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Vietnam to become the world’s motorbike production base

2013-09-10 12:17:34

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About 3 million motorbikes are consumed in Vietnam every year. Meanwhile, the five big motorbike joint ventures alone churn out 4 million products a year. The oversupply would force the manufacturers to boost exports and turn Vietnam into the world’s motorbike production base.

 

 

Honda motorbikes exported to Japan

 

The website of the Japanese motorbike manufacturer in late August showed a piece of news that SH Mode made by Honda Vietnam would be available in Japan from September 13. This would be the second motorbike model of Honda Vietnam to be sold in Japan in 2013.

 

It is expected that some 3,000 SH Modes would be consumed in the market every year.

 

Prior to that, in March 2013, when launching Lead 125 into the market, Honda Vietnam also stated that it would export the products to Japan, where it hoped to sell 12,000 products every year.

 

As such, Honda Vietnam has become the fourth country that provides products to Honda global. The other three include China, Thailand and India.

Masayuki Igarashi, General Director of Honda Vietnam, said the company plans to boost exports to Thailand, Malaysia, the Philippines, Laos, Cambodia, Pakistan and Italia. It earns $40 million a year from the exports to the regional markets with just two models Dream and Wave.SYM, the manufacturer from Taiwan, has also been trying to exploit the ASEAN market. It has been exporting 4,000 products a month to South East Asian markets such as Malaysia, the Philippines, Singapore, Indonesia, Myanmar, Laos and Cambodia.

 

Meanwhile, Piaggio Vietnam exports 30,000 products to the ASEAN market every year. Piaggio Vietnam’s Tran Thu Mai noted that the Asian market now sees the fastest growth rate in the world. The manufacturer strives to export Euro70 million worth of motorbikes and motorbike parts in 2012-2014.

 

Export or die

 

The motorbike consumption over the last two years has been decreasing dramatically in the context of the economic downturn. Motorbike manufacturers all said 2012 was a very tough year for them.

 

According to Masayuki Igarashi of Honda Vietnam, the manufacturer sold 3.11 million products in 2012, which was just equal to 93 percent of that in 2011. Especially, Honda Vietnam had to spend VND15 billion on a sale promotion program, a biggest ever sum spent for such a program.

 

However, despite the big difficulties, motorbike manufacturers still keep expanding their production. The third factory of Honda Vietnam capitalized at $120 million in Ha Nam is expected to become operational by the end of the year, which would raise the total production capacity of the manufacturer to 2.5 million products per annum.

 

The Yamaha project, worth $50 million, is raising the production capacity to 1.5 million products per annum.

 

Analysts believe that the manufacturers’ move to scale up the production aims to serve their plan to boost export instead of boosting domestic sales. The total production capacity of the joint ventures in Vietnam is expected to reach 3 million products a year by the end of the year, or 2 million products higher than the demand.

 

They have also predicted that with such a big capacity, Vietnam would become the world’s motorbike production base in 5 or 10 years.