A Honda Vietnam factory in the northern province of Vinh Phuc. (Photo: VNA) Currently, there are more than 70 million registered motorcyclesin the Southeast Asian country with the figure projected to grow even larger inthe future. In the first four months of 2023 alone, the country produced morethan 1 million new motorcycles.
Five major manufacturers: Honda, Yamaha, Suzuki, Piaggio, and SYMhold over 90% of the market share in Vietnam, manufacturers also exportfully assembled models to international markets.
VAMM said the stage has been set for Vietnam to become anattractive destination for motorcycle manufacturers in the Asia-Pacific region.
Due to supply chain difficulties and rising trade tension betweenthe US and China, manufacturers have been shifting their investments to smallermarkets in Asia to minimise risks. For example, the Japanese government hasallocated a 2.2 billion USD fund in support of Japanese businesses relocatingfrom China while the US government has been calling for US businesses to eitherreturn to the US or relocate to another country.
Against this backdrop, Vietnam has emerged as a promising newdestination for many motorcycle manufacturers.
Honda Vietnam currently owns and operates three factories in thecountry with a production capacity of 2.5 million motorcycles a year. YamahaMotor Vietnam owns and operates two factories. Piaggio Vietnam owns andoperates two factories with a production capacity of 250,000-400,000motorcycles a year.
However, the market is not without its challenges.
Vietnam's motorcycle market in recent years has shown signs ofsaturation. While annual motorcycle production continued to rise, demand andpurchasing power have largely failed to keep up. This has forced manufacturersto start investing more in product diversification, particularly in the premiumsegment, as well as seeking ways to boost exports of fully assembled models,and spare parts to international markets.
For instance, Yamaha Motor Vietnam has been exporting models tosupplement the Indonesian market since 2019. Last year, the company became thefirst foreign factory to produce and export the NEO'S electric motorcycle toEuropean markets.
In May this year, Yamaha Motor Vietnam officially inaugurated itsfourth assembly line, specifically for engine assembly for exports. This movedemonstrated the Japanese company's confidence and commitment to Vietnam.
According to the company, the new line will produce engines forexport to Thailand during Phase 1 with a localisation rate of up to 95%. Overthe next three years, the company is to expand its exports to other marketsincluding the Philippines, Indonesia, and Malaysia, with an expected exportvolume of around 200,000 units.
Similarly, Honda Vietnam has been pushing the export of fully assembledmodels and spare parts. Last year, the company exported 207,000 motorcycleswith a total export turnover of over 462 million USD, a 25% increase in revenueover 2021, according to VAMM. The company said this year it has set a target toexport nearly a quarter of a million models or a 9% increase over 2022.
According to industry experts, in order to maintain growth in theVietnamese market companies must start investing in the development of newproduct lines to cater to customers' evolving preferences.
New trends include prioritising energy-efficient models, compactdesign and hassle-free operation.
According to MotorCycles Data, a website specialised in themotorcycles market data and forecast, Vietnam's electric bike segment has maintaineda steady growth rate at 5.6% during the first quarter of 2023 in comparison toa contracted internal combustion segment./.
VNA
