Honda Motorcycles Boosts Production in Vietnam

Honda’s Vietnamese arm announced yesterday it plans to expand the annual production capacity of its motorcycle production plant by 500,000 units in order to meet rapidly growing demand in the country. The company has started motorcycle production here in 1997. Since then, it has increased its annual production capacity to 1.5 million units.

Now, the total motorcycle production capacity will reach 2 million units annually. This will be achieved by expanding the current plant thanks to an investment of approximately US$70 million. The plant is scheduled to become operational within the second half of 2011.

Previously the company said that despite the strong demand it was unable to scale up production as its factory in Vinh Phuc was running at full capacity.

Industry-wide motorcycle sales in Vietnam totaled 2.26 million units 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.

For 14 years since the establishment of the company, in 1996, 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.