Although I have some sympathy with Charles, I do think that the...

Although I have some sympathy with Charles, I do think that the 'big picture' strategy of this company has been a bit flawed over the years.

To give an example, if you are trying to identify the best markets to sell scooters, it would seem to me that the focus should be on either those countries with a relatively low, but rising, GDP per capita, or those with a high GDP per capita.

In countries with a per capita GDP under or around the US $10,000 mark, most people can't yet afford to buy a motor car, so instead people in such countries tend to go for the cheaper option, generally motorbikes and scooters.

Countries where the per capita GDP is above the 25k mark also tend to be favourable markets for scooters as there are plenty of people in these countries who are earning enough money to be able to purchase multiple vehicles.

By comparison, China falls somewhere in between these two extremes, with a mid-ranking GDP per capita at just above $15,000 US per person.

When household incomes in a country start to rise above the 15k mark, motor car ownership seems to increase dramatically, as car ownership starts falling within the reach of increasing numbers of individuals.

As cars become increasingly common in neighbourhoods, the 'keeping up with the Joneses' effect starts to take hold: people watch their neighbours driving past in a car, and their old scooter or bicycle starts to feel a bit inadequate by comparison, so they also feel pressured to sell their scooter or bike and upgrade to a car.

I think this is where China is at the moment, which probably partly explains why Vmoto has been struggling in that country.

The strategy they have adopted recently seems to be the right one, however, and I am hopeful that they will be more careful when it comes to identifying their target markets in future.