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Honda’s long-held dominance in Vietnam’s motorbike market is facing a serious challenge as the government pushes forward with aggressive plans to phase out petrol-powered bikes in favour of electric vehicles — a move that could dramatically reshape the country’s $4.6 billion two-wheeler industry and strengthen homegrown EV producer VinFast.
In a directive issued in July, Prime Minister Pham Minh Chinh ordered that fossil-fuel motorbikes be banned from Hanoi’s city centre within a year, with a broader extension of the restriction scheduled for 2028. The policy, part of a wider effort to tackle severe air pollution in the capital, signals Vietnam’s determination to pivot toward sustainable transport.
But the swift pace of the transition has unsettled traditional manufacturers. Industry sources say Honda and other leading motorbike makers have lodged formal complaints to authorities, warning that the transition plan is moving “too fast” and could disrupt both businesses and consumers.
The effects of the policy are already being felt. Honda’s sales in Vietnam plunged nearly 22% in August compared to July — and were down 13% year-on-year — according to industry data following the government’s announcement.
Meanwhile, consumer sentiment appears to be shifting decisively toward electric mobility. A survey conducted in September by Tokyo-based market research firm Asia Plus Inc. found that more than half of respondents in Hanoi and Ho Chi Minh City intend to choose an electric motorbike for their next purchase, with 60% of Hanoi residents expressing a preference for EVs. The main motivation cited was government policy favouring electric vehicles.
Although Honda still commands an overwhelming share of the Vietnamese market — selling about 2.6 million motorbikes last year, over 80% of total national sales — the company now faces growing competition from VinFast, which delivered 71,000 electric bikes in 2024.
VinFast, backed by Vietnamese conglomerate Vingroup, stands to benefit significantly from the policy shift. While Honda is also developing electric models, the company has yet to disclose its EV sales figures for Vietnam.
The Asia Plus survey found that while 50% of respondents said they would consider buying a Honda for their next purchase, 32% expressed a preference for VinFast — a notable leap for the young local manufacturer. Currently, more than 80% of Vietnamese riders own a Honda, compared with just 4% who own a VinFast model.
“The rapid policy support, including phased bans, incentives, and public messaging, has significantly shaped consumer attitudes and could accelerate a market shift faster than traditional manufacturers anticipated,” said Kengo Kurokawa, head of Asia Plus.
Government officials did not respond to requests for comment, but authorities have repeatedly stated that the new measures are vital to addressing pollution levels in Hanoi — which frequently ranks among the world’s most polluted cities.
With Vietnam’s motorbike market projected to grow from $4.6 billion in 2025 to $6 billion by 2030, analysts say the race between Honda and VinFast may determine the future of mobility in one of the world’s most motorbike-dependent nations.
