High-engine motorbikes stir domestic market
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The recent launch of motorbike models with high-engine displacement has attracted the Vietnamese and stirred the domestic market, even though import prices are 2-3 times higher than world prices.
The leader in this segment is Honda Việt Nam, with the SH 300i imported from Italy. With a price of VNĐ248 million (US$10,880), nearly the price of a small sedan, the motorbike has seen good sales in urban areas, with an expected volume of 400 units next year.
Kymco, a brand name of Taiwan, introduced the People GT300i model in Hà Nội in July. This motorbike is seen as a direct competitor to the Honda SH300i. However, a Kymco representative said the introduction is just to get an idea of the Vietnamese market before preparing future plans.
Meanwhile, Yamaha Việt Nam is planning to roll out model X-MAX 300 in the country this year, which is also expected to be a rival of the SH300i.
Piaggio, early this year launched two models with high engine displacement — Aprilia and Moto Guzzi — in the domestic market, to mark its 95th anniversary. In addition, the firm has two other models — Beverly 300 i.e and Vespa GTS 300.
A French company, Peugeot recently entered the Vietnamese market with models Geopolis 300 and Satelis 300 and appears intent to compete with its rivals for marketshare.
Insiders said with the country’s increasing economic development and transference of customers’ consumption demand, high-engine displacement motorbikes and motor scooters would witness a lot of opportunities for development by 2020.
“However, a Kymco representative said the introduction is just to get an idea of the Vietnamese market before preparing future plans.”
Five years ago, it was rare to see a high-engine displace motorbike on the streets. But today, the image is common.
The market opened its doors to the vehicle when the transport ministry removed its regulation which restricted the number of candidates allowed to drive with an A2 licence — the requirement for motorbikes above 175cc in force since March 1, 2014.
This new adjustment, Honda Việt Nam General Director Minoru Kato told it was like “good medicine to stimulate the growth of the high-engine displacement motorbikes market in Việt Nam.
However, the selling price remains high due to taxes and fees. Currently, the price of the bike factors in an import tax of between 65 per cent and 75 per cent, the special consumption tax of 20 per cent and value-added tax of 10 per cent. Besides this, other fees such as transport, storage and registration fees are also included. On an average, an imported car will have a price that is two or three times higher than the price in the world market.
According to commitments of tax cuts and reduction from trade agreements that Việt Nam has signed, the import tax of high-engine displacement vehicles from ASEAN, Japan, European Union and the United States will be reduced systematically and abolished within the next eight years, which would lower prices in the future.
Insiders said local motorbike makers had the tendency of producing high-engine motorbike scooters in Việt Nam, not only to meet demand, but also for export. However, there were concerns that when major cities did not yet have effective measures in place to reduce traffic jams, the increase of high-engine displacement models on the roads would worsen the situation.
Questions & Answers
Q.Which specific regulation change helped open the Vietnamese market for high-engine displacement motorbikes?
Which specific regulation change helped open the Vietnamese market for high-engine displacement motorbikes?
The market opened after the transport ministry removed its regulation restricting the number of candidates allowed to drive with an A2 licence. This licence is required for motorbikes above 175cc, a rule in force since March 2014.
Q.What are the main factors contributing to the high selling price of these imported motorbikes in Vietnam?
What are the main factors contributing to the high selling price of these imported motorbikes in Vietnam?
The high selling price is primarily due to an import tax of 65-75%, a special consumption tax of 20%, and a value-added tax of 10%. Other fees like transport, storage, and registration also contribute.
Q.Are there any plans for the current high taxes and fees on imported high-engine displacement motorbikes to change?
Are there any plans for the current high taxes and fees on imported high-engine displacement motorbikes to change?
Yes, commitments from trade agreements Vietnam has signed will systematically reduce and abolish import tax on these vehicles from specific regions. This is expected to happen within the next eight years, lowering future prices.
Q.What concerns have insiders raised regarding the increase of high-engine displacement motorbikes in Vietnam?
What concerns have insiders raised regarding the increase of high-engine displacement motorbikes in Vietnam?
Insiders are concerned that the increase in these motorbikes on the roads could worsen traffic jams. This is because major cities do not yet have effective measures in place to reduce existing congestion.
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