Motorcycles and scooters are ubiquitous in Southeast Asia as congested cities and a growing middle class are pushing demand for two-wheeled transportation. As a result, many of the world’s leading motorcycle builders are expanding in the region.
Italy’s Piaggio Group, famous for its Vespa scooter, opened a new engine factory in the Vinh Phuc industry park near Hanoi in March. It will initially build 200,000 scooter engines a year, eventually ramping up to 300,000. Robert Colaninno, Piaggio Group chairman and CEO, said the plant builds on the company’s success in Vietnam since 2009.
“The results reported by the Piaggio Group last year validate our global growth strategies, which identify Asia as the key to Group growth in the next few years, by virtue of the rapid urbanization of the main Asian nations and rising consumer purchasing power,” Colaninno said at the plant’s opening.
The new plant is adjacent to the Piaggio Vietnam vehicle assembly plant, which handles all welding, painting and final assembly operations for the Vespa, Liberty and Fly scooters produced by the Group’s Vietnamese subsidiary. The Piaggio Vietnam industrial complex in Vinh Phuc also houses an R&D center for the two-wheeler sector — the first R&D unit set up by the Piaggio Group in Asia. Piaggio Vietnam has built more than 180,000 two-wheelers since 2009.
“The engine plant will also produce a new global range of scooter engines developed by our Group for manufacture in Italy, Vietnam and India,” Colaninno said.
Market Leaders Rev Up in Vietnam, Indonesia
Honda is also growing its Vietnam footprint. Honda Vietnam Co. is building a third motorcycle factory and plans to expand its total annual production capacity by 500,000 units to satisfy the growing Vietnamese market. Honda Vietnam began motorcycle production in 1997, and by 2011, reached a total annual production capacity of 2 million units. Honda expects the $120-million third plant to be operational in the second half of 2012, in Ha Nam Province, approximately 40 km. (25 miles) south of Hanoi. Honda says the Vietnam motorcycle market reached 3.7 million units in 2011, making it the world’s fourth largest motorcycle market behind China, India and Indonesia. Honda claims 61 percent of the Vietnamese market.
Indonesia’s motorcycle market reached more
than 8 million units in 2011.
Honda’s joint venture in Indonesia, Astra Honda Motor, is also expanding. It plans to build its fourth plant in that nation with a production capacity of 1.1 million scooters. That will bring the joint venture’s total capacity in Indonesia to 5.3 million units. Honda says the plant, which will be built in Bukit Indah Industrial Park about 70 km. (43 miles) east of Jakarta, will begin production in the fall of 2013 and employ 3,000.
In July 2010, Honda announced what it said would be its fourth plant on the grounds of its third plant in Bekasi, located about 33 km. (21 miles) southeast of Jakarta. That project instead became an expansion of the third plant, which pushed capacity at that site to 4.2 million units.
Suzuki‘s Indonesian subsidiary, Suzuki Indomobil Motor, plans to build a new motorcycle plant to serve the Indonesian market. Suzuki currently has two plants in Indonesia with production capability of 1 million motorcycles and 80,000 automobiles per year. With the acquisition of the new site in an industrial zone near Jakarta, Suzuki will be capable of consolidating the plants and enhancing production capability in the future.
Suzuki is also building a motorcycle factory in the Philippines, where the market is also growing rapidly. The new plant is nearing completion in the Manila suburbs in Carmelray Industrial Park I, with an annual production capacity of approximately 200,000 units. Production is scheduled to start in June.