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|Locally-invested Son Ha Group is teaming up with German giant Bosch to establish a new factory and take part in the mostly untapped electrical motorbike market in Vietnam (photo source: congthuong.vn)|
The deal, signed last week, will see Bosch’s expertise in vehicle technology offer comprehensive powertrain, mobility, and electrification solutions.that aim to contribute to low-carbon mobility in Vietnam. The factory in the northern province of Bac Ninh is expected to come online in 2021 to churn out 20,000-30,000 units per year.
Hoang Manh Tan, director of Son Ha Development of Renewable Energy JSC, a member of Son Ha Group, explained to VIR that the company has prepared for the deal for over a year.
The trend of replacing traditional motorbikes with electrical ones promises to bring a green and clean look to major cities around the world as well as provide a better living environment for residents.
Guru Mallikarjuna, general manager of Bosch Vietnam, said during the signing ceremony, “Vietnam is an emerging market with demand for persistent growth in eco-friendly mobility solutions.”
After researching and analysing the market, as well as evaluating existing potential, Son Ha decided to follow the development trend and invest in manufacturing and assembling of electric motorcycles.
Tan did not deny that the COVID-19 pandemic also affects his group’s plans in the short term. However, he expressed optimism over recent trends in Europe, where a change of habits has led to a 300-per-cent increase of electric motorcycle and bicycle sales.
Tan estimates that the price of Son Ha’s vehicles will be about 20-40 million ($870-$1,700) per unit. However, the competition is already present as Son Ha shares the same market segment with VinFast which is operating a factory in the northern port city of Haiphong with a capacity of 250,000 units per year, planning to increase to 500,000 units annually.
Despite the local competition, Son Ha also shows an ambition to export its products to the overseas market.
Last month, another local electric bike manufacturer, PEGA, announced a $3-million deal with its partners in Cuba, despite the ongoing pandemic, marking the first time that Vietnam’s electrical motorbikes are to be exported overseas.
Commenting on Son Ha’s endeavour, PEGA CEO Doan Linh said that it is great news for Vietnam’s motorbike market, which is dominated by gas-powered two-wheelers from Honda, Yamaha, and Vespa, among others.
Insiders expect that the participation of newcomers will boost the domestic electrical vehicle sector and further enhance the country’s plans for sustainable development.
Tan from Son Ha suggested that, besides tax incentives and other support, the government should have specific regulations to encourage and develop the charging network for electric vehicles. “It is necessary to have a common ecosystem so that all electrical vehicles can take advantage of these charging points everywhere. Then, the trend of converting gas-fuelled vehicles into electrical ones becomes inevitable,” he said.
Currently, the motorbike market in Vietnam is dominated by gasoline-powered vehicles, accounting for nearly 95 per cent of total volume. However, in recent years, statistics from the Vietnam Association of Motorcycle Manufacturers (VAMM) show that there is an underground shift, with a significant increase in e-motorbikes and bicycles.
The VAMM – which includes the five members of Honda Vietnam, Piaggio Vietnam, Vietnam Suzuki Corporation, SYM Vietnam Company, and Yamaha Vietnam – boasted an accumulated sales volume of 731,000 vehicles for the first quarter of 2020, a decrease of 3.03 per cent in comparison to the same period in 2019. However, as of now there is no available sales data for electrical motorbikes.
Meanwhile, Vietnam is also tightening its motor vehicle regulations and setting emission standards for new means of transport, along with a roadmap to control emissions for tens of millions of older cars and motorcycles due to air quality concerns.
According to a report by the Vietnam Environment Administration, the number of personal vehicles is increasing strongly in the larger cities. Specifically, in 2008, Hanoi only had 2.2 million vehicles, whereas by 2017 it had already increased to six million vehicles.
At present, on average, Hanoi sees about 27,000 newly-registered cars and motorbikes each month, while Ho Chi Minh City also shows a high growth in personal vehicles, with the number of motorbikes rising by 10-15 per cent each year.