Vietnam Motorcycles Market felt down 6% in the first quarter 2019, following four years of stable growth. While on top of the list Honda was stable all others top player have lost, with Yamaha down 20%. Benelli shines among importers while the new e-scooter Vinfast Klara achieved early success.
Vietnam economy lost some ground in the first quarter of the year, weighed on by slower growth across all sectors. Most notable was the slowdown in service sector activity, which was likely hindered by fewer tourist arrivals in the quarter, while the agricultural sector also weakened. Moreover, merchandise export growth dipped in Q1, partly due to falling smartphone shipments. On a brighter note, the industrial sector held up well, while FDI remained robust, with newly established businesses increasing at the fastest rate in five years.
The 2019 Outlook remains favorable. Household spending will remain brisk amid stable inflation and rising incomes, while sustained tourism should support the service sector. Moreover, industrial output, FDI and exports should continue to power growth.
Vietnamese two-wheeler industry is the fourth largest in the World, dominated by the five main local producers, Honda, Yamaha, Suzuki, SYM and Piaggio.
Following the stable growth reported in the last four years, the market started the 2019 in low tone. Indeed, according to data reported by the MInister of Transportations, the start of the year was not bad, with January sales at 354.223 units (local and imported) up 4.1%, but already in February the mood changed and the 195.878 sales were down 8.7% from the correspondent month last year. In March the data was really disappointing, with only 207.039 sales, down 17.9%, ending the first quarter with 757.140 sales, down 6.2%.
While the market leader, Honda was stable (-1%) the main challenger Yamaha has lost 20.3%, followed by Piaggio, down 9.0% and SYM, down 16%. Among imported models, Benelli shines, while the new brand, Vinfast, an e-vehicles local maker, launched the first scooter, the Klara, with huge interest and early success.
In no other economic and industrial sector Vietnam has achieved the relevance actually owned in the 2-Wheeler global industry.
Indeed, while the country is fast growing in several industries and gaining steps within the ASEAN region, in the motorcycles sector the market represents the 4th bigger market in the World, with over 3 million vehicles sold each year and manufacturer cluster involving Top Manufacturers, like the Japanese Honda, Suzuki and Yamaha, the Taiwanese SYM and the Italian Piaggio. They produce over 3 million units per year, mainly for the domestic market.
In the 2018 the market hit the best sales level in the last 8 years, while the all time record, hit in the 2011 at 4.4 million units stands untouchable.
In the 2018 the market scored the 4th increase a row, with 3.38 million sales (including both local producers and import) and was behind just to India, China and Indonesia, with a gap of near 1.4 million toward the first follower, The Philippines.
The outlook for the 2019 is still positive, considering the local economy will keep the momentum and our experts foresee a growth between 3 and 5 percent.
Almost 99% of sales are represented by local produced vehicles.
The market is dominated by the Japanese Honda which in the 2018 hit the record of 1.56 million sales (+9.5%) with 75.6% of market share.
In second place Yamaha, which has lost for the second year in a row ending at 702.508 sales (-13.9%) far from their record hit in the 2012, at 909.000 units.
In third place SYM with 57.243 sales (+2.6%).
Several brands are represented in the market, including Piaggio (producing here), Suzuki, Kymco, Kawasaki, Benelli BMW, KTM (since 2016), Ducati, Harley Davidson, Triumph, Royal Enfield and Bajaj Auto.
In Vietnam, motorbikes are the main means of transportation of big cities. Motorcycles are currently responsible for about 80% of travel needs in the city. Previously, two big cities, Hanoi and Ho Chi Minh City, proposed a scheme to ban motorbikes from the inner city to reduce traffic congestion.
In August 2017, Hanoi City issued Decision No. 5953 / QD-UBND approving the scheme “Strengthening the management of road transport means to reduce traffic congestion and environmental pollution in Thanh Hoa. Hanoi city, the period of 2017 – 2020 vision 2030 “. According to the approved project, Hanoi may limit and proceed to stop operating motorcycles in the districts in 2030.
Following Hanoi, in August 2018, Ho Chi Minh City also issued the project “Strengthening public transport in combination with controlling motor vehicles in Ho Chi Minh City”. Under this project, Ho Chi Minh City can restrict motorbikes in some central districts and proceed to ban motorbikes by 2030.