China has emerged as one of the world’s largest suppliers of golf cars and trolleys, despite having a history of less than a decade. Exports have grown at double-digit levels annually, increasing by more than 20 percent in 2007. Rising raw material costs, higher operational expenses and lowered export tax rebates took its toll on product prices, resulting in a 5 to 20 percent increase in 2007. China suppliers have adopted various cost-saving measures to prevent further surges, foremost of which are reducing wastage and defects, increasing efficiency and expanding capacity.

Executive Summary:

China is one of the world’s top sources of golf cars and trolleys, despite having a history of less than a decade. Exports are robust, with annual growth at double-digit levels. In the 11-month period ending November 2007, shipments of golf cars and trolleys, along with other related equipment, rose more than 20 percent to exceed US$600 million.

Exports are projected to continue growing in 2008, although at a slower pace. Many suppliers do not expect the increase to go beyond 20 percent.

One of the primary reasons for these forecasts is the economic slowdown in the US, which is the world’s largest market for golf equipment and accessories. For China’s golf cars and trolleys segment, in particular, the country accounts for more than 50 percent of exports.

Another factor that may inhibit growth is the fact that prices of China-made models are higher by 5 to 20 percent. Suppliers had to adjust quotes in 2007 as production costs increased and margins became slimmer due to the reduction of the export tax rebate. Most companies expect to raise prices further in coming months, but the majority will limit adjustments within the 20 percent range to attract more orders.

Faced with these difficulties, many small makers are either closing down or shifting to other products altogether. Many midsize and large companies, on the other hand, are focusing on high-end models or building up other lines to boost overall sales and profits. Consequently, the industry will remain highly concentrated, with only a few large suppliers accounting for the majority of output and exports.

The following are some of the other key trends we see in China’s golf cars and trolleys industry:
• More designs for the high-end segment will be released. Many of these will be fitted with headlights, turn signals and other features that will make them suitable for use outside of golf courses.
• The EU will be the primary focus for most suppliers, but the US will also remain a key export destination.
• Makers of golf cars, especially electric models, will expand their product lineup to include related vehicles such as mobility scooters, personal carriers, tourist coaches and material handling units.
• Electric golf cars and trolleys will become more environment-friendly as the adoption of lithium-based batteries increases. The use of these power sources will remain confined to the upscale segment, however, due to their high cost. 
• The production capacity for golf cars and trolleys will expand, primarily at midsize and large factories that also expect sales of related lines to increase. Most will upgrade existing facilities, although a few will establish new plants.

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