Motorcycle makers running out of gas in face of increased competition

The Vietnam Association of Motorcycle Manufacturers (VAMM) reported gloomy figures for the last months of 2019, a time when the industry typically expects a boom in sales revenue.

Motorcycle makers running out of gas in face of increased competition
A Honda shop in Hanoi

Instead,VAMM members, comprising Honda, Yamaha, Suzuki, Piaggio and SYM, sold just over227,000 units in October and 230,000 units in November, a drop of 6.5 percentand 2.2 percent, respectively, compared to the same periods in 2018.

Businesshas been poor during the first three quarters of 2019 as VAMM members struggledto boost sales, according to the association. A report by VAMM said sales byits members dropped 6.13 percent in Q1, 4.39 percent in Q2 and 3.8 percent inQ3 compared to the previous year.

Total sales for 2019 by VAMM members were estimated at around 3.2 million unitscompared to nearly 3.4 million units sold in 2018. Of which, Honda, thecountry’s largest motorcycle manufacturer, alone sold 2.6 million units, followed by another Japanese brand Yamaha,which sold over 400,000 units.

Industryexperts have long forecast the decline of the motorcycle industry. AsVietnamese families’ income increases, more and more consumers have beenswitching to buying cars. In addition, a rise in demand for electric bikes andthe nation’s direction to reduce the number of motorcycles, especially in largecities, have all contributed to a sharp fall in demand for motorcycles.

2019saw a rise in the popularity of electric motorcycles, with major brandsincluding Vietnamese Vinfast consolidating their hold on the domestic marketwith aggressive sales promotions including heavy discounts and offering freecharging for their vehicles.

 

Vinfast,a subsidiary of VinGroup, have sold thousands of Klara e-motorcycles sincetheir debut in late 2018. The electric vehicles have proven to be popular amongcity dwellers, especially young students, for their lightweight and moderndesign. As of now, owners of e-motorcycles are not required to hold a drivinglicence, which counts as another advantage for e-motorcycle makers over theirtraditional counterparts.

Foreigne-motorcycle firms also wasted no time entering the fray with Republic of Korea’s brand Mbigo rolling out several models withprices ranging from 1,700 USD to 2,600 USD. Chinese brand YADEA joined the market inOctober 2019 with their latest offering the YADEA G5, priced at 1,700 USD. The firm also opened a factory in thenorthern province of Bac Giang.

Salesof combustion engine motorcycles will likely continue to fall to just under 2.5million units by 2024, according to industry experts, as competition frome-motorcycles is set to further intensify in the years to come./. VNA

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