However, motorbike sales have been declining and manufacturers need to be nimble in order to respond to new demands, according to industry insiders.

The Vietnam Association of Motorcycle Manufacturers (VAMM), which includes major brands like Honda, Yamaha, Suzuki, Piaggio and SYM, dominates the market.

Motorcycle sales in Vietnam peaked at 3.25 million vehicles in 2019, but declined to 2.71 million in 2020 due to the COVID-19 pandemic. Last year, the decline in VAMM's motorbike sales had slowed, but only reached 2.51 million vehicles, about 16% lower than the previous year.

Motorbike sales volumes in the first quarter of 2024 reached 603,745 units, down 4.88% from the previous quarter and 11.5% lower compared to Q1/2023. This sales level is equivalent to around 15 years ago, indicating a prolonged gloomy period for the industry.

All major segments, including scooters and manual motorcycles, saw significant declines, with the under 50cc category decreasing by 28.4%. Market leader Honda, despite gaining slight market share (now 82.5%), still saw a 23.1% drop in April 2024 sales compared to the same period last year, at 160,009 units.

Second placed Yamaha also recorded a decrease in sales of 25-30% in the first months of 2024 compared to the previous year's.

According to VAMM experts, the domestic motorbike market has reached a point of saturation.

People are now more cautious with their spending and a limited introduction of new motorbike models makes it challenging to attract younger customers.

Convenient and affordable ride-hailing options are reducing the need for personal vehicle ownership and the comparatively lower costs of entry-level cars are making them an attractive option.

Additionally, consumers are increasingly opting for electric two-wheeled vehicles over traditional motorbikes. This combination of market saturation, changes in consumer preferences, technological advancements and pricing dynamics appears to be driving the decrease in motorbike consumption.

A boom in e-motorcycles

According to Motorcycles Data, VinFast and Yadea are the leading two brands of electric motorbikes in Vietnam.

Last year, VinFast's electric two-wheeled vehicle sales accounted for around 3% of the total market. In the first quarter of 2024, VinFast delivered 6,632 electric motorbikes.

Electric versions are attractive to customers in Vietnam due to their youthful designs, higher standard specifications and improved batteries, allowing rapid charging and a longer travel range.

For traditional motorbikes under 50cc, there are very few options available, while in the same price range, the variety of electric vehicles is much richer. Most electric vehicles with a capacity less than 2kW do not require a driver's licence, making them more popular among young people and students.

According to a survey from media company Vero, the rate of online searches for electric motorbikes in Vietnam continues to increase rapidly each year, indicating strong potential demand.

Although the overall two-wheeled vehicle market in Vietnam is under pressure, it is still expected to reach a value of 5.93 billion USD by the end of 2024 (according to the research firm Statista).

This growth potential is driven by Vietnam's rapidly expanding economy and the desire to reduce urban emissions. As consumption trends are forecast to change significantly and rapidly, businesses in the electric two-wheeler space will need to adapt quickly to these new market dynamics in order to succeed./. VNA