Scooter Sales in Vietnam
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Va cac bac th? ng? m Hon Da VN da moc tui bao nhieu ti? n c? a dan minh [pic] Em xin phep VietNamNet Bridge – Two years ago the Vietnamese media was driven into a frenzy when Hollywood stars Brad Pitt and Angelina Jolie came to visit Vietnam for the first time.
The image of the couple in casual clothes riding a black Yamaha Nouvo scooter in downtown HCMC was widely seen in newspapers and magazines. Scooter riders seen in downtown HCMC. Vietnamese consumers have an increasing preference for scooters. This actually gave free publicity to Yamaha. Sales of the Yamha Nouvo scooter have rocketed in Vietnam as this scooter has become a fashion for not only women but also men. Yamaha’s good business has led to other motorcycle makers to enter the market or boost scooter production to capitalize on the growing demand. The race starts
Italy’s Piaggio, the world’s fourth largest scooter and motorcycle manufacturer, started construction of its first factory in Vietnam. Honda and Yamaha from Japan will open their second Vietnam factories soon. Honda Vietnam, the largest motorcycle manufacturer in Vietnam, has shifted focus to scooters for men. It started a campaign to enter the market six months after the trip of Vietnam by Mr. and Mrs. Smith. It launched the Air Blade scooter designed with a sporty fashion. As a favorite motorcycle brand, Honda caused an instant fever on the market after launching this scooter.
When placing an order for an Air Blade at a Honda authorized exclusive dealer in HCMC, customers will get a shake of the head. The dealers are flooded with a lot of orders. A Honda dealer on Nguyen Trai Street in District 1 says it still has more than 600 orders to fulfill. But those really wishing to own an Air Blade scooter can go to plenty of private retailers in the city, but the price is usually VND8-10 million higher than Honda’s list price. Despite the strong demand, the company says it is unable to scale up production as its factory in the northern province of Vinh Phuc is running at full capacity.
As an adaptive measure, Honda has increased shifts to fulfill the mounting orders. Koji Onishi, general director of Honda Vietnam, says that by end-April this year, more than 120,000 Air Blade units had been sold, becoming the best-seller of the scooter category on the local market. Not to miss the race, Yamaha introduced the new Yamaha Nouvo Elegance scooter that comes with an engine of 135cc in late April, which is higher than those of the previous scooter versions. With a list price of VND29. 2 million, including VAT, the new Nouvo scooter is going like hot cakes.
Just around 10 days after the new Nouvo version came out, Honda announced the launch of two new Air Blade versions with a sportier and more fashionable design. They retail for VND28. 5 million (VAT included) and come with three colors – dark blue, white and red. In addition to the new Air Blade, a sporty Air Blade Repsol version with the color of Repsol Honda racing team in MotoGP World Championship has been introduced this time at VND29. 5 million. The market is so lucrative that another Japanese motorcycle maker, Suzuki Vietnam Corp. , has also forayed into the scooter market, with the launch of he Hayate priced between VND21. 8 million and VND22. 8 million. The 125cc Hayate has a sporty design and targets male motorcyclists and is expected to strongly compete with Honda’s Air Blade and Yamaha’s Nouvo. The Suzuki prices are lower VND7-8 million than the other two brands, so the Hayate has a competitive advantage in pricing. The competition in design Vietnam Manufacturing and Export Processing Co. (VMEP), Sanyang’s motorbike maker in Vietnam, was the first to make scooters in Vietnam with the SYM brand. Taiwan’s SYM is one of the successful stories.
The company launched the Attila scooter in 1997, which has since gained increasing popularity among young people. SYM leaders say that the introduction of the Attila has paved the way for the company to gain a competitive edge over cheap Chinese motorcycles, which overwhelmed the local market in the late 1990s and early 2000s, as well as others. The Attila was then the best-selling locally assembled scooter model. Imported scooters like Dylan,@ and Spacy of Honda, Majesty of Yamaha, and Epicuro and Aventis of Suzuki are prohibitively expensive but the compact and fashionable design and moderate price have made the Attila more competitive.
The Attila retails for about VND30 million, around one- and two-thirds of imports. Buoyed by SYM’s success, other foreign companies including Yamaha, Suzuki, Honda from Japan later jumped into the market. Experts formerly showed concern that SYM would find it hard to maintain its dominance on the scooter market since more Japanese producers were aggressively increasing investment in scooter innovation and design to gain a slice of the pie. But brands like Honda Click, Yamaha Mio Classical and Suzuki Amity seem to be not the archrivals of the Attila which is particularly popular among urban females.
SYM’s Attila Elizabeth version has become a favorite among young women thanks to its fashionable, elegant and compact design. The demand for the Attila Elizabeth has outpaced SYM’s supply, leading to its price outside the company’ dealers increasing by VND2-3 million per unit. The good outlook The growth prospects of the market are good as young consumers in cities have an increasing preference for scooters. Many motorcycle assemblers have switched to scooter production to capitalize on this market trend and have been expanding production to meet local demand. Taiwan’s biggest bike maker Kwang Yang Motor Co. Ltd. (KYMCO) is an example.
It has become the majority owner of Hoa Lam Kymco Motors Corp. after acquiring a 60% stake from its local partner. Hoa Lam Automobile-Motorcycle Joint-Stock Co. transferred its 60% stake in this joint venture to the Taiwanese company, thus reducing its holding to 30% from the previous 40%. KYMCO’s stake in the venture, meanwhile, is up to 90%. Nguyen Tien Sy, deputy general director of Hoa Lam Kymco Motors Corp. , says that the authorities have endorsed the stake transfer between the two partners. The acquisition, whose value is not disclosed, is part of the Taiwanese company’s plan to deepen its investment in Vietnam.
KYMCO will develop a new factory in HCMC’s District 2 besides the joint venture factory that is mainly assembling motorcycles in Binh Chanh District. The new factory in Cat Lai Industrial Park will produce motorcycle parts for local sale and export to ASEAN markets, Sy says. KYMCO will move its production lines from a factory in Taiwan next month to the new factory, which will mainly manufacture scooters. KYMCO attributes its increased investment in Vietnam to the strong demand for motorcycles. This firm forecast the domestic scooter market will continue expanding in the next five to 10 years.
KYMCO entered Vietnam in late 2004 by buying a 30% stake in the bike manufacturing plant, which was wholly owned by Vietnam’s Hoa Lam Automobile-Motorcycle Joint-Stock Co. The value of the factory then was set at US$15 million. The brand name KYMCO, however, is not popular in Vietnam, but the Taiwanese company has reaped success elsewhere, exporting products to 81 countries worldwide, including Europe. KYMCO has set up nine motorcycle factories in Asia. The two market leaders, Honda and Yamaha, also started work on their second factories in northern Vietnam last year. Honda’s new factory worth US$65million will mainly produce scooters.
The plant, which is located next to the first one in Vinh Phuc Province, is part of Honda’s expansion plan after its success over the past 13 years. The new 28-hectare plant is scheduled for mass production in the third quarter of this year, with initial annual production capacity of 500,000 units, says Koji Onishi, general director of Honda Vietnam. Together with the existing plant’s annual capacity of one million units, this plant will help meet the increasing demand of Vietnamese customers, he says, adding state-of-the-art technology would be applied to ensure high quality. The most modern and latest technology of Honda will be applied to this new plant that may produce the perfect quality products for Vietnamese customers,” he says. “The income level is increasing and the infrastructure is developed. Thus, the demand for scooters becomes higher and higher. In addition, its easy operation and modern design can sharpen customers’ personality. Thanks to the growth of the Vietnamese economy, we realize that young people especially in big cities prefer the scooters,” says Yasuhiro Imazato, director of Honda Vietnam brand in HCMC.
Meanwhile, Piaggio, the world’s fourth largest scooter and motorcycle manufacturer, is building its first factory in northern Vietnam. The company will spend US$45 million on the factory which covers eight hectares in Binh Xuyen Industrial Park in Vinh Phuc Province, and will be commissioned in mid-2009, with an initial annual output capacity of 50,000 units for local sale and export. The project is part of Piaggio’s broader three-year plan to expand its operations in Asia by setting up shop in Vietnam and India, Piaggio chief executive Roberto Colaninno.
He says the company’s products are already available in Vietnam, but it still wants a factory plus a sales network in the country. Piaggio brand is generally targeted at high-end customers. The Italian firm has five local companies as distributors – Sapa Trade Co. , Xuan Cau Co. , Viet Nhat Motor Co. , Y Viet Motor Co and International Friendship Co. However, Piaggio’s investment in Vietnam is still smaller than Japanese and Taiwan motorbike producers. Taiwan’s Sanyang Industry, which is known for SYM brand, looks to Vietnam as one of its major motorbike production hubs in Asia and its biggest investment markets.
Under a motorcycle industry development plan recently approved by the Ministry of Industry and Trade, Vietnam will become a major Asian center for motorcycle design and production. The plan envisages local motorcycle demand reaching 2-2. 2million units a year. By 2015, there will have been some 31 million motorcycles in use nationwide and some 33 million by 2020, compared to the current 20 million, according to the plan. An additional 1. 8 million motorbikes will hit the road a year. (Source: SGT)