Vietnam. Honda at new record sales in a 2019 market down 3.7%

Vietnam Motorcycles Market has lost 3.7% in the 2019 despite the economic environment was quite positive. The market leader, Honda, established the new all time record sales, while the top challenger, Yamaha, lost near 20%. The new electric vehicles local produce 3.r, VinFast, was very well welcomed by the market.

 

Economic Environment

Vietnam economy likely lost some steam in the fourth quarter, following a stellar third quarter. Industrial production growth slowed sharply in November, while exports were subdued in October and November on weak shipments of coffee and phones. In addition, African swine fever continued to decimate pig herd numbers, which will have hurt the agricultural sector. However, economic momentum should have been healthy nonetheless, particularly compared to regional peers; tourist arrivals and retail sales surged in the first two months of Q4, boding well for the service sector.

In November, the government approved hiking the minimum wage by over 5% for 2020, which should support private consumption next year without seriously threatening the country’s status as an attractive base for low-cost manufacturing.

The economy is set to remain one of ASEAN’s top performers in 2020 thanks to healthy gains in industrial production, private consumption and exports. However, global trade tensions, possible U.S. tariffs in response to Vietnam’s soaring trade surplus and domestic banking fragilities pose risks to the outlook.

 

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 second half and the full year ended with a moderate lost.

Indeed, total two-wheeler sales in the 2019 have been 3.271.000 units, down 3.7% from the previous year.

Despite a weak first half, the market leader Honda has been able to slam a new all time sales record with 2.57 million sales (+0.2%) improving the gap over all others.

Meantime, the top challenger Yamaha, has lost 19.7% despite launched two new models aiming to recover.

In third place there is SYM, with sales up 5.2% followed by Piaggio (down 0.2%) and Suzuki (-1.1%). 

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, already selling thousand units.

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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