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Foreign motorbike makers expand in lucrative market
Growing interest in motorbikes has become a lucrative opportunity for big motorbike companies in Viet Nam and to meet the growing demand, some manufacturers have decided to invest in expanding local production.
Koji Onishi, General Director of Honda Viet Nam (HVN), said that last year, five foreign-invested companies, including HVN, Yamaha Viet Nam, Suzuki Viet Nam, Piaggio and SYM Viet Nam, sold 2.7 million motorbikes. HVN alone sold 1.72 million of the units. The company's production capacity was up nearly 25 per cent against 2009, he said.
Meanwhile, SYM motorbike manufacturers from Taiwan sold 10,000 units on average each month.
In preparation for plant expansion, HVN is recruiting about 2,000 new workers, which would bring their total number of employees to about 8,000 with a production of 2 million units per year.
To meet domestic demand for motorbikes, Piaggio Viet Nam has also decided to expand its local investment in motorbike production.
Last week, Piaggio Viet Nam broke ground to expand its second plant to increase production capacity from 100,000 vehicles to 300,000 per year by mid-2012. The new US$40 million plant would help raise Piaggio Group's total investment in Viet Nam to $70 million. The company also plans to boost its local manpower to 1,000 people in 2012.
Piaggio has already moved its headquarters from Singapore to Viet Nam with the aim of turning Viet Nam into a Piaggio control centre for the Asia-Pacific region.
Costantino Sambuy, general director of Piaggio Viet Nam, said that since the official launch of the plant in June 2009, Piaggio Viet Nam had been consistently effective and accomplished its stated objectives. Thanks to these positive results, the company planned to boost its activities in Viet Nam.
Although the two foreign investors are continuing to boost investment in motorcycle manufacturing, this does not mean the motorcycle market is growing well overall. In fact, data registration of new motorcycles in last few years has not changed significantly, only fluctuating by 2.7 to 2.8 million units.
Honda Viet Nam and Piaggio Viet Nam are trying to further expand production and sales plans in Viet Nam while some foreign-invested companies are losing their market shares.
Ngo Van Tru, Deputy Director of the Department of Heavy Industry under the Ministry of Industry and Trade, said this problem was normal when motorbike companies did not make efforts to improve and launch new products to meet changing customer tastes.
For example, HVN first introduced their Air Blade model in 2007. The company continued to improve product design and 950,000 units have been sold so far.
This year, the company plans to produce about 30,000 Air Blades per month. When the second plant starts operation, this product could reach 40,000 units per month.
From the start of production in June 2009, Piaggio Viet Nam has sold out 87,000 units while also focusing on customer service and network expansion.
Despite economic difficulties, domestic motorbike demand has exceeded predictions. Domestic motorbike consumption is expected to reach 3 million units per year from 2011 to 2012.
According to the Ministry of Planning and Investment, Viet Nam is home to more than 60 motorbike producers; 50 are involved in direct production while the remainder are involved in assembly.
Viet Nam has become the fourth largest motorbike market in the region after China, India and Indonesia.
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