VinFast, an automobile manufacturing unit of local conglomerate Vingroup, unveils Klara, its first e-scooter, at a launch event in Hanoi on Nov. 20, 2018.
HANOI/HO CHI MINH CITY, NNA - Electric scooters are proving popular in Vietnam’s two-wheeler market as the country moves forward with plans to ease traffic jams and curb air pollution in major cities through restrictions on motorcycles.
VinFast, an automobile-manufacturing subsidiary of property-to-retail conglomerate Vingroup, launched Klara, its first electric scooter, in late November, gaining a positive response from consumers.
"We had to stop selling Klara 20 days after its launch event (on Nov. 20) due to large orders," an employee at a VinFast showroom in Ho Chi Minh City told NNA. "We will resume receiving purchase bookings after the 2019 lunar new year."
Klara can travel 80 kilometers on one full charge and its maximum speed is 50 km per hour. It comes with two types of battery and in six colors.
The new model with a lithium-ion battery is priced at 57 million dong ($2,450) and the lead-acid battery version at 34 million dong. In the initial stage, the company is offering promotional prices -- as low as 35 million dong and 21 million dong for the respective models, according to VinFast.
Honda Vietnam Co.’s sporty Lead and Air Blade scooters carry price tags in a similar range, but Nhu Lan Anh, a 47-year-old woman in Hanoi, bought a Klara instead. "It is light with a beautiful design and helps me save on fuel costs" compared to conventional motorcycles, she said.
"Our e-scooter sales have exceeded expectations," a Vingroup spokeswoman told NNA.
The Hanoi municipal government has decided to completely ban motorcycles in the capital in 2030 to reduce traffic congestion and tackle air pollution, and Ho Chi Minh City reportedly will follow suit.
Do Linh, CEO of Pega, talks a business strategy in an interview in Hanoi on Dec. 10, 2018.
Do Linh, CEO of Pega, a local startup specializing in e-scooters, said in an interview with NNA that "VinFast’s Klara team members all came from Pega."
The startup, founded by a group of electrical engineers in 2012, fended off a takeover bid from VinFast. It now has more than 460 distribution bases across the Southeast Asian country, according to Linh.
"Vingroup is not a competitor," Linh said, noting that he expects the country’s largest private firm would help educate consumers. "Our competitor is Honda," he added, referring to the leading motorcycle maker in Vietnam.
Sales of electric motorcycles, scooters and bicycles in Vietnam were estimated at about 400,000 units in 2017, up 30 percent from the previous year, while more than 3.2 million gasoline-powered motorcycles were sold last year, up 4.8 percent.
The e-scooter can "run at a cost up to 33 percent less than gasoline motorcycles," Linh said. "Students are the main customers for e-scooters, and sales will peak from May to September as they enter school."
"I can use an electric bicycle in my high school time," Nguyen Nhat Linh, a 16-year old student in Hanoi, said. "Riding it requires no license."
Vietnamese consumers are quite price-sensitive due partly to widespread sale of counterfeit products in the domestic market.
"For short-term use, locals mostly prefer e-scooters," Akihiro Ueda, CEO of Terra Motors Vietnam, said in an email interview with NNA. Terra Motors, a leading Japanese electric motorcycle and tricycle maker, established the local unit in 2012 and has so far sold 25,000 units.
"We initially offered high-quality products at a high price, but Vietnamese customers are very price sensitive. Now we aim to offer quality vehicles at reasonable prices."
In 2014, Terra offered the A4000i, its first electric motorcycle in Vietnam, at 89.9 million dong, but after a month, it launched the A2000 at 25 million dong. Currently, Terra’s product lineup is priced from about 15 million dong.
"Customers are willing to pay around 15 million dong for an electric motorcycle and 10 million dong for an electric bicycle," an e-scooter dealer in his 40s in Hanoi said. "Many pick counterfeit models which are low in quality but cheap in price because customers tend to use electric vehicles only for a few years."
Sales of e-mobility vehicles are forecast to drop back to the 2016 level as cheaply priced knock-off products remain widespread, but industry officials believe that demand for electrified mobility will soar in the long run.
Pega’s Linh said that if his company makes good quality, low price electric two-wheelers, he believes retailers will have no further interest in selling fake products.
Pega has sold about 30,000 e-scooters so far this year and aims to sell 100,000 units next year by offering models at prices no higher than 20 million dong, he said.
VinFast has built an e-scooter plant with annual production capacity of 250,000 units in the northern port city of Hai Phong and is planning to release four more models in 2019.
The automobile unit of Vingroup is ready to double the capacity depending on "market reaction" while planning to open 30,000 to 50,000 electric vehicle-charging stations by 2020 in collaboration with the state-backed Vietnam National Petroleum Group and its trading arm PetroVietnam Oil Corp., the spokeswoman said.
"In future, the e-scooter segment will expand as people seek high-quality vehicles," said Ueda of Terra, which aims to seize a 10 percent share in the segment.
"I believe e-scooters can replace (gasoline) motorcycles. We are in the right position at the right time to penetrate the market," Linh said. (NNA/Kyodo)