hold of them. Because when you are on your motorcycle and you're going fast, it's easy to feel like nothing can stop you."
A source of optimism for Severiano are the credit programs offered by many of Tijuana's maquiladoras through which the factories buy vehicles for their workers to commute in or on. "We're trying to build up the idea of motorcycles for everyone. We're selling it as cheap transportation for factory workers and commuters."