Thursday, March 14, 2013
Japanese Motorbikes In Myanmar: Trying To Make A Dent
BANGKOK (Nikkei)--Japanese motorcycle makers have some catching up to do in Myanmar, where cheap, illegally imported Chinese models have overrun the market.
Yamaha Motor Co. (7272) and Honda Motor Co. (7267) are trying to make inroads into the Southeast Asian nation of 62 million people. The government's tentative steps toward democracy and economic reform have caught the eye of multinationals.
At Yamaha's main-street showroom in Mandalay, Myanmar's second-biggest city, a man buys a set of wheels for 900,000 kyat, or about 90,000 yen.
"I can use a Japanese motorcycle for four or five years without any major repairs," he says.
"And I probably won't have trouble finding parts," he adds before motoring away.
Mandalay has become the front line in the battle for motorcycle market share since a ban on riding in Yangon, the most populous city, took effect around 2000, after biker thugs attacked a senior army officer.
Seventy percent of Myanmar's annual demand for motorbikes, about 900,000 units, is concentrated in Mandalay, Yamaha estimates. The company opened its first dealership there in October 2011. Honda followed suit last October. They offer bikes assembled in Thailand, Indonesia and other neighboring countries.
But neither has been able to sell even 100 a month. Mandalay's streets belong to Chinese-made bikes with names unfamiliar to anyone besides locals: Kenbo, Luojia, Zongshen.
Japanese motorcycle makers began exporting to Myanmar in the mid-1990s, only to be forced to stop by Western sanctions imposed in 1997. Chinese rivals filled the vacuum with models selling for just a third of what Yamaha and Honda charged.
Developing countries used to be considered primed for motorcycle market growth when per-capita gross domestic product reached 1,000 dollars; now the threshold is half that, thanks to the influx of low-priced Chinese models. Motorization has begun in Myanmar, where GDP per head reached 832 dollars in 2011.
Annual demand has already exceeded Malaysia's. Myanmar now ranks alongside the Philippines, the world's 12-largest motorbike market. In terms of population, Myanmar is not far behind Thailand. It may eventually rival its neighbor's motorbike market -- the fifth-largest, at 2.15 million units.
Cheap Chinese copies of Japanese motorcycles once dominated the Vietnamese and Indonesian markets as well, but people there soon went back to the real thing.
"We will build a sales network beyond Mandalay and set ourselves apart with our service," says Koji Onishi, who heads Honda's Yangon office.
(The Nikkei, March 14 morning edition)