At the beginning of the year, motorbikes are the first to collect dust.

After the Lunar New Year, motorcycle shops, already experiencing a decline in customers, have become even more deserted. This could be a harbinger of a sluggish and unprofitable 2014 for the Vietnamese motorcycle market.

During the heyday of the motorcycle market, following the usual market trend of price gouging and chaotic sales leading up to Tet (Lunar New Year), it was no surprise that motorcycle shops became quieter after the holiday. Unfortunately, the Vietnamese motorcycle market has just experienced an unprecedentedly sluggish year. If even the year-end shopping season is slow, imagine the situation now.

Most motorcycle shops are experiencing a lack of customers in the first few days of the new year.

Walking through a series of streets and motorcycle shops in Hanoi, one can see that most are deserted. “Our shop opened for business on the 6th of the lunar month. But for the past two or three days, we’ve been opening in the morning and closing in the evening without a single customer coming in to inquire, let alone buy a motorcycle. We’re hoping for just one customer to make the first purchase, but we haven’t even seen one yet,” said a salesperson at a Yamaha motorcycle shop on Ton Duc Thang Street in Hanoi.

Mr. Dat, owner of a Honda motorcycle shop (located in Thanh Tri district), said: "Knowing that there wouldn't be many customers after Tet, my boss proactively gave employees from out of town an extended holiday until the 10th. Only two employees whose homes are near the shop came early to open the shop. But even those two had nothing to do because no one came to inquire."

Authorized motorcycle dealerships are deserted, and businesses selling imported motorcycles are even more sluggish. Walking along Hue Street and Ba Trieu Street – streets with many imported motorcycle shops – one can see the "downturn" of the market in the early days of the year. "We haven't sold a single motorcycle. Sitting in the shop just makes me feel more disheartened. My colleagues and I closed the shop to go to the New Year's ceremony. All we can do now is hope for a better year. If it's like last year, we might go bankrupt," said a salesperson at LH motorcycle shop.

A scene from the "afternoon market" of imported motorbike shops on Hue Street (Hanoi).

The lack of customers at motorcycle shops has become all too familiar to many recently. And it seems to herald another year of failure for motorcycle businesses in Vietnam.

Due to sluggish sales, many dealerships are at risk of closing down.

According to estimates, the 2014 market will only reach 2.8 million vehicles, equivalent to 2013. The reason is believed to be the difficult economic situation and people tightening their spending. With macroeconomic indicators not looking promising in 2014, the motorcycle market will certainly remain challenging. Motorcycle manufacturers facing difficulties will naturally see dealerships and stores closer to closure.

According to calculations by the owner of a Yamaha Vietnam motorcycle dealership (Hanoi), the average cost of renting premises for a medium-sized dealership is around 50-70 million VND, while for a large dealership it's around 90-150 million VND per month. Employee salaries also amount to approximately 50-100 million VND, or even more depending on the scale and number of employees. In addition, there are numerous other taxes and fees…

Based on this rough estimate, each first-tier dealer of Yamaha, Honda, or Suzuki needs to sell at least 100-150 vehicles per month. Larger dealers need to achieve sales of 300-500 vehicles and also perform well in warranty and maintenance services to avoid losses.

The quiet start to the year foreshadows another disappointing year for the motorcycle market.

However, the "gloomy scene" of dealerships in the early days of this year signals another sluggish year for the motorcycle market. The majority of stores have seen their monthly sales fall far below the "necessary and sufficient" conditions for business sustainability.

For this reason, many motorcycle shops and dealerships have had to transfer ownership or even close down. Many businesses couldn't survive, so the owners had to put them up for sale at prices ranging from 3 to 5 billion VND. Meanwhile, a few years ago, opening a motorcycle dealership cost at least tens of billions of VND.

Business experts predict that, given the current trading conditions, many more dealerships and stores will have to cease operations in 2014.

According to Vietnam.net