Automobile and motorcycle analysts have previously said that Vietnam’s motorbike market is saturated, but they believe the electric motorbike market segment has great potential. A report from the Vietnam Register said that 3 million motorbikes are sold each year, while only 400,000 electric motorbikes were sold last year.
In order to take advantage of a great market opportunity, Vinfast is expected to launch its first electric motorbikes under the VinFast Klara brand by the end of 2018 and VinFast sales agents are making preparations to be operational on schedule.
VinFast, has said that it has a “step-by-step” manufacturing plan, in that in phase one, the company will produce 250,000 motorbikes a year and in subsequent phases will raise the output to 1 million units per year.
Other countries are also encouraging the use of electric motorbikes because they are environmentally friendly.
• China is offering tax incentives to the manufacturing sector with the ambitious plan of having 5 million electric motorbikes in 2020.
• Japan has said that it wants to lift electric motorbike proportion from 0.5% in 2017 to 5.3% by 2020 and that Japanese manufacturers are planning to showcase their new products during the Tokyo Olympics.
• South Korea has also said that it wants to lift the electric motorbike proportion from 0.5 percent in 2017 to 5.3 percent by 2020.
In Vietnam, the electric motorcycle market began to take shape several years ago with the presence of imports. These first imports were often small bikes that are primarily used by students to go from home to their school. The appearance of the new brand VinFast is expected to heat up the market and see larger models embraced by adult consumers.
However, analysts warn that it will not be easy to conquer Vietnamese hearts with electric motorbikes. VinFast motorbikes are expected to have a starting price of 30 million VND, a price similar to Japanese motorbike manufacturer Honda, one of the most well known brands in Vietnam.
Marketers note that a recent study from Frost & Sullivan found that in many countries, including Vietnam, price is not the reason behind the modest consumption of electric motorbikes. The biggest concerns of consumers is the safety of electric motorbikes, and the worry of what they should do if their batteries run out of electricity.
Aware of these concerns, manufacturers are rushing to improve their products and create brand differentials. Renault has launched a new version of Zoe, their electric motorbike that can run 400 kilometers after one battery charge. Another manufacturer, KYMCO has developed a new scooter model with an easily replaced battery.
VinFast knows that the key to creating consumer confidence in its products is in revolving the safety and reliability issues. The company announced that it will join with PV Oil and Petrolimex to implement a plan to set up 30,000 ~ 50,000 battery charge systems nationwide by 2020.
Once consumers know that they can get a fast recharge for their motorbikes VinFast expects purchases of its bikes to increase dramatically. They also believe that given time, that consumers will find that electric motorbikes are as safe as gas motorbikes and that Vietnam’s younger generation, which is very environmentally conscious will fall in love with their products. Time will tell.