Vietnamese motorbikes discounted to stimulate demand during COVID-19
Due to the impact of the COVID-19 pandemic and social distancing in many provinces and cities across the country, the consumption of the Vietnamese motorcycle market has dropped sharply in the last five months.
Therefore, many car manufacturers and motorbike dealers have implemented promotions and discounts to stimulate market demand, but the growth is forecast to be difficult.
The business data of Honda Viet Nam, which accounts for 80 per cent of the country’s motorcycle market share, showed that its motorbike sales decreased by 14.5 per cent last month compared to July and decreased by 43.9 per cent over the same period last year.
This is the fourth consecutive month that Honda's motorbike sales have declined.
Motorcycle sales began to decrease from May, coinciding with the fourth outbreak of COVID-19 and the social distancing in many provinces and cities across the country to prevent and control the pandemic, which causes the demand for motorbikes to drop.
August and September is usually the time when the motorbike market is very eventful when students buy motorbikes as a means of transportation to prepare for the new school year and many graduates upgrade their motorbikes to go to work, but this year it is quite the opposite.
In order to stimulate market demand in the context of the pandemic, many motorcycle manufacturers in Viet Nam including Yamaha, Honda and Suzuki, have continuously implemented promotions and reduced prices to attract customers in recent months.
In addition to the companies’ promotions, dealers are even more aggressive in reducing the selling price of many models below the suggested retail price of the producers.
Some motorbike dealers in Ha Noi said the reason that dealers strongly reduced the selling price was due to the complicated situation of the COVID-19 pandemic, the implementation of social distancing in many provinces and cities across the country. People's demand for motorbike shopping has declined significantly.
Especially, big cities like Ha Noi and HCM City, which are the localities that consume the most motorbikes, are implementing social distancing, so the number of vehicles consumed is almost zero.
This is also the reason for the sharp drop even though producers and agents continuously launched incentive programmes to attract customers.
Not only that, although factories have moderate production activities, but with monthly production output, if prices are not reduced for consumption, product inventory will be very high and warehousing is also a problem. Dealers also adjust prices to support capital flows.
Experts said that the pandemic situation has been complicated since the end of April, in addition to complying with social distancing to prevent the pandemic, most people had to save money as they could not go to work.
The reduction in prices was also very unlikely to boost sales, as evidenced by the continuous decline in car sales from May so far, said experts.
Moreover, in addition to choosing traditional petrol motorbikes, consumers are also tending to switch to more eco-friendly electric motorbikes with affordable prices of brands such as VinFast or Pega, which partly makes the sales of gasoline-powered motorbikes decline, forcing this market to reduce prices to compete.