Motorcycle Market Slumps as Electric Vehicles Rise

The Vietnamese motorcycle market has been experiencing a steady decline in sales over the past five years. In the first quarter of 2024, production surpassed sales, with approximately 929,800 units produced but only 900,000 sold. Major brands like Honda and Yamaha have seen reduced sales despite offering discounts and incentives. Honda's sales, for example, fell by 14.2% in March 2024 compared to the previous year. 

To counteract sluggish sales, dealerships are offering substantial discounts, with some models being sold below the manufacturer's suggested retail price. Yamaha, for example, has provided various incentives, including vouchers and smartphones, to attract buyers. Suzuki has also slashed prices on certain models to stimulate demand. The overarching reasons for this slump include economic challenges, leading to tightened consumer spending, and the lack of new, compelling motorcycle models in the market. 

In contrast, electric vehicles (EVs) are gaining traction in Vietnam with companies like VinFast and Yadea are expanding their production capacities to meet the rising demand for electric motorcycles. 

VinFast is reported to have sold 72,469 electric motorcycles in 2023, capturing nearly 3% of the total motorcycle sales in the country. Yadea, which entered the Vietnamese market in 2019, has invested $100 million in a new production facility in Bắc Giang, with an annual capacity of over 2 million units. 

The shift toward electric vehicles is driven by rising fuel prices and the availability of new, affordable electric models with advanced features like fast charging and extended range. Additionally, the lower operating costs and reduced maintenance needs of electric vehicles appeal to consumers, making EVs an attractive alternative to traditional gasoline-powered motorcycles. 

Vietnam is now the fastest-growing market for electric two-wheelers in Southeast Asia, with a growth rate of 30% per year. The country accounts for 80% of the electric motorcycles produced in the region. Experts predict that with continued investment, Vietnam could become a leader in the electric motorcycle industry, comparable to established markets like India and China.