VietNamNet Bridge – In the past two weeks, Honda and Yamaha, the two giants in the motorbike market, have announced they would build more assembly workshops in Vietnam, raising the total capacity to 1.5mil units a year.
On July 18, Honda Vietnam announced its plan to build a second factory in Vietnam, which will cover an area of 28 ha and have investment capital of $65mil. The new factory, to be located next to the existing one in Vinh Phuc province, is expected to become operational in the second half of 2008.
Honda Vietnam said that the main products of the second workshop would be scooter models like Air Blade, Click, Future Neo, some 500,000 of which will be churned out every year. From the second half of 2008, the production capacity of Honda will reach 1.5mil units a year, 50% of the market consumption level.
Prior to that, on June 29, Yamaha Vietnam quietly kicked off its new workshop at the Noi Bai Industrial Zone, a 15 ha workshop with the total investment capital of $43mil. The new factory is expected to put out 1mil units a year, raising the total capacity of the two workshops to 1.5mil units.
As such, by the end of 2008, Yamaha’s production capacity will not be inferior to Honda, and this promises stiffer competition between the two giants. The fighting between the two will create difficulties for local motorbike manufacturers.
The fighting in scooter models
The fact that the two motorbike manufacturers both have decided to expand their production capacity shows that the manufacturers still find Vietnam a market with potential.
Koji Onishi, Director General of Honda Vietnam, said that though the main product of the second workshop was scooter models, it was very likely that new products, including SCR, or even SH, would be produced there. All depends on the market.
Though being the late comer in the scooter market, Honda has achieved big achievements. In the last nine months, since its first scooter models appeared on the market, 47,000 Honda Clicks, the rival of Yamaha Mio, have been sold.
As for Air Blade, the direct rival of Nouvo, Honda had sold 19,500 units within three months after launching the product onto the market.
Meanwhile, Dinh Quang Tuan, Marketing Director of Yamaha Vietnam, said that the new factory would consist of a shop specialising in making scooters. Yamaha’s market share in Vietnam has considerably improved in the last time.
In early 2007, it was estimated that 20% of the scooters sold on the market were made by Yamaha, and the figure rose to 30% in June, and is expected to reach 40-50% by the end of 2007. In the first six months of the year, Yamaha sold 250,000 units, a sharp increase compared to the sale of 170,000 units in the same period last year.
Analysts have said that scooter will be the new choice of Vietnamese motorbike drivers; therefore scooters will help bring fat profit to manufacturers. By the end of 2008, scooter models will account for 25% of total circulating motorbikes, much higher than the current proportion of 11%. It is estimated that some 750,000 scooters of 10 models will be consumed every year out of the total 3mil units to be sold.
Besides Yamaha and Honda, other motorbike joint ventures will also jump on the bandwagon, including Suzuki, SYM, and especially Piaggio.
Though having the modest investment capital of $15mil in the 3 ha factory, Piaggio is still considered a redoubtable rival. With Vespa to be the main product, Piaggio will be the first manufacturer to assemble luxury scooters in Vietnam.
(Source: VNE, Viet Nam Net) |
