Multimillion dollar ‘empires’ in motorbike market
Foreign motorbike manufacturers have earned billions of dollars in Vietnam, a market with 90 million people and 45 million motorbikes.
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Another report showed that, counting the number of people owning motorbikes, Vietnam ranks second, just after Taiwan and China.
The high demand in Vietnam has helped foreign motorbike manufacturers earn big money over many years. However, figures about the operation scale and profits made by the manufacturers have only been released recently.
97% of the Vietnamese market share is believed to be held by five biggest players, namely Honda, Piaggio, SYM, Suzuki and Yamaha. Of these, Honda alone holds 70% of market share.
Having been present in Vietnam since 1996, Honda Vietnam has launched 20 million motorbikes into the market so far and 44,000 cars. This is a joint venture of Japanese Honda Motor which contributes 42% of capital, Vietnamese VEAM 30% and Asian Honda Motor 28%.
With three factories which have total investment capital of US$475 million, Honda Vietnam can churn out 2.5 million products a year. In 2014, the manufacturer sold 1.91 million motorbikes. In that year, Honda reported turnover of VND55 trillion, 95% of which was bought by motorbike sales.
With the achievements, Honda Vietnam listed itself among the top 3 foreign invested enterprises with highest turnover in Vietnam. The other two are Samsung (electronics) and Vietsovpetro (oil & gas).
The business results were exposed to the public recently through the financial report of VEAM, one of the three main shareholders.
VEAM contributed VND252 billion, or 30% of capital to the joint venture, and the value of the investment has increased to VND7.142 trillion. This means that Honda Vietnam is valued at VND22.140 trillion.
The figures about large profits of Yamaha Vietnam were also released recently when the Vietnam Forestry Corporation, a partner in the joint venture, announced the equitization plan.
Though the manufacturer’s turnover is on the decrease, from VND23.538 trillion (more than US$1 billion) in 2012 to VND21.097 trillion in 2013 and VND18.545 trillion in 2014, it still holds the second largest market share (23.4% in 2014) and is among the foreign invested enterprises with the highest turnover in Vietnam.
Arriving in Vietnam later than the two giants, Piaggio has been developing very strongly thanks to its fashionable models which satisfy Vietnamese taste. In 2014, it churned out 104,000 products, including 56,000 sold domestically, and earned US$265 million in turnover.
