The Vietnam Association of Motorcycle Manufacturers (VAMM) reported gloomy figures for the last months of 2019, a time when the industry typically expects a boom in sales revenue.
Instead, VAMM members, comprising Honda, Yamaha, Suzuki, Piaggio and SYM, sold just over 227,000 units in October and 230,000 units in November, a drop of 6.5 percent and 2.2 percent, respectively, compared to the same periods in 2018.
Business has been poor during the first three quarters of 2019 as VAMM members struggled to boost sales, according to the association. A report by VAMM said sales by its members dropped 6.13 percent in Q1, 4.39 percent in Q2 and 3.8 percent in Q3 compared to the previous year.
Total sales for 2019 by VAMM members were estimated at around 3.2 million units compared to nearly 3.4 million units sold in 2018. Of which, Honda, the country’s largest motorcycle manufacturer, alone sold 2.6 million units, followed by another Japanese brand Yamaha, which sold over 400,000 units.
Industry experts have long forecast the decline of the motorcycle industry. As Vietnamese families’ income increases, more and more consumers have been switching to buying cars. In addition, a rise in demand for electric bikes and the nation’s direction to reduce the number of motorcycles, especially in large cities, have all contributed to a sharp fall in demand for motorcycles.
2019 saw a rise in the popularity of electric motorcycles, with major brands including Vietnamese Vinfast consolidating their hold on the domestic market with aggressive sales promotions including heavy discounts and offering free charging for their vehicles.
Vinfast, a subsidiary of VinGroup, have sold thousands of Klara e-motorcycles since their debut in late 2018. The electric vehicles have proven to be popular among city dwellers, especially young students, for their lightweight and modern design. As of now, owners of e-motorcycles are not required to hold a driving licence, which counts as another advantage for e-motorcycle makers over their traditional counterparts.
Foreign e-motorcycle firms also wasted no time entering the fray with Republic of Korea’s brand Mbigo rolling out several models with prices ranging from 1,700 USD to 2,600 USD. Chinese brand YADEA joined the market in October 2019 with their latest offering the YADEA G5, priced at 1,700 USD. The firm also opened a factory in the northern province of Bac Giang.
Sales of combustion engine motorcycles will likely continue to fall to just under 2.5 million units by 2024, according to industry experts, as competition from e-motorcycles is set to further intensify in the years to come.