Motorcycle Makers Battle It Out in Vietnam: Southeast Asia's Underdeveloped Transport Network Ensures Vital Bike Market Has Plenty of Room to Grow
Wednesday, October 08, 2008 10:56 AM
Symbols: HMC
(Source: Japan Times)trackingBy Hiroko Nakata, Japan Times, Tokyo

Oct. 8--HANOI -- Red roses, field flowers, baskets of vegetables, slaughtered hogs. In Vietnam, farmers bring anything that can be loaded onto a motorcycle to market in the morning. In early evenings, bikers jam the streets as they return home.

The demand for motorcycles in Vietnam is extremely high due to a dearth of public transport and low income levels that put automobiles out of reach for many.

With 3 million motorbikes, Vietnam is the world's fourth-largest market, behind China, India and Indonesia. Because the country is one of the few emerging economies yet to embrace the automobile, Japanese motorcycle manufacturers are major players.

Honda Motor Co., at 40 percent, holds the top share in the 3 million motorbike market, followed by Yamaha Motor Co.'s 20 percent. Because of Honda's long domination of the Asian market with its popular Cub, people regard any motorbike as a "Honda," regardless of manufacturer.

"Motorcycles and mobile phones are the most important tools to live in Vietnam," said Nguyen Duc Cong, a guide at Japanese travel agent JTB Corp.'s Hanoi office.

"In Vietnam, we ride bikes when we go shopping, go to school and go to work," Cong said.

Fathers buy a motorbike for their sons and daughters when they start working. They couldn't go to work without one because there are no subways, he said. There are buses, but only people who commute for a long way or cannot buy motorcycles take a bus, he added.

"There is no country like Vietnam, where motorcycles are so deeply rooted in people's lives," said Tetsuya Kawahara, a senior manager for motorcycle sales at Honda Vietnam Co.

Kawahara said the Vietnam market has potential to grow, given data that one in every four Vietnamese owns a motorcycle -- low compared with other Asian economies that have experienced rapid growth.

At their peak, for example, one in every 2.5 people had a motorbike in Taiwan, while one in every three had one in Thailand.

"I expect the (motorcycle) market to grow for four or five more years," Kawahara said.

To support demand, Honda opened a new plant in a Hanoi suburb Aug. 29, boosting production capacity to 1.5 million bikes from 1 million. Yamaha will launch a new plant in Hanoi later this month to raise its capacity to 700,000 bikes from 470,000.


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