State all set to make motorbike policy U-turn

Motorcycle assembly projects could soon be hitting top gear

The strategy on Vietnam’s motorbike development until 2015 and orientation until 2025 just inked by Minister of Industry Hoang Trung Hai stated that investors into the motorbike industry would be able to operate on a level field under the WTO’s legal framework.
“The adjustments on the motorbike market will be conducted based on policies regarding tax, environmental protection, industrial property and time of motorbike usage,” the strategy stated.
Prime Ministerial Decision 147 dated October 25, 2002 put an end to granting licences to new motorbike production facilities.
To move ahead with the new strategy to make the country a motorbike export centre, the Ministry of Industry (MoI) has just submitted a proposal to the prime minister to remove decision 147.
Do Huu Hao, MoI’s deputy minister, said that with the lifting of the ban, new investors will roll out high quality motorbike models with the end result that locally produced motorbikes will be exported not only to regional countries but also to international markets.
Currently, there are around 40 motorbike producers in Vietnam of which 10 control the market with a 90 per cent market share.
Amongst them, Japanese-backed Honda Vietnam (HVN) is the leading producer, followed by Taiwan’s SYM and Japan’s Yamaha and Suzuki.
Figures released by the Vietnam Motorbike Bicycle Association show that local motorbike producers last year churned out 1.5 million motorbikes and exported about 100,000 motorbikes. Total registered motorbikes in circulation reached around 15 million units nationwide.
HVN exported more than 39,000 motorbikes and 300,000 auto parts in the first eight months of the year, reaping revenues of $18 million.
The firm has exported 200,000 motorbikes and about two million auto parts since it began exporting in May 2002, earning $125m.
Experts said that the possible lift of new investment ban will mean more foreign investors will set up a bike manufacturing facilities to take advantage of cheap labour costs.
Hao added, however, that the Ministry of Industry would still require investors meet stringent conditions on motorbike production such as financial capability, engine production, environmental protection and the technology chain.
Under the strategy, domestic motorbike production would meet 90 per cent of domestic demand by 2010, local content of motorbikes would reach 90 per cent and local content of motorbike engines would reach 95 per cent.
Motorbike exports in 2010 should reach 450,000-500,000 units with a turnover of some $300 million annually, according to the ministry.
In addition, the strategy calls for the sector to establish research and development centres throughout the country to increase the competitiveness and enhance the design of products. During 2011-25, local producers should be able to design and produce luxury motorbikes and increase export turnover, according to the plan.




No. 780/September 25 - October 1, 2006