Peugeot makes a comeback in Vietnam with high-end scooters

The French automaker Peugeot has confirmed its return to Vietnam's scooter market where it will have to compete with strong rivals from Japan and Italy.

The comeback announcement was made only days before the Vietnam International Motorshow.

Various models of the company were popular in Vietnam in the 1950-70s, but nowPeugeot is a newbie in the market, which consumes around three million motorcycles a year made by the likes of Honda, Yamaha and Piaggio.

Vietnam’s motorbike market reached its saturation point in 2007, said Xavier Casin, who represents Peugeot Motorcycles in Vietnam and Southeast Asia.

But it is noticeable that local people want to upgrade their low-range motorcycles to scooters and once they have a scooter, they want a high-end scooter, he said.

This time, Peugeot will introduce only high-end scooters which fall in the price range of VND50-80 million ($2,240-3,580).

High-end scooters were rare in Vietnam around 10 years ago, but as local consumers have more money to spend, many now turn to more expensive products. Industry insiders believe high-end motorcycles now account for up to 10 percent of the market. That small share alone is equal to sales of scooters with big engines in the whole Europe in a year.

Three first models will be launched next week at the Vietnam International Motorshow 2016 next week. The company will open its first stores in Hanoi and Ho Chi Minh City.

As sales of motorcycles are low outside of Asia, European manufactuers are increasingly looking for new markets in China, India, Indonesia and Vietnam.

For now, Peugeot said it will try to focus on Vietnam first, testing and twitching its products for the country's flood-prone streets.

The company is optimistic about the high-end market segment, even as plans to curb personal vehicles have been announced while popular brands such as Honda and Piaggio have developed a large and loyal customer base.