HA NOI (Biz Hub) — The oversupply of motorbikes in Viet Nam has forced manufacturers to boost exports.

Vietnamese consumers buy about three million motorbikes every year. The five biggest motorbike-producing joint ventures in the country (Honda, Yamaha, SYM, Suzuki and Piaggio) make four million units a year.

Honda Vietnam (HVN) will sell its SH model in Japan starting September 13 and expects to export 3,000 units per year. The company currently exports an estimated 12,000 Lead 125s to Japan annually, as well as more to China, Thailand and India.

General Director of Honda Vietnam Masayuki Igarashi told doanhnhansaigon magazine that his company would export more motorbikes to Thailand, Malaysia, the Philippines, Laos, Cambodia, Pakistan and Italy as well as new markets.

In regional markets, HVN earns more than US$40 million a year in export turnover from the Dream and Wave models, said Igarashi.

SYM Vietnam has been exploiting the ASEAN market for many years. General director Wang Chinh Tung said his company exports about 3,000-4,000 motorbikes per month to Malaysia, the Philippines, Singapore, Indonesia, Myanmar, Laos and Cambodia. In 2012, SYM Vietnam exported more than 30,000 units to ASEAN countries, double what it exported during the same period last year.

Piaggio Vietnam annually ships about 30,000 units to the ASEAN market. It also exports products to South Korea, Australia, the US and Europe.

Tran Thu Mai, who works in communications at Piaggio Vietnam, said that the Asian market now is the fastest growth rate in the world and will account for an estimated 50 per cent of the firm's revenue in 2014.

Mai said the firm expected to sell 70 million euros worth of motorbikes and motorbike parts in the 2012-14 period.

Export enhanced

Motorbike consumption over the last two years decreased dramatically as the economy declined. Most motorbike manufacturers reported business difficulties during 2012.

Honda Vietnam sold 3.11 million units in 2012, only 93.4 per cent of what it sold in 2011, said company representative Masayuki Igarashi. This year, HVN spent VND15 billion ($714,000) on an aggressive sales promotion programme.

Despite these difficulties, the company recently built its third factory with an investment of US$120 million in northern Ha Nam Province. The factory is expected to be operational by the end of this year and will help increase HVN's annual capacity to 2.5 million units.

Similarly, Yamaha Vietnam spent $50 million this year to increase its capacity to 1.5 million units.

Analysts said that new projects to be operational by the end of this year would raise the manufacturers' annual production capacity to nearly 5.5 million units, two million units higher than domestic demand, making it necessary to increase exports. — VNS