Thu. Nov 24th, 2022

VietNamNet Bridge – Motorbike manufacturers have got numbed on the information
that the government of Vietnam would restrict the number of motorbikes in
circulation. Exporting motorbikes would not rescue the manufacturers if the
domestic demand is restricted.

 

Vietnam, motorbike industry, infrastructure, PPP, capital

Under the master plan on the road transport development by 2020, Vietnam would
have some 36 million motorbikes.

A report by the Ministry of Transport showed that by the end of July 2012,
Vietnam had had 37,191,126 registered motor vehicles, including 35,240,162
motorbikes. This means that the 36 million motorbike threshold has been nearly
reached.

The information has dealt a strong blow on motorbike manufacturers. Prior to
that, experts predicted that 4.5 million motorbikes would be consumed by 2018,
which then prompted manufacturers to expand their factories to increase the
production capacity to 5 million products per annum.

Oversupply will force manufacturers to boost exports

The government of Vietnam has many times urged motorbike manufacturers to export
motorbikes, planning to earn 1 billion dollars a year from motorbike exports by
2020.

Motorbike manufacturers have been exporting their products over the last 10
years. Some 100 percent domestic manufacturers have been exporting finished
products and motorbike parts to 24 African countries with the total export
turnover of $10 million a year.

Piaggio Vietnam exports 30,000 products a year to ASEAN markets, while planning
to penetrate the US, Indian and Taiwanese markets. Honda Vietnam reportedly
exports its Dream and Wave brand motorbikes to South East Asian countries worth
$40 million a year. The manufacturer has exported SH and PCX to Europe and Lead
125cc to Japan, about 12,000 products a year.

The experts from JICA (Japan International Cooperation Agency) believe that with
the high localization ratio of over 90 percent and the big market scale (the
fifth biggest market in the world), Vietnam would be able to become a motorbike
center in Asia, which would churn out motorbikes not only for domestic
consumption, but for export as well.

JICA has affirmed that made-in-Vietnam motorbikes can be exported to South
Asian, Russia and Africa. It has even advised Vietnam to prioritize the
development of the motorbike industry instead of the automobile industry.

Vietnam is located in the region where the demand for motorbikes is the highest
all over the world. It is estimated that 43 million motorbikes are consumed
every year. Of this, 10 million are consumed in China, 5 million in India, 5
million in Indonesia.

With the high demand, Vietnam can export 500,000 motorbikes and motorbike parts
a year. The exports would be even higher if Vietnam reaches to the Latin America
and Africa.

It’ll be not easy to earn money

However, manufacturers have been warned that it’ll be not easy to export
products. The motorbike consumption growth in the world has slowed down to 5
percent per annum. Asia remains the biggest production base which churns out
35-40 million per annum. However, Japanese and Chinese have been pushing up
their outward investments, planning to set up factories in any places there are
the markets.

Vietnam made motorbikes are believed to have high quality, but they don’t have
outstanding features. It has been suggested to develop fuel saving motorbikes or
the products that use clean fuel. However, in order to do that, Vietnam would
have to make heavy investment in the research and development.

At present, only Honda and Piaggio have RD centers in Vietnam. However, the
latter’s center just has the function of surveying the market and collecting
consumers’ opinion. Meanwhile, actual centers are still located in Japan and
Thailand.

Tran Thuy

By vivian