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.

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.

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 R&D 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