Tuesday, February 26, 2002
Honda Vietnam fights Chinese copycats
REUTERS
HANOI: Japanese motorcycle maker Honda has been accused in Vietnam of using too many Chinese parts in a new cheap model designed to compete with a flood of copycats from China.
The charge, rejected by Honda, came from the Vietnam Association of Bicycles and Motorcycles, whose members assemble many of the hundreds of thousands of imitation Hondas made from Chinese parts sold in Vietnam each year.
It accused Honda on Tuesday of using a higher-than-declared proportion of cheap Chinese parts in its cut-price Wave Alpha model and said this amounted to unfair competition.
"Some of their commercial invoices show they use a higher per centage of cheap Chinese parts than the four per cent level they declare," Vinacycle's chief secretary Nguyen My said.
Honda introduced the Wave Alpha earlier this month at a price of 10.99 million dong ($726.85), about half cost of its regular models, and it is already helping it win back market share from the imitators.
My said the cut-price Honda had caused a slump in sales of competitors which had had to cut prices to boost demand.
Honda Vietnam's General Director Takehiko Nakajima said it abided by its component quota. "Honda Vietnam does not use more parts imported from China than we have announced," he said.
Nakajima said the new model was cheap but measured up to Honda quality standards, unlike the imitations.
He said it was aimed at competing head to head against copies from China, which appear identical to real Hondas, except in name -- one is sold under the brand name "Hongda" -- but use lower quality components.
Buyers of such machines often buy Honda badges to make their bikes indistinguishable from the real thing.
The controversy in what has become one of Vietnam's major industries erupted just ahead of visit to Vietnam on Wednesday by China's President Jiang Zemin.
There are currently more than eight million motorcycles on the roads in Vietnam and 1.8 million were sold last year alone -- or nearly 5,000 every day.
The Chinese imports, which only began appearing in 1998, were priced at a half or a third of the price of previous genuine Honda models and have been so successful they now dominate the local market.
Honda Vietnam, a joint venture between Japan's Honda Motor and Vietnam Engine and Agricultural Machinery, has filed complaints to protect its copyrights, but with little practical success.
"Now Honda has less than 20 per cent of the market and Chinese bikes of all kinds almost 80 per cent," My said. "It's a complete turnaround situation for Honda in only a few years."
Before the Chinese influx, Honda so dominated the market that its name still often substitutes for the word "motorbike" in everyday conversation.
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