Honda Motorcycles: Vietnam Expansion

Honda Motorcycles

Honda Vietnam Co., Ltd. (HVN), a Honda motorcycle and automobile production and sales joint venture in Vietnam, today announced plans to expand the annual production capacity of its motorcycle production plant by 500,000 units in order to meet rapidly growing demand in Vietnam.

Since starting up motorcycle production in 1997, HVN increased its annual production capacity to 1.5 million units by 2008. With this newly planned expansion, HVN’s total motorcycle production capacity will reach 2 million units annually.

The capacity increase will be achieved through the expansion of the current plant. The total investment for this expansion is expected to be approximately US$70 million (approximately 6.3 billion yen*1), and is scheduled to become operational within the latter half of 2011.

Industry-wide motorcycle sales in Vietnam totaled 2.26 million units*2 in 2009, up approximately 20% over 2008, achieving steady growth while ranking as the world’s fourth largest motorcycle market after China, India and Indonesia.

In particular, sales of automatic transmission (AT) models are growing rapidly, reaching 750,000 units in 2009 (up approximately 70% over 2008). Since the introduction of Click, HVN’s first AT model in Vietnam, in 2006, Air Blade, a sporty AT model, and Lead, another AT model, were added successively in 2007 and 2009, respectively.

HVN determined the additional expansion with an eye toward the continuous increase in demand for AT models.

For 14 years since the establishment of the company in1996, HVN’s cumulative motorcycle production has reached 7 million units. HVN also achieved all-time record sales in 2009 for the 14th consecutive year since the company’s establishment.

HVN’s market share is also growing steadily and reached 63% in 2009. HVN will continue to enhance its product lineup in order to continue fulfilling the diversifying needs of its customers in Vietnam.

*1 Calculated based on the exchange rate of US$1 = 90 yen
*2 Sales results of four foreign-owned motorcycle makers in Vietnam.

HVN Motorcycle Plants

  First Plant Second Plant
Location Vinh Phuc Province (32km Northwest of
Start of production December 1997 July 2008
Annual production capacity 1 million units 500,000 units (currently)
1 million units (after the expansion)
Employment Approx. 3,800 associates
(as of April, 30 2010)
Approx. 1,800 associates
(as of April, 30 2010)
Approx. 6,700 associates (after the
Total floor space 44,000 m2 41,000 m2 (currently)
69,000 m2 (after the expansion)
Major production models Super Dream, Wave110, Future Click, Air Brade, Lead

Honda Vietnam Co., Ltd.

Establishment: March 1996
Location: Head office (plants): Vinh Phuc Province
Sales office: Hanoi, Ho Chi Minh
Capital: US$ 62.90 million
Capitalization ratio: 42% Honda Motor Co., Ltd.
28% Asian Honda Motor Co., Ltd.
30% VEAM Corporation
(Vietnam Engine & Agricultural Machinery Corporation)
Representative: President: Koji Onishi
Business: Production, sales, service of motorcycles and
Start of production: Motorcycle: December 1997
Automobile: July 2006
Production capacity:
Motorcycle: (currently) 1.5 million units annually (2 shifts)
(latter half of 2011) 2 million units annually

Automobile: 10,000 units annually (2 shifts)

Number of dealers: 456 dealer locations (as of May 2010)