Vietnam May. The market is recovering while Yamaha is down over 20% despite new models launch

Vietnam Motorcycles

Vietnam Motorcycles Market moderately positive in May 2019 with year to date figures down 3.7%, confirming the Q2 recovery after the shy Q1 with the entire 2019 potentially again at record level, following four years of stable growth. While on top of the list Honda is stable all others top player have lost, with Yamaha down 20%.

 

Economic Environment

Vietnam economy appeared to perform well at the outset of the second quarter. In April, the manufacturing PMI increased on a recovery in employment, while industrial production growth rose. Moreover, exports expanded robustly year-on-year in the same month, despite external trade headwinds, and retail sales surged, likely supported by mild price pressures. In the first four months of the year, FDI was up markedly, potentially driven in part by firms diverting production away from China amid the prolonged U.S.-China trade dispute.

The outlook for 2019 remains favorable. Household spending will remain brisk amid modest inflation and rising incomes, while stronger tourism, FDI, exports and industrial output should continue to power growth. The possibility of a larger-than-expected Chinese or global slowdown pose downside risks.

 

Motorcycles Market

Vietnamese two-wheeler industry is the fourth largest in the World, dominated by the five main local producers, Honda, Yamaha, Suzuki, SYM and Piaggio, which hold over 97% of the total market (our figures include both local produced and imported vehicles).

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%.

In April sales have been 269.789, -0.7% from the correspondent month last year and in May 258.185 (+1.2%) with year to date figures at 1.275.276 (-3.7%).

After a shy start of the year, the market leader Honda recovered 5.8% in April and 3.7% in May and the year to date figures are up 1.4% while the main challenger, Yamaha, has lost so far 23.9% from the correspondent period last year. Yamaha has just launched two new models in the market aiming to recovery, but we need to wait for next months to see the effect.

In third place there is SYM, down 7.2% followed by Piaggio, down 22% and Suzuki, down 0.6%.

Among imported brands, Benelli shines, while the new brand, Vinfast, an e-vehicles local maker, launched the first scooter, the Klara, with huge interest and early success.

 

Market Heritage

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.

 

Pollution

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.

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