Limit rumour rattles motorbike manufacturers

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Tran Quoc Khanh, Vice Minister of Industry and Trade, speaking at the Vietnam Business Forum  (VBF) held in Hanoi last week, advised motorbike makers to be ready to amend their business strategies.

The advice was given in response to a question from motorbike makers on the government’s long-term strategy for the development of the industry in Vietnam.

“Some big cities are suffering severe congestion caused by the increase in the number of motorbikes, and city leaders are thinking to limit numbers. This is unavoidable, and the decision belongs to people’s councils and the Ministry of Industry and Trade can’t interfere,” said Khanh.

“So we’re advising motorbike makers to pay attention and be ready to adjust their business plans,” Khanh noted.

Vietnam has relied on motorbikes as a mass means of transportation for decades. Foreign companies such as Honda, Suzuki, Yamaha, Piaggio and VMEP dominate the local market. Honda with three factories in Vietnam is the largest player.

According to the prime minister’s Decision 356/2013/QD-TTg issued in February, the government estimated the number of motorbikes would reach 36 million units by 2020. However, the Ministry of Transport two months later announced the number of motorbikes across the country had already surpassed 37 million units.

Hanoi and Ho Chi Minh City are the two biggest markets for motorbikes in Vietnam and unsurprisingly suffer severe congestion.

Even though there have been no measures introduced to limit the numbers of motorbikes, Khanh’s advice implied that motorbike usage could be limited in major cities.

Khanh also said the government was mapping out a strategy to expand the car market, but not the motorbike market.

Motorbike makers have complained that given the lack of official and transparent statistics on the current number of motorbikes, the proposed limitation created uncertainty for major players in the two wheeler industry and this would have a knock-on effect on long-term planning.

“There is an urgent need to have a consistent long-term strategy to develop the motorcycle industry in Vietnam,” the Automotive and Motorbike Working Group at the forum, a dialogue between the government and the state sector,  stated in a note.