Vietnam. Losing 4.6% October confirms the 2019 negative trend

Vietnam Motorcycles Market has lost in October 4.6% again confirming the moderately negative 2019 trend. While on top of the list Honda is stable all others top player have lost, with Yamaha down an impressive 24.7%. The new electric vehicles local producer, VinFast, was very well welcomed by the market.

 

Economic Environment

Vietnam economy performed better than expected in the third quarter according to recent data, with both the industrial and services sectors picking up speed. Double-digit manufacturing growth boosted industry, while a surge in visitor arrivals, a healthy labor market and mild price pressures propelled the services sector. Moreover, exports were also up markedly year-on-year despite flagging global growth and, in the year to September, the value of new FDI projects rose 22% year-on-year, likely supported by trade diversion thanks to the U.S.-China trade spat.

The economy should be one of ASEAN’s strongest performers next year, even though our panelists see growth dipping slightly from 2019. Strong expansions in industrial production, exports and private consumption should support momentum. Trade tensions, and fragilities within the domestic banking sector pose risks to the outlook, however.

 

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 and is keeping the negative shape.

Indeed, according to data reported by the MInister of Transportations, the start of the year was negative, with Q1 757.140 sales, down 6.2%. In the Q2 the trend improved marginally and the first half ended with 1.491.332 sales, down 5.3%.

The mood unchanged in the third quarter when sales declined 4.4%.

In October market lost 6.1% again with  with year to date figures at 2.641.000 units, down 4.8%.

After a shy start of the year, the market leader Honda has almost recovered all the sales lost in the first part of the year and after 10 months sales was down a mere 0.3% with 78.6% of market share or 2.06 million sales.

Meantime, the top challenger Yamaha, has lost 22.5% 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, with sales up 4.5% followed by Piaggio (down 2.2%) and Suzuki (-3.4%). 

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.

Vietnam Motorcycles
Vinfast Klara

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.

 

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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