Vietnam Motorcycles Market is rapidly changing under the pandemy effects and electric scooters manufacturers are finally gaining tractions and market share, with VinFast able to deliver over 10k e-scooter per month. In October registrations have been 274.986 (-12.1%) with total sales in the first ten months of the year at 2.35 million (-15.5%).
The year of changes
Already few years ago the government announced the target to shift 100% motorized two wheelers park from ICE to EVs by 2030, as not postponable action to fight against pollution.
However, not serious steps have been done in this direction before the arrival of Covid 19 pandemy, with local producers perched to defend their margins in the current ICE line up not introducing any electric model for sales.
The 2020 represents a sharp corner point. The market has been hit by the multiple effects of the pandemy, although the government has proved high ability on controlling the evolution, and sales fell down as in the entire region, more for the economy decline due to the fall of tourism and export, than for lockdown measures.
Sales declined 29.5% in the second quarter and 17.6% in the third.
In October registrations have been 274.986 (-12.1%) with total sales in the first ten months of the year at 2.35 million (-15.5%).
Brand-wise, Honda dominates the competitive arena ahead of Yamaha, has they did for the last 50 years.
However, they are finally under attack, due to the fast growth of a new generation of models, launched by local start ups, focusing on electric scooter. The champion of them is the local manufacturer VinFast, producing only electric vehicles both in the two and four wheelers, which started up only two years ago, already achieving dramatic results, with over 10k sales per month.
Market Outlook 2020-2025
In the Beyond Covid19 project, we are revising on monthly basis and sharing with our Clients the 2020-2025 motorcycles market outlook.
As far as Vietnamese industry, the October performance was below expectations and in general the actions in place to counteract the covid19 spread are reducing our confidence on the market recovery.
Consequently full year 2020 outlook has been moderately downgraded at 3.0 million units, down 12.9% from the previous year.
2021 outlook has been reduced as well and actually is at 3.2 million, not yet recovering the 2019 pre-covid level.
In Vietnam, motorbikes are the main means of transportation of big cities. Motorcycles are currently responsible for about 80% of travel needs in the city. Previously, two big cities, Hanoi and Ho Chi Minh City, proposed a scheme to ban motorbikes from the inner city to reduce traffic congestion.
In August 2017, Hanoi City issued Decision No. 5953 / QD-UBND approving the scheme “Strengthening the management of road transport means to reduce traffic congestion and environmental pollution in Thanh Hoa. Hanoi city, the period of 2017 – 2020 vision 2030 “. According to the approved project, Hanoi may limit and proceed to stop operating motorcycles in the districts in 2030.
Following Hanoi, in August 2018, Ho Chi Minh City also issued the project “Strengthening public transport in combination with controlling motor vehicles in Ho Chi Minh City”. Under this project, Ho Chi Minh City can restrict motorbikes in some central districts and proceed to ban motorbikes by 2030.