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——【·Preface·】——»
The motorcycle, once popular in China, seems to be fading from the public eye, and few people are still paying attention to it except for a few motorcycle enthusiasts.
However, in many countries around the world, motorcycles are still the main force of daily travel and cargo transportation. This includes our neighbor Vietnam, a country with a huge demand for motorcycles.
You may have noticed that although motorcycles are in great demand in the Vietnamese market, Chinese-made motorcycles are not common there. However, in fact, in 1999, Chinese motorcycles once made their mark in the Vietnamese market.
With excellent performance and price advantages, it successfully beat the Japanese brand and ranked first in sales. At that time, Chinese motorcycles had a brilliant moment.
However, this glorious time did not last long. Just a few years later, Chinese motorcycles lost their market position, sales plummeted, and they were marginalized for a time. One wonders, what caused the fall of Chinese motorcycles?
Some industry experts have made a profound assessment of this: the failure of Chinese motorcycles is not because of Japanese competitors, but because of some human weaknesses in the market.
Nowadays, when buying motorcycles, local Vietnamese people are either willing to invest in high-priced Japanese motorcycles or choose Korean-made motorcycles. Domestic Chinese motorcycles are getting less and less attention. What is the reason for this?
——【·China motorcycle enters Vietnam.】——»
When talking about Vietnam, you may think of beautiful scenery and rich culture, but what you may not know is that Vietnam has a huge motorcycle market.
This market has attracted not only China, but also countries such as Japan and South Korea, and it began to make its mark decades ago.
The story dates back to the 80s, when a group of Japanese car companies such as Honda and Yamaha smelled Vietnam's fragrant cake early.
Jumping to the mid-90s, Japanese car companies almost dominated the Vietnamese motorcycle market by relying on excellent product quality and perfect after-sales service, and the market share was once as high as an astonishing 98%.
But at the same time, our motorcycle industry in China is also booming, but at that time we did not think about going to Vietnam to do things. It wasn't until around 1999 that some Chinese motorcycle manufacturers began to consider expanding their business to Vietnam.
Then our Chinese motorcycles took a different number of roads than Japanese cars. They hit the market with their price advantage, with a wholesale price of only about $700 and a retail price of about $1,200, equivalent to half the price of a Japanese car in the same class.
Especially in Guangxi, Yunnan and other places, those enterprises close to Vietnam have greater price advantages because of lower transportation costs. In just 2-3 years, Chinese motorcycles quickly conquered the market by relying on the price advantage, and the market share approached 80%.
Our Chinese brands, such as Loncin, Lifan, and Jialing, have become common scenery in the streets of Vietnam. In 2002 alone, China's motorcycle exports to Vietnam reached 1.9 billion yuan.
In the 90s of the 20th century, China's manufacturing industry was in full swing, and "Made in China" gradually became synonymous with global factories. At the same time, China's motorcycle companies have also passed a glorious golden period.
In the early 90s, Japan's Honda, Yamaha and other foreign motorcycle brands dominated the Vietnamese market, and the price of cars was high, and many Vietnamese people were discouraged.
But just when Honda and other companies were sitting on their success, Chinese brands such as Lifan and Jialing flocked to the Vietnamese market with a low price almost half of Honda, beating Japanese brands in one fell swoop and occupying most of the market share.
Chinese motorcycles are hot in Vietnam, and their market share has been expanding.
In less than 3 years, the share of Chinese motorcycles in the Vietnamese market soared from almost zero to 80%, and a large number of Chinese brands such as Loncin and Jialing began to establish sales networks in Vietnam, and their products became a street landscape.
This phenomenon was dubbed the "China shock" by some netizens, and even in 2002, the export of motorcycles from Chongqing to Vietnam alone reached 320 million US dollars, and Chinese motorcycles almost dominated the Vietnamese market.
——【Vietnam's huge motorcycle market】——»
Vietnam, the pearl of Southeast Asia, is a welcoming place when it comes to motorcycles. The country may not be as bright in terms of technology and infrastructure, but when it comes to motorcycles, Vietnam is unbeatable.
Imagine Vietnam's roads, which sometimes feel like an exciting cross-country race.
Potholes and mud can be hell of a challenge for a conventional car. The bicycle is too laborious, and you have to prepare for a sweat in advance. But fortunately, the Vietnamese have a right-hand man - motorcycles!
This small two-wheeled vehicle plays an indispensable role in life in Vietnam.
It is not only convenient, but also super accessible. A motorcycle can not only easily meet the needs of daily travel, even climbing hills.
You'll see a family sitting on a motorcycle, sometimes carrying things of all sizes, like a mobile warehouse, sometimes mattresses, sometimes a large bundle of cowweed. It's that convenient!
Even in Ho Chi Minh City, Vietnam's capital, you'll still see motorcycles swarming through the crowded streets, like bees swarming.
In 2022, Vietnam sold more than 3 million motorcycles, a figure that not only puts them in the third place in the world, but also the leader after China and India.
The number of motorcycles owned in Vietnam is even more staggering, as high as 45 million. Considering that the total population of Vietnam is less than 100 million, this is almost half a motorcycle per capita! Motorcycles are Vietnamese companions, closer than relatives.
In this country, you will find that a motorcycle is not only a means of transportation, but also a way of life, a part of the culture.
In Vietnam, buying a motorcycle is like buying a new home, especially for young couples. In their eyes, before the bride gets married, she must have a motorcycle, which is the "dowry" for the bride.
Therefore, motorcycles in Vietnam are not only a means of transportation, but also a symbol of life, these two-wheeled little guys, like Vietnamese superstars! Therefore, motorcycles have a huge market in Vietnam.
——【·From popularity to sad exit.】——»
Domestic motorcycle companies began to rush to enter the Vietnamese market, hoping to get a piece of this "delicious cake".
However, Vietnam's population is less than 100 million, which means that in the face of competition from Chinese companies, market demand seems unable to support such a large competitive team.
Like a racing race, the Chinese manufacturers who first entered the Vietnamese market are one step ahead, enjoying the sales frenzy, and profits are pouring in, which makes other manufacturers red-eyed.
As a result, more and more Chinese motorcycle manufacturers have decided to jump and follow the trend into Vietnam.
But Vietnam, despite the huge demand for motorcycles, has a limited total population. In the face of the "surging" of Chinese companies, even if Vietnamese want to buy motorcycles, the demand is not enough to meet so many manufacturers.
This has led to the dilemma of many manufacturers having to opt out of this market or lower prices to attract more customers.
However, leaving this "delicious cake" is not a wise choice. So the price war began, and motorcycle prices began to fall wildly.
In this fierce competition, manufacturers have chosen to reduce selling prices to attract more customers, resulting in further escalation of the price war.
The price of domestically produced motorcycles in the Vietnamese market continued to decline, eventually falling below the bottom line of several hundred dollars. Despite the increase in sales, quality problems began to occur frequently.
Vietnamese rely more on motorcycles than in the country, because motorcycles are not only a means of transportation for them, but also a means of livelihood for their families. However, low-price competition not only squeezes the manufacturing cost of motorcycles, but also leads to frequent quality problems.
More and more after-sales problems appear, and the after-sales service is not perfect, resulting in many consumers being unable to solve the problems after purchasing a car, or the after-sales service cost is too high.
This has led to a sharp decline in the reputation of domestic motorcycles in the Vietnamese market, and Vietnamese consumers would rather spend more money on Japanese motorcycles than domestic products.
Price competition not only leads to market chaos, but also to a sharp reduction in the profits of manufacturers. The Vietnamese government was forced to take measures to restore order to the market.
The government has set new motorcycle standards to improve market quality, but this has hardly any profit margins for domestic manufacturers.
In the end, domestic motorcycle brands had to opt out of the Vietnamese market, while Japanese motorcycle manufacturers maintained a strong position due to their focus on improving product quality.
The Vietnamese cleverly chose motorcycles of higher quality and longer lasting over those that had various problems in a short period of time, which also became the reason for the withdrawal of domestic manufacturers from the market.
——【Conclusion】——»
For Chinese companies to gain a foothold in the international market, they must keep in mind several important lessons.
First of all, when opening up the international market, do not blindly follow the trend. Too many enterprises in the same industry flood into the market, which may eventually lead to vicious competition, so enterprises should maintain rational judgment, carefully choose the market to enter, and avoid unnecessary competition.
Secondly, quality and brand building are crucial. Enterprises should pay attention to product quality and brand building, which is the key to consolidating market position. Short-term profitability should not damage the product and brand image, because once trust is lost, recovery will become extremely difficult.
Third, companies should develop long-term strategies to face fierce competition and counterattacks from foreign brands. Price wars may lead to short-term sales growth, but they may also hurt the long-term interests of companies.
Therefore, companies need to have a long-term strategy to deal with the crisis, focusing not only on market share today, but also on sustainable development in the future. The experience of Chinese motorcycle companies in the Vietnamese market is a clear case.
Although the price war may bring sales growth for a while, it also makes companies lose brand image and consumer trust. It will take time to rebuild brand image and restore trust, and Chinese new energy motorcycle companies should also learn this lesson to ensure a foothold in the international market.
The rise of Chinese enterprises is the result of accumulation and efforts, the world is a broad stage, Chinese enterprises should continue to work hard, I believe that they will be able to achieve greater success in the international market.
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