Bike firms slip on banana skin

Japan-backed Honda Vietnam (HVN) had had to revise its 2012 production plan, said company general director Masayuki Igarashi.

Accordingly, HVN envisaged retrenching its motorbike production in 2012 to around 1.93 million units against 2.15 million units in 2011. The production capacity of HVN’s two manufacturing plants in northern Vinh Phuc province is two million units per year.

“Monthly production will be cut by 1 per cent, tantamount to 12 per cent for the whole year. From early year until the present, the company posted 104 per cent production output, hence production must be revised in later months,” said Masayuki.

Sinking sales have not only hurt HVN’s production in 2012 but could also threaten its plan to operate the third factory with an initial capacity of 500,000 units per year based in northern Ha Nam province.

As planned, construction will be finalised in late 2012 and the plan will come into service from 2013.

“Our third factory would not be commissioned on schedule if things did not improve even though construction was finished and associated equipment assembled,” said Masayuki.

Honda Vietnam makes up 60 per cent share in Vietnam’s motorbike market.

For its part, to fuel sales Italy-backed Piaggo Vietnam just rolled out its ever extensive promotional programme reserved for scooter Vespa and Fly versions. Accordingly, customers picking Vespa or Fly at its any dealers across the country during the time of Euro 2012 will enjoy special incentives worth VND3 million ($140) for Vespa and VND4 million ($190) for Fly lines.

Locally-invested motorbike firms are not an exception. Chairman Pham Cuong at Vietnam Auto Motorcycle Bicycle Association (Vaboma), also motorbike producer Sulfat Vietnam Company director said many motorbike firms kept on production just to pay bank loans and interest.

Motorbike firms’ critical state has also badly impacted on spare part manufacturers. Pho Yen Mechanical Joint Stock Company, one of 10 parts producers to Honda Vietnam, saw its sales revenue with HVN halving when this Japan-backed firm consumption sank.