Scooters are declining, motorcycles will take the throne in Vietnam

With the A2 license now open, more and more motorcycle companies are entering Vietnam, and the development prospect for a motorcycle market worth around 100 million is about to begin.

Never before have Vietnamese motorcyclists had the opportunity to legally own and operate motorbikes over 175cc as easily as now. By issuing Circular No. 38/2013 abolishing the restriction on A2 licenses, the Ministry of Transport has opened the door for consumers and motorbike businesses.

The A2 license restriction is the direct cause, but more deeply, according to market experts as well as those who have been in the import business for many years, the Vietnamese two-wheeled vehicle industry is undergoing subtle changes, a premise for the development of a new market, the motorcycle market.

A2 license is a limitation that prevents 250cc vehicles from reaching players.

Comparing Vietnam with other countries with high demand for motorbikes such as India, Thailand, Indonesia, the product categories have quite clear distinctions. The Vietnamese motorbike industry has developed for about 15 years, during which time the underbone line has been the stage, with a few imported motorbikes added to serve a small number of passionate and financially ready players. Meanwhile, in other markets, sportbikes and small nakedbikes are the segments that bring many benefits to manufacturers.

But based on actual figures, experts show that the Vietnamese popular motorbike market is about to reach saturation. The evidence is that the current consumption of motorbikes is about 2.47 people/vehicle, of which the Thai market is 2.9 people/vehicle, which is considered saturated. The trend of the two-wheeled market in the Land of Golden Pagodas is gradually shifting to large-displacement motorbikes, thanks to the government's policies to expand production and circulation.

According to calculations by the Ministry of Industry and Trade, in just a few years the number of motorbikes in Vietnam could reach 2.97 per person, surpassing the current number in Thailand. "The market for scooters and manual transmission motorbikes is about to decline, so the shift to using motorbikes is inevitable," said a strategic expert in the Vietnamese motorbike industry.

The seeds of using motorcycles originated long ago with the legends of manual transmission motorbikes. Since Yamaha released the manual transmission version of Exciter, imported 150cc motorbikes have been increasingly used by many people, and the domestic market has gradually changed. Business people are considering bringing in more models, most of which are still in the segment around 100 million VND.

Mr. Hoai Nam, a long-time importer of motorbikes, commented that even though next year all barriers have been removed and consumers will have an easier time owning motorbikes, the booming segment will still be stuck at 100 million VND, because anything higher is out of reach for the majority of customers.

600 or 1,000cc motorcycles currently only serve a small number of customers, because the economy is still a big problem. Only those who are willing to spend an amount of money equal to a car to own a motorcycle for personal benefit.

"If companies do enter the market, they will start with small cars priced around 100 million," said Mr. Nam.

Honda CBR150R, Yamaha R15, FZ16 are models with quite good sales. At showrooms, many customers who come to see the car like CBR250R more than CBR150R but decide to buy CBR150R, the reason is because the price gap is quite large, 100 million compared to 160 million is a problem. But there are also many people who can buy a 250cc but are limited by A2 license, this group of customers will be the premise to move up to higher segments next year when the A2 license restriction is removed.

There are three main reasons why car manufacturers have not yet brought motorcycles to Vietnam for distribution: A2 license restriction, high prices, and traffic conditions. However, these problems have gradually been overcome, vehicle prices are on the decline due to production in Asia, better road conditions, and finally the A2 license will officially be removed from next year.

The newly launched Yamaha R25 is aimed at the Asian market.

In the new market development trend, Honda with the advantage of a nationwide retail network and methodical marketing is considered to have a better market penetration advantage. Yamaha is gradually losing ground to its formidable competitor Honda (60% market share), so the race will be parallel if this company does not want to be left further behind by its competitor. Suzuki in its steps to redevelop the market has completely shifted to the manual transmission segment with the EN 150-A, Axelo, most recently this company is preparing to launch the GSX-R 150cc version for Asia.

The Asian market and the small segment are the target of all car manufacturers in the world. The owners of BMW, Ducati or Triumph all believe that Europe or America are no longer the gold mine for motorcycles, but the emerging Asian market. The proof is that the manufacturers have all released small products such as Triumph 250, KTM Duke or RC 125, 200.

Most recently, Honda released CBR300 to replace CBR250, Yamaha released R25, the battle with Kawasaki Ninja 300 became more attractive. When A2 was loosened, more and more brands appeared in the Vietnamese market. Piaggio also did not sit still but prepared for the plan to bring the Aprilia sub-brand to Vietnam to join the battle, the most popular model is Aprilia RS125.

"Players like 250cc but can only afford 150cc," Mr. Nam affirmed about the average level of motorcycle buyers in Vietnam. The problem for manufacturers is perhaps to find a way to reduce the price of small A2 models, bringing them back to a familiar price, around 100 million VND.

To do this, it is possible that in the near future small-sized motorbikes will be assembled and distributed in Vietnam, something that companies have been doing for many years in neighboring Asian markets.

According to vnexrpess