Traditional motorbikes are shrinking year by year

According to a report by the Vietnam Association of Motorcycle Manufacturers (VAMM), the number of motorcycles sold in the second quarter of 2024 was 603,127 units, an increase of 2.41% over the same period last year but a slight decrease compared to the first quarter of 2024.

Electric motorbikes are suitable for many customer groups.

The Vietnamese motorcycle industry is going through its most difficult period since 2008. Brands such as Honda, Yamaha, Suzuki, Piaggio and SYM dominate the motorcycle market share in Vietnam, selling 3.25 million units in 2019, but only 2.71 million units in 2020. After plunging during the Covid-19 pandemic, VAMM's motorcycle sales slowed down in 2023, but sales volume only reached 2.51 million units, about 16% lower than the previous year. This is the same sales volume as 15 years ago.

VAMM said that in the second quarter of 2024, Honda sold 475,630 motorbikes, down 1.8% compared to the same period in 2023. Overall, in the first half of 2024, Honda sold 957,885 motorbikes in Vietnam, down 4.6% compared to the same period in 2023.

Mr. Suzuki Yasutaka, General Director of Yamaha Motor Vietnam, believes that the motorbike market in Vietnam is moving from the development stage to the saturation stage because the demand for means of transportation is becoming more diverse than before.

Many experts believe that Vietnam is entering the early stages of the Motorization period. A country is considered to be entering the "motorization" stage when there are on average more than 50 cars per 1,000 people.

According to statistics from the International Automobile Manufacturers Organization, this figure in our country is currently 55 cars/1,000 people. This rate is still much lower than Brunei's 721 cars/1,000 people, Thailand's 280 cars/1,000 people, Malaysia's 542 cars/1,000 people, Singapore's 176 cars/1,000 people.

As we enter the automotive phase, the overall picture of the car market will change. Many Vietnamese families tend to gradually switch from motorbikes to cars as their main means of transportation. In urban areas, motorbikes are gradually becoming the second means of transportation for travel near home such as going to school, going to the market or on small, narrow roads.

The Ministry of Industry and Trade also predicts that the market size will reach a high of about 800-900 thousand cars/year by 2025. With the strong development of cars, motorbikes will enter a period of decline. This is a not-so-distant prospect in the Vietnamese market.

Electric motorbikes seize the opportunity?

In contrast to the gloomy picture of traditional motorbikes, electric two-wheelers continue to make progress thanks to the Government's emission reduction strategy and popular technical specifications. According to Motorcycles Data, VinFast and Yadea are the two leading brands of electric motorbikes in Vietnam at the moment. In particular, the Vietnamese car company's electric two-wheeler sales in 2023 accounted for about 3% of total market sales and by the first quarter of 2024, 6,632 electric motorbikes had been delivered. Electric two-wheelers attract customers mainly thanks to their diverse and youthful designs, rich modern utilities, improved batteries that allow faster charging and longer travel distances...

The Government's strategy to reduce CO2 emissions in the transport sector and the decline of the traditional motorbike market are creating a rare opportunity to develop electric motorbikes in Vietnam.

Recently, some electric motorbike brands have begun to dominate the market and receive support from consumers. Typically, VinFast, with electric motorbike lines such as Klara and Ludo, has created a big buzz. Investment in battery technology and charging stations is also being focused on by manufacturers, ensuring short charging times and longer travel distances.

From September 2023, VinFast first announced detailed quarterly business reports of electric motorbikes. Specifically, in the second quarter of 2023, VinFast electric motorbike sales reached 10,182 units, in the third quarter of 2023 they reached 28,220 units, and in the fourth quarter of 2023 they reached 24,309 units. In 2023, VinFast delivered 72,468 electric motorbikes to customers, an increase of 21% compared to 2022 and accounting for nearly 3% of total motorbike sales for the year in Vietnam (according to VAMM data). In 2024, VinFast's target number of electric motorbikes delivered is 100,000 electric motorbikes.

Also according to a report by HSBC Global Research, it is estimated that Vietnam's total annual sales of electric motorbikes and cars could increase from less than 1 million in 2024 to over 2.5 million units in 2036. Of these, more than 2 million units are electric motorbikes.

According to Dr. Pham Minh Tuan (University of Economics - Vietnam National University, Hanoi), switching from traditional motorbikes to electric motorbikes is not just a temporary trend but an inevitable step forward for the motorbike industry. This is a great opportunity for domestic manufacturers to grasp, thereby improving their competitiveness and creating higher quality products, meeting the needs of domestic and foreign markets.

This shows that the potential for the development of the electric motorbike market in Vietnam is huge. In the coming time, when traditional motorbike brands such as Honda, Yamaha, SYM, Piaggio, Suzuki really focus on investing in the electric motorbike sector, the market will receive positive signs of recovery and consumers will benefit from the results of competition.