Lao motorbike manufacturer eyes regional market expansion
Lao motorbike manufacturer eyes regional market expansion
Laos has potential to become a motorbike distribution centre in the region thanks to its geographic location and close relations with neigbouring countri es, according to a businessman.
“Honda Motor Japan has assigned us to oversee the Honda motorbike market in Cambodia and Myanmar,” New Chip Xeng Group Vice President, Mr Saneu Chounramany said in an exclusive interview with Vientiane Times recently.
“The main reason for this is that Laos has good relations with these countries therefore it is possible for us to export the Honda motorbikes and products to these markets.”
New Chip Xeng Group received the exclusive rights from Honda Motor Japan to assemble Honda motorbikes and produce Honda spare parts in Laos since 1991 after the company saw market opportunities in Lao s.
Thanks to its success, the company has now been assigned to distribute the motorbikes and spare parts to Laos' neighbouring countries as well.
According to Mr Saneu, the export value of the Honda motorbikes and spare parts to Cambodia and Myanmar is still minimal. However, many believe this is a good starting point for Laos to become the motorbike distributing centre in the region.
Laos is located in the centre of the Mekong countries and if it plays a role as a distributing centre the cost of goods transportation to these markets will be cheaper.
The Lao government plans to build numerous roads and railways to connect with neigbouring countries so that it can turn itself from a landlocked country into the land-link in the region.
Mr Saneu sa id at present, the company is able to assemble Honda Wave 110s in Laos, with 25 percent of the raw materials being sourced domestically. The company has the capacity to produce about 50,000 motorbikes a year, increasing from only 5,000 units about 20 years ago.
“Our factory has just upgraded its production capacity so that it can produce motorbikes to meet the growing demand of the markets,” he said.
Mr Saneu also said that the company paid greater attention to improve human resources so that they can produce competitive goods.
When asked what the opportunities and challenges the company expects to face after the establishment of the Asean Economic Community at the end of this year he responded that Honda Motor Japan played an important role to help New Chip Xeng to run its business.
Mr Saneu added that if the mother company does not allow its subsidiaries to interfere in each other's markets then he is confident the company will survive.
