Slow Tet sales, a sign of a miserable 2014 for motorbikes

The motorbike market in 2014 will continue to be difficult with low output and fierce competition, according to motorbike manufacturers in Vietnam.

Only use half capacity

According to the assessment, the market in 2014 only reached 2.8 million vehicles, equivalent to 2013. The reason is said to be the difficult economy, people tightened spending. In 2014, the macro-economic indicators were not bright, so the motorbike market will certainly still be difficult, said Mr. Masayuki Igarashi, General Director of Honda Vietnam Company.

The motorcycle market is fiercely competitive.

Honda Vietnam said that it is expected to produce and sell only 1.8-1.9 million vehicles in 2014, equal to 2013. With the above output, the company's two factories in Vinh Phuc with a capacity of 2 million vehicles/year will not be fully operational. However, Honda still decided to put the third factory in Ha Nam into operation, starting from March 2014 to produce components, then from the third quarter it will produce motorbikes. The motorbike output of the factory in Ha Nam is expected to be only 10,000-15,000 vehicles by the end of the year.

Also according to Mr. Kiyokazu Sasabe, in 2013, due to a sharp decrease in motorbike consumption, 2 factories in Vinh Phuc had to cut 500 workers.

Not only Honda Vietnam Company, but also a series of component suppliers for this enterprise are also predicted to face difficulties due to the chain effect. In the industrial park in Dong Van (Ha Nam), there are about 5 factories producing motorcycle components, invested by suppliers following the 3rd Honda factory, now facing difficulties.

Some of these factories had to borrow investment capital when interest rates were still very high in 2010 and now it is difficult to recover the capital according to the original plan. Not only that, a series of other suppliers of Honda Vietnam have also invested in increasing capacity to meet the demand of the third Honda factory, but for more than a year now this factory has not been put into production, in the coming time only production will be limited, also causing difficulties for a series of suppliers.

Previously, a series of foreign-invested motorcycle companies have stepped up investment to increase motorcycle production capacity. Honda Vietnam currently has 3 factories with a capacity of 2.5 million vehicles/year, Yamaha Vietnam has 2 factories with a capacity of 1.5 million vehicles/year, SYM has 3 factories with a capacity of 500,000 vehicles/year, Suzuki has 2 factories with a capacity of 300,000 vehicles/year and Piaggio has 2 factories with a capacity of 300,000 vehicles/year. Just counting these 5 manufacturers, the capacity has exceeded 5 million vehicles, not to mention other companies such as Kimco, or companies with 100% domestic capital.

Currently, motorcycle capacity is over 50%, in which, many enterprises have surplus many times larger than output such as Suzuki, SYM, Piaggio Vietnam. Along with that, many of their component suppliers are similar to those of Honda Vietnam and are facing difficulties because they have invested in expanding production accordingly.

Motorcycle tycoons drown each other

According to Mr. Masayuki Igarashi, the difficult economy also makes the Vietnamese currency more stable and creates an advantage in exports. In the coming time, enterprises will certainly promote motorbike exports to open new directions and turn Vietnam into a global motorbike production center in Asia.

However, exporting is not considered easy, because the big motorcycle companies themselves always set the goal that wherever there is a big market, there will be production. Big markets such as India, China, Indonesia... have all become big motorcycle production centers and are also oriented towards export.

Still continuously releasing new car models.

Furthermore, according to Mr. Masayuki Igarashi, it is impossible to produce models in Vietnam only for export. To be able to export, one must have a good domestic market share, so the domestic motorbike market is still the most important for businesses and competition will become increasingly fierce.

Just over 10 days into 2014, Honda Vietnam has launched a new model, the 2014 version of PCX. Honda said it plans to launch a new model every month in 2014 with upgrades and new designs to compete, attract customers, maintain market share and aim for export.

Yamaha Vietnam has launched 5 models for 2014 since mid-December 2013, namely Nouvo SX, Nouvo GP, Exciter GP, Nozza European version and Jupiter Fi with improvements in design and technology. Piaggio, in November 2013, also launched the completely new Vespa Primavera and GTS Super duo, replacing the Vespa LX model. Suzuki Vietnam continues to renew the Hayate product line with Hayate SS and Hayate SS FI, Viva 115, Axelo 125 and especially launched the new Raider 150cc manual clutch model.

These businesses also said that in 2014 they will launch many new car models to compete and will not sit still.

Not only continuously launching many new car models, but also the marketing plan has been built with the purpose of fiercely competing for market share in the context of declining consumption. Promotional programs, discounts, gifts, customer care... worth billions of VND each will be launched continuously in 2014 and of course aimed at consumers' wallets.

According to vietnamnet