Vietnamese-invested motorbike manufacturers are suffering plummeting sales since the beginning of this year but foreign-led firms are enjoying increasing sales, local media said.
To boost sales, many domestic companies have accepted huge losses, it said.
“For example, our company has to accept an average loss of VND200,000 ($12.5) on a motorbike which we have to sell at VND4.2 million but our sales still dropped by half,” a company said.
“Worse, the price of materials for motorbike production like plastics, rubber and aluminum is on the rise,” he mourned.
According to the Vietnam Bike Manufacturers Association, the core reason for the sharp fall in sales is rampant investment in motorbike assembly when the market showed positive signals.
After the Government removed all restrictions on motorbike ownership from December 2005 [each adult person was permitted to have only one motorbike registered for traffic], motorbike sales jumped up.
Forecasting high profits, many existing enterprises expanded production while newcomers also bought components to produce motorbikes.
To avoid further losses, many enterprises have resorted to exports to low-end markets like Africa.
“South Africa is a potential market for us but we dare not export in large volumes due to the fear of our failure to retrieve outstanding loans. We want to sell cash-on-delivery but our partner lacks the financial capacity,” Do Quang Hien, general director of T&T Co. said.
According to the Ministry of Industry, Vietnam exported 100,000 motorbikes and sets of components in 2005 but as many as 90,000 units belonged to the Japanese-invested Honda Vietnam.
On the contrary, most foreign-led motorcycle makers are enjoying high sales growth in the first months of 2006.
Honda Vietnam, the largest motorbike maker in the country, reported a 50 per cent sales rise in the first five months of this year. Honda is now holding over 60 per cent of the Vietnamese market share.
According to the Vietnam Bike Manufacturers Association, Yamaha Vietnam also had a high sales increases but refusing to detail the growth.
The number from the Ministry of Transport said Vietnam is home to over 13 million motorbikes. The motorized two-wheeler population will reach 17 million soon.
Motorbike firms expect to sell 1.8 million units in 2006, up 20 per cent against 2005.
VietNamNet
Vietnamese
