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Vietnam: Cars become more popular as motorbike sales stagnate
Despite great efforts by manufacturers, the motorbike market has been declining from the peak of 3.38 million sold in 2018 to 2.5 million in 2021. There will not be any considerable growth in the next decade, experts say.
The Vietnam Association of Motorbike Manufacturers (VAMM) reported that its five member companies, including Honda, Yamaha, Suzuki, Piaggio and SYM, sold 2,493,372 products in 2021, a decrease of 8.1 percent (220,243) compared with 2020.
Of this, Honda Vietnam sold 1,992,365 products, just 93 percent of 2020, Yamaha Vietnam 425,294 cars, or 90 percent of 2020, and SYM, 27.084 (61.4 percent), Suzuki, 21,332 (85.3 percent) and Piaggio, 24,946 (88.3 percent).
The sales of VAMM’s five manufacturers account for 95 percent of market share. The 100 percent wholly Vietnamese enterprises that import products for domestic sale and assemble motorbikes in Vietnam account for an insignificant market share.
According to Abeam Consulting, with improved financial capability, Vietnamese can now buy more expensive vehicles, such as cars instead of motorbikes. The improvement in infrastructure has also affected people’s decisions to buy motorbikes.
Small cars priced at VND600 million or lower are the choice of many people. This market segment recorded the largest sales in Vietnam. While the motorbike market has been declining since 2018, the automobile market has been witnessing high demand, despite Covid-19.
In the last 10 years, asphalt roads in Vietnam have increased from 64.4 percent to 84 percent of all roads. In rural areas, the figure rose from 37.9 percent to 69 percent. The total highway length increased to 1,163 kilometers as of 2020, helping connect large cities and encouraging the use of cars.
In 2010, the ratio of motorbikes to cars registered in Vietnam was 55.9 to one, while the figure dropped to 26.7 to one in 2020. Despite the great efforts by motorbike manufacturers to launch new versions and offer attractive preferences, purchases declined, according to ABeam Consulting.
Another reason is the transformation within the motorbike manufacturing and trading industry, especially products using an internal combustion engine. The strong rise of electric motorbikes is also a threat to motorbikes using internal combustion engines.
The news that large cities are considering plans to prohibit motorbikes in the near future from inner cities also leads to hesitation about motorbikes.
ABeam Consulting believes that the motorbike market is entering a period of saturation as the number of cars is on rapid rise. The market won’t see considerable growth in the next decade.
New approach
Motorbike manufacturers said they are adapting to the new circumstances and following a new approach – making high-end original products and targeting niche markets. As people’s income has increased, the demand for expensive and original products will also rise.
In 2021, Honda Vietnam marketed new high-end products, such as Honda SH350i, priced at VND146 million, Honda Africa Twin at VND590-690 million, Honda Gold Wing at VND1.23 billion and a new version of Super Cub C125 at VND88 million.
Piaggio Vietnam has also renewed its range of products by launching the special version Piaggio Liberty S 2021 with the selling price of VND61.9 million. It has also introduced the special versions of Vespa Primavera 75th 125cc and Vespa GTS 75th 300cc with retail prices of VND112 million and VND179 million, respectively. From 2022, Piaggio Vietnam will begin distributing two Italian brands – Aprilia and Moto Guzzi.
Nguyen Minh Dong, a vehicle expert, said young people like to express their own style and create trends, so the demand for motorbikes that are “not for the masses” is increasing. Color plays a very important role in young people’s decisions to buy.
Tran Thuy
Source: https://vietnamnet.vn/en/feature/cars-become-more-popular-as-motorbike-sales-stagnate-813105.html