Local bike-makers start to wobble

A decade ago motorbike manufacturing and assembly was a fertile land to local firms which amounted to 56 in the early 2000s.

There were 1.629 million motorbikes made and assembled in Vietnam by local and joint venture firms in 2000, up to 1.268 million units came from local firms, accounting for 78 per cent.

In 2001, local firms churned out 1.869 million units out of total 2.169 million motorbikes made and assembled in the country, representing 86 per cent in total.

Local firms, however, failed to retain these record figures. In 2003, the motorbike volumes made and assembled by local firms slid to 61 per cent in total and kept falling continually.

In 2010, of total 3.1 million registered motorbikes just 47,000 units were made and assembled by local firms out, less than 2 per cent in total. The number of local firms active in motorbike manufacturing and assembly also tumbled from 56 to 30.

The local firms’ Achilles’ heels were poor styles and designs, lack of brand development strategy and a competitive edge.

Vietnam Automobile, Motorbike and Bicycle Association statistics show that more than half of the current 30 local motorbike firms struggle to operate and it was also impossible for these cash-strapped firms to make in-depth investment to ameliorate competitiveness.

According to scores of motorbike dealers consumers tend to opt for competitively-priced motorbike lines made by foreign-backed motorbike joint-ventures as such motorbikes have more stable quality and clear guarantee terms. Besides, these firms often sign contracts with financial companies to help buyers own the vehicles with payment by installments.

Statistics show that of total 3.14 million motobikes sold in Vietnam in 2010, 1.7 million units came from Japan-backed motorbike join venture Honda Vietnam Company (HVN), accounting for 54 per cent. HVN announced the plan to build its third $120 million factory in northern Ha Nam province, hiking its production to 2.5 million in late 2012 from current two million units per year.