TABLE OF CONTENTS
1. Introduction.......................................................................................1
2. Financial performance......................................................................2
3. Competitive position.........................................................................4
The major features of Vietnam's automobile industry..........................4
Honda Vietnam's performance in comparison to competitors..............4
Evaluation of Honda Motor Vietnam's position....................................7
4. Non-financial performance..............................................................8
Environmental aspect............................................................................8
Social aspect..........................................................................................9
Governance..........................................................................................10
5. Conclusion........................................................................................11
Recommendation.................................................................................12
References......................................................................................................14

i


1. Introduction
Honda Vietnam, founded in 1996, is a joint venture between Honda
Motor Company (Japan), Asian Honda Motor Company (Thailand), and
Vietnam Engine and Agricultural Machinery Corporation, with motorcycles
and vehicles as its primary products (Anh, 2018). Honda Vietnam has been
present in Vietnam for about 30 years and has grown to become one of the top
firms in the area of motorcycle production as well as a prominent vehicle
manufacturer in the Vietnamese market. Recognizing that motorcycles remain
the primary mode of mobility in Vietnam, Honda Vietnam strives to offer
consumers high-quality motorcycle goods at competitive costs built in
environmentally friendly facilities.
Honda

Vietnam(HVN)

has

consistently

spent

establishing

manufacturing facilities to fulfil the market's rising demand since entering the
Vietnamese market. In metropolitan areas, motorcycles account for over 90%
of all vehicles (Chris, 2022). Honda Vietnam has six plants that manufacture
and assemble bikes and motorbike components. HVN debuted 18 models in
2022, with 07 being wholly new variants first formally offered in the Vietnam
market. The famous automobile range, which includes digital cars, scooters,
and miniature clutches, remains the focus of HVN's goods. The continuous
introduction of models incorporating cutting-edge technologies, such as the
new generation intelligent engine eSP +, traction control system, Honda
SMART Key smart lock system, Bluetooth connectivity (SH150i; SH350i),
and ABS anti-lock braking system, has contributed to the product range's
completion.
Motorcycles are still the primary mode of transportation in Vietnam.
However, several estimates predict that the Vietnamese motorbike industry
will be saturated by 2025(Team, 2022). Because for three years in a row, total
market sales fell precipitously. Moreover, the COVID-19 epidemic has
1


affected the whole market, this reduction is unavoidable. There is also supply

chain disruption owing to raw material shortages and price inflation. The
facts, however, do not lie about the Vietnamese motorbike market's success in
the first six months of 2022. Statistics for the first and second quarters of
2022 show that VAMM members sold 753,571 automobiles, a 7.43% increase
over the same time in 2021. VAMM's statistics are derived from the sales of
digital cars, scooters, clutches, and sports vehicles by five-member
automobile manufacturers: Honda, Piaggio, Suzuki, SYM, and Yamaha.
Meanwhile, the world's most prominent motorbike rating website,
reported that the whole Vietnamese
market sold 1,820,727 units in the first six months of the year, a 6.7%
increase over the same time last year. According to VAMM’s data, the
electric vehicle category is expected to contribute 10% of industry sales in
2021 (up from 2.9% in 2018) and is the world's second-biggest market.
This research looks at Honda Vietnam's financial performance,
competitive position, and non-financial performance. As a consequence, this
study assists readers in better understanding the elements influencing
company performance and offers ideas to increase Honda Vietnam's
operational efficiency.
2. Financial performance
The debt-to-equity ratio demonstrates how much of a company's
overall debt and equity structure is utilized to fund its operations. Because the
business's activities are significantly reliant on loans, including several shortterm obligations with payment cycles of less than a year, the higher this
percentage, the greater the risk. The debt-to-equity ratio may be computed
using the following summary from Global Honda Motor Company's financial
statements:

2


Year:


2017

2018

2019

2020

2021

2022

Debt

36.17

34.94

36.93

40.07

40.53

38.63

Equity

69.57


74.11

76.98

75.67

87.4

88.46

0.52

0.47

0.48

0.53

0.46

0.44

D/E

Source: (Xuan, 2022)
With debt-to-equity ratios of less than one throughout 2017-2022, the
firm's total debt is less than the equity. The company's activities are primarily
funded by the owner's capital investment and the accrued after-tax profit over
time. This demonstrates that the Enterprise is financially self-sufficient and

does not need excessive borrowing. Consequently, Honda is under a less
financial strain, and interest and late payment charges are reduced, resulting
in improved business outcomes.
Figure 1: D/E ratio of Global Honda Motor Company from 2017-2022
0.60
0.50
0.40
0.30
0.20
0.10
0.00

2017

2018

2019

2020

2021

2022

D/E ratio

At the end of August 2022, Vietnam Engine and Agricultural
Machinery Corporation(VEAM) officially disclosed the financial results for
its activities from January 1, 2021, to January 23, 2012. As mentioned above,
the number of dividends and earnings distributed by VEAM throughout the

period is 12,117 billion dongs, which is the most remarkable figure in this
report. The primary contribution is over 12,117 billion dongs in dividends,
3


and the profit split from these joint ventures is 9,565 billion dongs shared by
Honda Vietnam Company, Vietnam's biggest motorbike producer today.
Thus, using simple mathematics from the VEAM findings, it is reasonable to
predict Honda Vietnam Company's profit after tax in 2021 in Vietnam to be
over VND 28,800 billion, above the 1.2 billion USD level.
3. Competitive position
The major features of Vietnam's automobile industry
The Vietnam Association of Motorcycle Manufacturers (VAMM)
officially revealed the business results of VAMM 2020 members on January
14, 2021. Accordingly, overall sales in 2020 were more than 2.7 million
automobiles, a 16.66% reduction from 2019. The five members (Honda,
Piaggio, Suzuki, Yamaha, and SYM) sold more than 7,400 automobiles daily
in Vietnam in 2020. Thus, the number of motorcycles sold per day declined
by around 1,500 cars per day compared to 2019(Nguyen, 2022).
Looking back at past years, the number of motorcycles in Vietnam
increased yearly till 2018, indicating that Vietnam is a "fertile" market for
motorcycle producers. However, beginning in 2019, the number of
automobiles sold in Vietnam fell immediately before the onset of the Covid19 pandemic. And 2020 was a lousy year for Vietnam's motorbike industry.
Motorcycle sales, in particular, fell, with just 2.7 million units sold, a lower
figure than in prior years.
Honda Vietnam's performance in comparison to competitors
Despite the fall in sales, Honda continues to dominate the Vietnamese
motorbike market. Notably, Honda continues to "outsell" other companies in
Vietnam in terms of sales and the number of motorcycles sold in 2021.
According to Statista, Honda's automobile sales accounted for more than 76%

of all vehicles sold in Vietnam. Honda's earnings in 2021 accounted for
77.1% of the overall profit for automobile makers in Vietnam.
4


Figure 2: Vietnam motorbike market share 2021

Source: iMotorbike
Honda Wave Alpha and Honda Vision are the two models with the
most significant sales volume, according to Hanh(2021). These two models
account for around 47% of Honda's sales. According to the graph above,
Suzuki and Piaggio sell 1.1% and 0.5% of all motors sold. However, as seen
in the table below, the sales split between Piaggio and Suzuki has shifted
somewhat. It demonstrates Piaggio's concentration on the higher-end category
and a higher selling price. As a result, even though the number of motobikes
sold was lower, Piaggio's sales increased by 0.2%.

5


Figure 3: Revenue ratio of VAMM members

Honda's overall assets in the Vietnamese market exceed 40,000 billion
VND, and its equity exceeds 20,000 billion VND. Honda has established a
distribution network in Vietnam that includes over 800 Honda-authorized
service and car dealerships and 107 repair facilities. Other brands, on the
other hand, have total assets of just a few thousand billion dongs, such as
Yamaha, which has more than 6,300 billion dongs, Piagio, which has more
than 3,700 billion dongs, and VMEP, which has more than VND 2,700
billion.

It is easy to observe that Honda Vietnam's high earnings have far
outweighed the amount of money this company spends in Vietnam. Yamaha
came in second with a revenue of 16,870 billion dongs in 2021, accounting
for barely one-sixth of Honda's sales. Profit after tax was more than 2,100
billion dongs, a modest rise from 2018. Yamaha is well-known for vehicles
such as the Exciter, Sirius, and Jupiter.

6


Figure 4: Daonh thu các hãng sản xuất xe máy tại Vietnam

Piagio placed third in revenue, with almost 6,700 billion VND in 2021,
a 13% increase over 2020. Profit after tax increased by more than 20% to
more than 700 billion VND. Suzuki's income is around 3,000 billion VND per
year, and VMEP/SYM is approximately more than 2,000 billion VND per
year. Only VMEP has made a loss in Vietnam during the last three years, with
a projected loss of roughly 300 billion dongs in 2021.
Evaluation of Honda Motor Vietnam's position
Despite having to deal with a severe Covid-19 pandemic, as well as the
effects of economic and political fluctuations and the global semiconductor
shortage crisis, by the end of the fiscal year, 2022 (from April 2021) - March
2022), Honda Vietnam Company has achieved many successes, maintaining
its market position in both the automobile and motorcycle business, while
also making positive contributions to society. Honda Vietnam's motorbike
sales exceeded 2 million units in 2022 (April 2021 - March 2022), cementing
its position in the motorcycle industry with a market share of around 80%, a
2% rise over the previous year.
Honda Vietnam has applied modern technology to its products, such as
a new generation intelligent laser welding stamping frame to improve frame

7


performance and quality, a new generation intelligent engine eSP+ four
valves, traction control system, Honda SMART Key smart locking system,
Bluetooth connectivity (SH150i; SH350i), and ABS anti-lock braking system,
as one of the pioneering manufacturers in technological innovation (Nga,
2022). During the last year, Honda Vietnam maintained an authorized system
of 804 automobile sales and service shops and 31 repair and spare parts
stations.
Regarding export, Honda Vietnam continues to execute the aim of
encouraging exports, with the overall export volume of Honda Vietnam's
complete CBU automobiles reaching about 207,000 vehicles and total export
revenue reaching more than 462 million USD, up 25.5% from the fiscal year
2021. Honda Vietnam anticipates that CBU exports will exceed 225,000 units
in the next fiscal year, representing a 9% growth over the fiscal year 2022.
4. Non-financial performance
ESG is an acronym for the first three letters of Environment, Social,
and Governance (Hill, 2020). This is a collection of three criteria for
measuring characteristics connected to company orientation and sustainable
development initiatives. ESG assists a company in identifying risks and
opportunities, as well as the effect of risks and opportunities when applied to
operations. This section will teach you about Honda Vietnam from three ESG
perspectives.
Environmental aspect
Honda Vietnam regards environmental preservation as a critical and
long-term obligation to exist and expand responsibly and become a firm that
society expects. HVN has successfully undertaken afforestation projects in
two provinces, Hoa Binh and Bac Kan, under the motto "Together with
Honda to maintain the green of Vietnam" since 2008.

8


In addition to manufacturing and commercial operations, HVN is
working to reduce CO2 emissions into the environment by implementing a
life cycle management system for emissions and reforming means of
transportation. Due to the company's tight CO2 lifecycle management system,
HVN has decreased indoor CO2 emissions by 1%, outdoor emissions by 1%
in the last year, and 3.05% of CO2 emissions due to the move from trucks to
trains or ships (Phuong, 2002).
Social aspect
Honda Vietnam is committed to demonstrating corporate social
responsibility to its workers. Honda Vietnam Trade Union, with over 10,000
workers, constantly gets special attention and timely instruction from the
superior trade union in taking care of and preserving the natural and
legitimate rights and interests of employees. The Company's Board of
Directors is constantly engaged in business, and most of its staff, workers, and
employees have good professional competence and a strong feeling of
responsibility in their job. The expansion of the Company's production and
commercial operations helps to better workers' lives, generate peace of mind
in the workplace, and effectively accomplish the established plans.
At the same time, Honda Vietnam performs well in terms of corporate
social responsibility to society. Honda Vietnam has not only taught over
1,500 instructors for almost 700 HEADs and 14 Authorized Car Dealers
(Pham, 2021). Still, it has also coordinated and supported Safe Driving in its
strong and widespread deployment of driving consultancy efforts. More than
1 million consumers and locals engaged in safety driving instruction and
promotion activities between 2007 and the end of December 2015.
Honda Vietnam organized programs education "Traffic safety for
children's smiles" and "Traffic safety for tomorrow's smiles" for primary and

high school students across the country in 2008 and 2012, respectively, in
9


collaboration with the Ministry of Education and Training, the National
Traffic Safety Committee, and the Traffic Police Department, to improve their
knowledge and build awareness about safe traffic.
Honda Vietnam has received several awards of recognition from
government and municipal authorities for its efforts in traffic safety
promotion and safe driving instruction for approximately 6 million people
nationally.

These

awards

recognize

Honda

Vietnam's

outstanding

contributions to a safe Vietnamese society and its ongoing efforts to become
the corporation that society expects. Among the activities contributing to
society, Honda Vietnam places a specific emphasis on education, seeing it as
an enterprise's duty and obligation to help create a bright future for Vietnam's
young population.
Governance

Honda Vietnam is committed to demonstrating corporate social
responsibility to its workers. Honda Vietnam Trade Union, with over 10,000
workers, constantly gets special attention and timely instruction from the
superior trade union in taking care of and preserving the natural and
legitimate rights and interests of employees (Malone, 2022). The Company's
Board of Directors is constantly engaged in business, and most of its staff,
workers, and employees have good professional competence and a strong
feeling of responsibility in their job. Expanding the Company's production
and commercial operations helps to better workers' lives, generate peace of
mind in the workplace, and effectively accomplish the established plans.
At the same time, Honda Vietnam performs well in terms of corporate
social responsibility to society. Honda Vietnam has not only taught over
1,500 instructors for almost 700 HEADs and 14 Authorized Car Dealers
(Hanh, 2021). Still, it has also coordinated and supported Safe Driving in its
strong and widespread deployment of driving consultancy efforts. More than
10


1 million consumers and locals engaged in safety driving instruction and
promotion activities between 2007 and the end of December 2015.
Honda Vietnam organized programs education "Traffic safety for
children's smiles" and "Traffic safety for tomorrow's smiles" for primary and
high school students across the country in 2008 and 2012, respectively, in
collaboration with the Ministry of Education and Training, the National
Traffic Safety Committee, and the Traffic Police Department, to improve their
knowledge and build awareness about safe traffic.
Honda Vietnam has received several awards of recognition from
government and municipal authorities for its efforts in traffic safety
promotion and safe driving instruction for approximately 6 million people
nationally (Nguyen, 2022). These awards recognize Honda Vietnam's

outstanding contributions to a safe Vietnamese society and its ongoing efforts
to become the corporation that society expects. Among the activities
contributing to the community, Honda Vietnam places a specific emphasis on
education, seeing it as an enterprise's duty and obligation to help create a
bright future for Vietnam's youngster.
5. Conclusion
Honda Vietnam has achieved outstanding accomplishments and is
consistently well-regarded by consumers. With a debt-to-equity ratio always
in the 0.44-0.53, the firm demonstrates its potential to be financially selfsufficient. Honda Vietnam has maintained a system of 804 Honda-authorized
service and vehicle shops and 31 Honda-authorized service and spare parts
stations while expanding maintenance and service facilities around the
country. Despite the fall in sales, Honda continues to dominate the
Vietnamese motorbike market. Notably, Honda continues to outperform other
companies in Vietnam in terms of sales and the number of motorcycles sold
in 2021. Launching high-quality, durable automobiles at competitive pricing
11


is the first step in Honda's business plans when opting to participate in the
Vietnamese market.
Honda's significant restriction was not in the strategy's conception and
planning stages but rather in the strategy's execution phase. Honda has made
severe blunders due to its process of extending the distribution channel
countrywide while failing to exercise adequate control over its branches,
resulting in a "price gouging" that has lasted for many years. Furthermore,
Honda's technology for safeguarding secrets is ineffective; therefore, Honda's
technology is often copied and caught up by rivals.
Recommendation
Honda Vietnam may adopt various ways to increase company
efficiency by learning about the Vietnam motor industry, financial

performance, competitive position, and non-financial performance. The first
approach is to improve strategic business management. The market economy
expands and progressively integrates with the area and the globe, producing
advantageous circumstances for firms while increasing the volatility of the
business climate. Firms must have a dynamic and offensive company strategy
to endure unexpected changes in the business environment. The quality of
strategic planning and management impacts the existence and growth of
businesses, as well as their competitive position and performance.
The second option is to adopt a strategy for product differentiation.
Motorcycle items on the Vietnamese market are now highly diversified and
rich in colours and styles. As a result, Honda Vietnam should not only focus
on manufacturing bikes at affordable costs for working people but also
develop a plan to innovate new products with high-quality, fashionable,
unique, and appealing characteristics that meet the demands of the upperincome groups. Only then can Hoda Vietnam genuinely dominate the
Vietnamese market, respond to the needs of Vietnamese customers, and
12


reaffirm the top position of motorbike goods in the Vietnamese people's
thoughts.
The third option is to improve labour credentials and motivation.
Creative labour is a critical aspect of corporate effectiveness. Any firm must
pay attention to the problem of recruiting, training, retraining, and retraining
to consistently enhance the quality of the staff. The management team, in
particular, must be able to create plans, efficiently allocate resources, and
react promptly to unanticipated changes in the business environment.
<2913w>

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