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VietNamNews

Manufacture of motorbikes revs up, sales sputter

Update: June, 28/2012 - 10:10

 

Customers buy motorbikes at a Honda shop in Ha Noi. The manufacture of motorbikes in the first five months of this year increased 1.7 per cent over the corresponding period last year. — VNS Photo Truong Vi
HA NOI — Nearly 1.6 million motorbikes were manufactured domestically in the first five months of the year, an increase of 1.7 per cent over the same period last year, according to the General Statistics Office.

During the same period, however, motorbike sales declined by 3.9 per cent, with the execess production capacity going straight into inventories, which ballooned by 42.3 per cent during the five-month period.

Sunfat Viet Nam Co has reduced production capacity from 10,000 vehicles to around 3,000 per year, but the company continued to sit on 7,000 vehicles in inventory, reported the Thoi bao Ngan hang (Banking Times).

The Banking Times also quoted a distributor as saying the motorbike sales at dealerships had been falling continuously despite a variety of promotional programmes, including registration fee support and price cuts of VND2-3 million (US$96-144) per unit.

Many dealers were only maintaining their operations with revenues from repair and maintenance services, the distributor noted.

Viet Nam Auto Motorcycle Bicycle Association chairman Pham Cuong said the motorbike market would continue to face difficulties through the end of this year, but he expressed optimism for the market's long-term potential.

"I think it'll take a very long time for the motorbike market to become saturated since there is still great built-in demand for them," Cuong said. "A lot of people still need to buy new ones with well-known brand names and more advanced technologies."

In the short term, his association recently proposed to administrative agencies many solutions to assist manufacturers, including corporate income tax and value-added tax reductions and preferential interest rates.

While waiting on Government support, Cuong said, enterprises should help themselves by enhancing product and service quality, reorganising management, and streamlining production and investments.

A representative of Honda Viet Nam said this firm planned to boost research and development and production of scooters for women as it anticipated growing demand demand for these types of vehicles in the future.

Sufat Viet Nam deputy director Dinh An said Sufat would emphasise fuel-saving technologies, especially electronic fuel injection, to enhance the competitiveness of its product lines, as well as venture into such market segments as "classic" motorbikes and electric bikes.

Suzuki has said it would focus on sport motorcycles, while Kymco said it would concentrate on scooters for the low end of the market. — VNS

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