Motorcycle makers fear anti-congestion rumours

Slowing motorbike sales could be further hit by rumoured limits on motorcycles in major urban areas Photo: Le Toan

Masayuki Igarashi, general director of Honda Vietnam, has expressed concern over the potential for government policy limiting motorcycles in Vietnam. Other issues worrying the head honcho include a lack of transparent statistics on the current number of motorcycles in the country, leading to uncertainty over the future of the world’s fourth largest motorcycle market.

According to the prime ministerial Decision 356/2013/QD-TTg issued last February, the government predicted the number of motorcycles in the country would reach 36 million units by 2020. However, latest statistics from the Ministry of Transport show that the number of registered motorcycles has already surpassed 38 million units, yet many more remain unregistered.

“We wonder whether the Vietnamese government will limit the number of motorcycles in any way, and how such a limitation could be implemented,” said a representative of Piaggio Vietnam at a meeting at the Ministry of Planning and Investment last week.

Tran Quoc Khanh, Vice Minister of Industry and Trade, at the Vietnam Business Forum (VBF) held in Hanoi last December advised motorbike makers to prepare to change their business strategies, as big cities like Hanoi and Ho Chi Minh City intend to issue measures limiting the number of motorbikes to ease transport congestion. No limitation measure in Hanoi and Ho Chi Minh City has been issued so far.

“If the local authorities limit motorcycles in big cities to ease congestion, we will have to focus on rural markets. This means pulling back on state-of-the-art products with advanced technology,” said Igarashi.

In reality, even without government policy limiting the manufacture or purchase of motorbikes in the country, the market has been in decline for the last three years.

Statistics from the five biggest manufacturers including Honda, Yamaha, Suzuki, Piaggio and VMEP Vietnam show their sales declined from 3.4 million units in 2011 to 3.11 million in 2012 and 2.79 million last year.

The downward trend of the market forced Honda, the market leader, to delay the inauguration of its third factory in the northern province of Ha Nam in 2011.

Wang Chinh Tung, general director of VMEP Vietnam, confirmed that 2014 remained a tough year for the motorcycle market and was pessimistic about sales this year.

Just last week, the five biggest motorcycle manufacturers formed the Vietnam Association of Motorcycle Manufacturers in an effort to help them influence government policy. The association expects to be able to communicate directly with Vietnamese government bodies to discuss policies related to the motorcycle market.