Honda accounted for 219,000 bikes and 115,000 motorbikes in January, and February, respectively.— Photo zing

HA NOI  (Biz Hub) — Viet Nam's motorbike market was badly hurt by the prolonged Lunar New Year holidays and accompanying sluggish demand, with sales in the first two months reported at record low levels.

According to the Viet Nam Association of Motorcycle Manufacturers (VAMM), while January saw 335,000 motorbikes sold, that was still down 97 per cent year on year, and February may experience a record slump, with around 200,000 units sold.

Of this figure, Honda accounted for 219,000 bikes and 115,000 motorbikes in January, and February, respectively.

Honda's General Director, Masayuki Igrashi, who is also the chairman of VAMM, attributed the slowdown to the prolonged holiday and economic difficulties, which generally dampen demand.

Known locally as Tet, the celebration of the Lunar New Year is Viet Nam's most important holiday and triggers a surge in consumption and travel, ahead of an extended nationwide shutdown.

But this year, critics are arguing that the popular, protracted Tet holiday is actually hurting the already fragile economy.

"This is the worst time since I started the business 15 years ago. I am thinking about closing the dealership and turning it into a restaurant," said Pham Manh Sy, director of the Viet Phu Company, a prominent Yamaha dealer in Ha Noi.

Sy told Viet Nam News that unlike previous years when they had enjoyed better sales numbers during the period around Tet, he only sold three motorbikes last month.

Motorbike sales in Viet Nam have shown a decline in the last three years, largely due to a slowdown in the country's economic growth.

Domestic motorbike sales for 2013 dropped to some 2.5 million, compared to 3.1 million in 2012, according to the Viet Nam Auto Motorcycle and Bicycle Association.

In addition, 2012's growth was down 5.03 per cent over 2011, the slowest pace in 13 years, the association reported.

Viet Nam's motorbike market is the fourth-largest in the world, after China, India and Indonesia.

Last month, the VAMM made its debut with the goal of building a healthy motorcycle industry and overcoming the current difficulties.

The association's five founding members include Honda, Yamaha and Suzuki of Japan; SYM of Taiwan; and Piaggio of Italy, which account for more than 96 per cent of Viet Nam's market.

Meanwhile, the market for high powered motorbikes is expected to boom after the government moved to relax policies on driving licences, which took effect this month.

Last year, the Ministry of Transport removed regulations on providing the special A2 licences for motorbikes with an engine capacity of more than 175 cc. The licence was previously limited to specific applicants, typically police officers, military personnel and motorsport athletes.

According to the ministry, the A2 licences will be granted to applicants who pass driving tests for high-capacity motorbikes.

Market insiders said, despite tight regulation on A2 licensing, the high-powered motorbike market had seen rising sales in recent years.

Meanwhile, many people have been reportedly trying to join motorsport clubs, just to become eligible for the licences.

Nguyen Van Dung, director of Viet Nhat Corporation, a leading dealer for imported bikes in Ha Noi, said last year his company began importing a range of high-powered bikes.

"I think there will be a influx of high-powered imports from now on to service the boom in demand after the A2 law is removed," he said. — VNS