Near Tet, selling motorbikes makes a lot of money

By increasing prices from several hundred to even more than 10 million VND, motorbike dealers can pocket hundreds of millions to billions of VND each month...

Price increase of tens of millions

The motorbike market in the days leading up to Lunar New Year is not very exciting, however, dealers still raise the prices of many popular models higher than the prices announced by the manufacturers.

A survey at a number of authorized dealers and stores of popular motorbike brands such as Honda and Yamaha in Hanoi shows that many models have increased in price.

All Honda Vietnam scooter models, except PCX, have increased in price from 3-12 million VND. The lowest is the new Vision model with a price difference of 3 million VND/vehicle.

Other popular models such as the latest Air Blade 125cc have a price difference of 3-5 million VND/vehicle, SH mode has a price difference of 5-7 million VND/vehicle, especially the new SH 125 and 150 has a price difference of 9-12 million VND/vehicle...

For manual transmission vehicles, there are a few models with slight discounts from 500,000 to 1 million VND such as Blade, Wave RSX... the rest are sold at the announced price.

Motorcycle prices skyrocket at the end of the year

Yamaha Vietnam also has two popular models, Nouvo and Exciter, with increased prices. Nouvo's listed price is from 34-36.4 million VND, while the price at the dealer is from 37-39.5 million VND. In addition, the manual transmission motorbike line is very popular with young Vietnamese people, Exciter has a published price of 45-46 million VND, but at the dealer the selling price is from 56-57 million VND.

At the dealerships, the sales staff's answers were identical, as if they had memorized the lesson: that is, near Tet, purchasing power is higher than usual, while there are not many goods arriving so prices increase.

However, motorcycle dealers know the real reason. Since 2015, some motorcycle companies have decided to produce below demand, not prioritizing sales as before, so they proactively reduced production, causing many models to have limited supply.

Along with that, the situation is that although consumers keep complaining, they are still willing to spend a large amount of money, regardless of the high price difference, to own a vehicle, so it is easy to be manipulated. This also explains the question, why the motorbike market is saturated, demand is not high, but the price of the vehicle is always unreasonably increased.

Still making big profits even though it's unsaleable

While motorbike dealers of brands like SYM, Suzuki... are still struggling, on the contrary, authorized stores of Honda Vietnam in the city are making big profits.

These stores have seen their profits increase since the beginning of 2015. Some sources say that currently, Honda Vietnam authorized motorcycle stores in Hanoi can "pocket" about 300 million VND/month, even though the number of vehicles sold is less than before.

Just looking at the selling price of the car, you can calculate how much profit they are making. Currently, all Honda Vietnam scooters are sold at a price 3-12 million VND higher than the published price.

Thus, a store only needs to sell 100 Honda scooters per month with a price difference compared to the published price, an average of 4 million VND, to earn 400 million VND. Plus each scooter sold also receives a profit from the engine manufacturer of about 2 million VND, so the number of scooters alone, the stores can earn 600 million VND/month.

Besides that, there are manual cars. As mentioned, most manual cars are currently sold at the published price. Just by selling at the right price, each car can enjoy a profit of about 1 million VND from the manufacturer.

With the sales of 100 vehicles/month, the revenue is also 100 million VND. Not to mention, each new motorbike is usually warranted for 2 years, the warranty cost will be paid by the manufacturer to the authorized stores based on the number of vehicles.

According to data from Honda Vietnam Company, the production of motorbikes in 2015 reached about 2 million units, of which 50% were scooters. Honda also has about 700 authorized stores nationwide. Thus, on average, 1 store sells nearly 300 units per month.

In addition, there is another important source of income from after-sales service. The number of motorbikes in circulation is large, which means the demand for spare parts for maintenance and repair is increasing. More and more customers have the habit of bringing their vehicles to authorized dealers for repair and replacement of spare parts, even from changing a bottle of engine oil. Information shows that, just selling spare parts, the minimum profit is also about 25%.

Calculating all these sources of income, it can be up to 1 billion VND/month. After deducting business expenses such as location rent, warehouse, employee salaries... the profit is not less than 300 million VND/month. Currently, Honda Vietnam accounts for 70% of the motorbike market share in the country, so it can be said that the profits flowing into the pockets of business people are increasingly more, while just selling and providing motorbike services is not too hard.

According to VnMedia