The ministry of industry the institute for industry policy and strategy
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- Fig. 3-1. Thailand as the Benchmark: Motorcycle Ownership
- Tab. 3-1 Stock projection from the person-to-motorcycle ratio
- Tab. 3-2 Stock projection from the motorcycle-to-household ratio
- Tab. 3-3 Stock projection from the urban and rural person-to-motorcycle ratios
- Fig. 3-2 Alternative Forecasts for Motorcycle Stock
- Fig. 3-3 Motorcycle Density and Stock-to-flow Ratio, 2005
Chapter 3 Demand Forecast 3-1. Benchmark and assumptions At present, the Vietnamese motorcycle market is booming, and strong demand is expected to continue in the near future. However, as the domestic market approaches the saturation point, increases in the ownership and sales of motorcycles are likely to slow down. In Vietnam, the urban market and the rural market must be considered separately. The former is already near saturation (2.16 persons per motorcycle), while the latter has less motorcycles at present (6.14 persons per motorcycle) with more room to grow before saturation is reached. For projection purposes, we take Thailand as the benchmark. Past and current Thailand has many similarities with Vietnam regarding climate and culture, road traffic situation, and economic development patterns. Vietnam is expected to reach the per capita income level of current Thailand by 2020 or earlier. Thailand has the population of 65.4 million and the motorcycle stock of 22.4 million in 2005, which means that there is one motorcycle for every 2.9 persons (Fig. 3-1). Moreover, the urban-rural gap is small—there was one motorcycle for every 2.5 persons in Bangkok, and for very 3.6 persons in the rest of Thailand (2003 data)8. This situation can be regarded as reasonably close to saturation at the national level. In the future, motorcycle production in Thailand will mainly satisfy replacement demand and exports, rather than expanding new domestic market segments. In any country, the person-to-motorcycle ratio of between 2 and 3 is the maximum limit, since that implies almost everyone, except very young, old, and weak, has a motorcycle. Fig. 3-1. Thailand as the Benchmark: Motorcycle Ownership 
Source: See footnote 8. Regional division is unavailable for 2004 and 2005. In projecting the motorcycle market in Vietnam, it is assumed that relatively high economic growth will continue from present to 2020. People’s living standards will rise, and urbanization will also proceed rapidly. Up to 2010, no significant completion of large urban transport infrastructure is expected while rural roads will continue to be upgraded gradually. For these reasons, popular demand for motorcycles is likely to be robust. The saturation point of motorcycles for the country is expected some time between 2015 and 2020. However, even after saturation, Vietnamese people may continue to use motorcycles in various travel needs, if not as intensively as in urban areas at present. We first forecast motorcycle stock demand (circulation) up to 2020 using three alternative approaches. They all yield very similar results. After that, flow demand (annual sales) is projected under different assumptions. 3.2 Stock demand Approach 1—Persons per motorcycle In this approach, it is assumed that the person-to-motorcycle ratio will reach 3.67 by 2010 and about 3 by 2015, after which this ratio stabilizes. This development is considered to be consistent with the expected GDP growth, construction of urban and rural infrastructure, and people’s attitude in the coming years. Tab. 3-1 Stock projection from the person-to-motorcycle ratio
Approach 2—Motorcycles per household, with urban-rural gap The saturation point in terms of household ownership of motorcycles is considered to be about 2 motorcycles per family at the national level. By 2020, the average urban household is expected to have 4-5 family members and own 2.65 motorcycles, while the average rural household is expected to have 6-7 family members and own 1.51 motorcycles. Saturation at the national level will begin from 2015, but even after that, there will be a shift of motorcycle use from urban to rural families. With these assumptions, the following projection is produced. Tab. 3-2 Stock projection from the motorcycle-to-household ratio
Approach 3—Persons per motorcycle, with urban and rural gap Recent data confirm that, while urban areas have high density of motorcycles per person, the speed of increase in motorcycle ownership tends to slow down. The annual increase of motorcycles in the five large cities under central administration fell from 666,800 in 2001 to 323,600 in 2005. Similarly, the corresponding figures for the next tier of economically dynamic cities were 166,500 in 2001 and 125,300 in 2005. By contrast, the annual increase in all other areas slightly increased from 1.192 million to 1.264 million during the same period. From this, it is assumed that, in the period 2006-2015, urban motorcycles will continue to increase by 500,000 and rural motorcycles by about 1 million annually. After that, growth will slow down in both areas for a number of reasons, including the availability of other transport modes (rails, cars, buses, etc.), leveling off of urban travel demand, and improvement of rural life and rural infrastructure. Eventually, increases of motorcycles in both areas are expected to converge to a lower level, say 200,000 per year. Tab. 3-3 Stock projection from the urban and rural person-to-motorcycle ratios
The results of these three approaches are fairly similar, with the stock demand for motorcycles of about 24 million in 2010, about 31 million in 2015, and about 33 million in 2020 (Fig. 3-2). The above projections show that, even if other transport modes develop, Vietnam will continue to be a country that uses a large number of motorcycles into the foreseeable future. A good motorcycle policy is therefore required to respond to this market demand. Fig. 3-2 Alternative Forecasts for Motorcycle Stock  
3.3 Flow demand Based on the stock demand projections above, annual demand for new motorcycles is now forecasted. In general, the ratio of motorcycle stock to annual sales depends on two factors. First, a period of dynamic growth of the motorcycle market is associated with a relatively low stock-to-flow ratio of 5 to 10. In such a country, annual sales are large compared with the stock, because there is significant new demand (by first-time users) in addition to replacement demand (by existing users). Currently, this situation is observed in China (stock-to-flow ratio of 5.4), India (6.6), Indonesia (7.1), Thailand (7.4) and Vietnam (8.8). By contrast, in a more mature market, where there is only replacement demand and little new demand, the stock-to-flow ratio tends to rise to 15-20. Taiwan (20.5) and Malaysia (17.9) belong to this group9. This domestic market dynamics can explain the long-term trend in the stock-to-flow ratio. Fig. 3-3 Motorcycle Density and Stock-to-flow Ratio, 2005 
Source: See footnote 9. Another factor is temporary shocks. For example, in Thailand, the collapse of domestic market in the aftermath of the Asian financial crisis pushed up this ratio to an abnormally high level in 1998, from which the country recovered only slowly. In Vietnam, a large inflow of inexpensive “Chinese” motorcycles artificially reduced this ratio during 2000-2002. Such temporary shocks are inevitable in any market economy under globalization. However, since they are unpredictable and do not last forever by definition, we ignore them in our projection. Directory: teacher teacher -> Lesson #11: Words with teacher -> Rice plantation teacher -> Chapter Six English Colonies in North America (1607-1732) teacher -> 75 Summer Writing Prompts Weekly Writing Prompts teacher -> Our 10 Greatest Natural Disasters teacher -> Rise of industry teacher -> Student enquiry teacher background information teacher -> Title: a climate Conundrum. (cover story) Authors teacher -> Carolyne Britt happily taught Summer Camp this year and had a blast! She found working with the little ones and clay for the first time so inspiring and the projects we did together were so much fun teacher -> Possible Online Discussions Download 1.72 Mb. Share with your friends:
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