Diminishing Motorbike Assembly Enterprises

Diminishing Motorbike Assembly Enterprises

Le Anh Tuan, vice chairman of the Vietnam Bicycle and Motorbike Association (VBMA) said that most motorbike assembly enterprises have had to close while the remaining enterprises operated in a lacklustre manner over the last year.

Most motorbike assembly enterprises in Vietnam did not have enough resources to continue their operations and consequently had to shift their attention to other fields and goods.

Those enterprises which remain operational are those that developed proper investment plans with high quality products and trademarks.

Nonetheless, these enterprises face many difficulties. An enterprise in Haiphong said that in the previous year, the assembly of motorbikes was profitable and, therefore, the enterprise continued to invest in the field. However, it now faces many difficulties in production and business.

According to experts, tighter tax policies together with limits on motorbike use in some major cities have made market shares of local manufacturers contract significantly.

There are now three options for motorbike assembly and manufacturing enterprises: a shift in promotion to the rural market; a launch of top-end motorbikes to meet the demand of consumers in urban areas; or export.

However, it is not easy for local enterprises to implement these three options.

VBMA said that in 2000 and 2001, motorbike manufacturing saw a boom in Vietnam with about 50 enterprises involved in the industry, whose capacity was put at about two million motorbikes per year.

Currently, there are only about 20 enterprises nationwide that remain operational. The total number of motorbikes sold in Vietnam in recent years was around one million motorbikes per year and the total domestic market share of enterprises accounts for only 30 per cent.

Regarding exports, foreign-invested enterprises have great opportunities thanks to their business model while local enterprises face many difficulties. There are many reasons for this, but more importantly, local enterprises have yet to manufacture motorbikes with ‘Made in Vietnam’ designs and labels.

Moreover, there has yet to be any adequate development strategy for the motorbike industry and consequently local enterprises are having to strive even harder to affirm their position amongst the fierce competition.

• B.H