Motorbike market in 2011: “unhappy ending” come after many years of hope

Motorbike manufacturers rush to expand the production because they could imagine before that the demand would be so weak. The prices have been decreasing dramatically, but consumers still keep indifferent.

Here are the 10 most outstanding events of the motorbike market.

1. Rushing to expand production

Domestic motorbike manufacturers, including Honda, Yamaha and Piaggio, the three big brands which are holding the biggest market shares, one after another, announced the plan to expand the production lines and upgrade the assembling capacity.

In April 2011, Piaggio set up the ground breaking ceremony for the construction of the second assembling factory in Vinh Phuc province in a plan to increase the capacity from 100,000 cars to 300,000 cars per annum by mid 2012. Not only building more factories, Piaggio has also decided to upgrade the research and development center right at the factory complex.

In early August, Yamaha announced the plan to push up production to expand the market with the investment of 26 million dollars to increase the capacity of the existing factory. With the project, Yamaha hopes to increase the output to 1.5 million products per annum.

The construction of Honda’s third factory in Vietnam started on December 12, with the total investment capital of 120.5 million dollars. After the factory becomes operational, slated by the end of 2012, the joint venture would have the capacity of 2.5 million products per annum.

As such, after 2012, the three big guys alone would be able to churn out 4.3 products per annum. The massive investment of the motorbike manufacturers shows that Vietnam remains the golden mine in the business strategy of foreign investors.

2. Motorbike fire and explosion cases occur repeatedly

The number of motorbike explosion cases in 2011 is really troubling, about 20; while the reasons behind the cases have not been found.

The troubled motorbikes were both old and brand new, motorbikes and scooters, and they were partially or entirely ravaged completely. Especially, in the case in Bac Ninh province, where a Honda Dream was exploded, a woman and her daughter were killed.

While state management agencies are still taking investigation and have not made final conclusion, motorbike manufacturers have affirmed that these should not be blamed on the technical errors or any new technical characteristics designed specifically for the Vietnamese market.

3. The year-end market gloomy

Unlike previous years, this year-end sale season is not as bustling as expected. People still do not intend to make purchases at this moment, even though sellers have been running noisy sale promotion campaigns.

The slow sale has been attributed to the economic downturn which has forced people to cut down expenses. They do not buy new vehicles, but use the existing ones. Especially, some people have sold scooters to use motorbikes in order to save fuel costs.

4. The landing of small size models

Most of big motorbike brands on the Vietnamese market launched the models with small sizes in 2011, which have been the favorite products to Vietnamese consumers.

In the last few months of 2011, all the three big guys launched their “tiny” products into the market. Yamaha marketed Nozza which was upgraded from Cuxi. Just some days later, Honda marketed Vision at the much lower price to compete with the product of the fellow-countryman. Meanwhile, Piaggio also launched Zip 100 of the next generation, assembled in Vietnam, which has the sale price nearly equal to Honda Vision.

5. The first professional motorcycle racing tournament

Vietnam Motor Cub Priz has officially become the first professional motorcycle racing tournament in Vietnam, commencing from 2011.