Honda’s grip on Vietnam motorbike market looks shaky on EV switch

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By Francesco Guarascio and Phuong Nguyen

HANOI (Reuters) -Honda’s dominance of Vietnam’s motorbike market is under threat as Hanoi pushes for a rapid switch to electric vehicles in a boost to local EV maker VinFast, according to industry data and the findings of a consumer survey.

Vietnam’s Prime Minister Pham Minh Chinh issued a directive in July that bans after 12 months fossil-fuel-powered motorbikes from the centre of the capital Hanoi and extends the scope of the ban from 2028.

Honda and other motorbike makers have written to authorities criticising the changes as being too fast, according to two people with direct knowledge of the matter.

The Japanese company’s sales in Vietnam fell by nearly 22% in August from July, a 13% drop on the year, after the government’s ban was announced, industry data showed.

Partly in response to the government’s policies, residents of Hanoi and Ho Chi Minh City, Vietnam’s two largest cities, plan to choose an electric model for their next motorbike purchase, according to a survey conducted in September by market research firm Asia Plus Inc. 

Representatives for Honda in Vietnam did not reply to requests for comment.

The Vietnamese ministry responsible for transport did not reply to a request for comment but the government has said the new measures were needed to address air pollution in Hanoi, which at times tops the list of the world’s most polluted cities.  

LION’S SHARE OF THE MARKET

Vietnam’s two-wheeler market stands at $4.6 billion in 2025 and is projected to reach $6 billion by 2030, according to market research firm Mordor Intelligence.

Petrol motorbikes dominate Vietnam’s market, one of the world’s largest. Honda sold 2.6 million vehicles in the country last year, more than 80% of the total. VinFast said it delivered 71,000 electric motorbikes.

Honda, the world’s largest manufacturer of motorbikes, is also producing electric models but it is not clear how many it sells in Vietnam.

Of the 200 people polled in the survey, 54% said they would choose an electric motorbike for their next purchase, and only 24% would opt for a gasoline model. The main reason given for preferring an electric option was the government’s policies to endorse EVs.

In Hanoi, the share of interviewees saying they would choose an electric motorbike was 60%.

Half of the poll respondents said they would consider buying a Honda motorbike and 32% said they would opt for a VinFast model. More than 80% said they already owned a Honda vehicle and 4% said they had a VinFast motorbike.

“The rapid policy support, including phased bans, incentives, and public messaging, has significantly shaped consumer attitudes and could accelerate a market shift faster than traditional manufacturers anticipated,” said Kengo Kurokawa, the head of Asia Plus.

(Reporting by Francesco Guarascio; Additional reporting by Phuong Nguyen in Hanoi and Daniel Leussink in Tokyo; Editing by Muralikumar Anantharaman)