Motorbike manufacturers still raking in the profits Though the Vietnamese motorbike market is becoming saturated, manufacturers still make big profits with 3 million products bought every year.   The revenue of motorbike manufacturers in 2014 The improved living standards and infrastructure conditions in recent years have led to a sharp increase in the demand for cars. However, motorbikes remain the major transport for Vietnamese because of the reasonable prices and convenience. It is estimated that 45 million motorbikes were registered by the end of 2015, which is nearly a half of the population. According to a report of the Vietnam Association of Motorcycle Manufacturers (VAMM), 2.8 million products were sold in 2014, which represented an 18 percent decrease from the highest peak gained three years ago. Honda, the manufacturer from Japan, holds 70 percent of the market share with 1.91 million motorbikes sold, leaving Yamaha far behind. With 635,000 products sold, Yamaha holds 23.4 percent of the market share. Meanwhile, Piaggio sold 56,000 products. Reports showed that Honda Vietnam’s revenue in 2014, from both motorbikes and cars, was VND60 trillion, ranking 15th in Vietnam and the third among foreign invested enterprises, to Samsung Electronics Vietnam and Vietsovpetro. Analysts estimated that its revenue from motorbikes must not be lower than VND50 trillion, if noting that nearly 2 million motorbikes were sold in a year with the average price of VND25 million per product. Though the Vietnamese motorbike market is becoming saturated, manufacturers still make big profits with 3 million products bought every year. As for Yamaha Motor Vietnam, its revenue in 2014 reached VND18.5 trillion, or 1/3 of the Honda’s revenue from motorbikes. Meanwhile, Piaggio Vietnam had revenue of VND5.6 trillion, a modest figure if compared with the two manufacturers from Japan. With the high revenue, Honda tops motorbike manufacturers in terms of profit. According to VEAM, which contributes 30 percent of capital to Honda Vietnam joint venture, the post-tax profit of Honda Vietnam must not be lower than VND6.6 trillion in 2014, which means the profitability rate of over 10 percent. In Vietnam, the number of enterprises with higher profits than Honda is so modest that it ‘can be counted on the fingers of one hand’. Piaggio also had the profitability rate of over 10 percent with the post-tax profit in 2014 at VND690 billion. Meanwhile, Yamaha, the second largest manufacturer in Vietnam with revenue of VND18.5 trillion, only had profit of VND650 billion. Though Yamaha has revenue which is triple Piaggio’s, its profit is even lower than that of the manufacturer from Italy. Nikkei recently published a story with analyses on the challenges Honda Vietnam is facing as the Vietnamese motorbike market is getting saturated. It reported that the sales in Hanoi and HCM City were unchanged in the last five years, but demand is still relatively high in small provinces. CafeF