I, HONDA OVERVIEW

1, Honda Company Overview
- Honda Motor Co. Ltd was founded by Soichiro Honda on September 24, 1948,
based in Tokyo, Japan after realizing the great travel demand of Japan after World War
II. The company started manufacturing from motorcycles to scooters. In the late
1960s, Honda dominated the world motorcycle market. By the 1970s, the company
had become the largest motorcycle manufacturer in the world up to the present time.
After that, the company began to expand car production in 1960.
- Today, Honda is the fifth largest automobile manufacturer and the number one
motorcycle manufacturer in the world, with more than 14 million engines per year in
more than 100 production facilities → over 30 countries worldwide. Honda's main
product lines are automobiles, motorcycles, electrical products, mobile technology
products and aviation. Honda's main markets are North America, Europe, and Asia.
Currently, the Chairman, CEO and Representative Director is Mr. Takahiro Hachigo.
- Vision – mission
+ Vision: Honda becomes the world's leading automobile, motorcycle and
technology product manufacturer
+ Mission: Honda maintains a global stance of providing the best quality
products at prices that satisfy customers around the world.
2, Honda Vietnam Overview
+ In March 1996, Honda officially received an investment license in the
Vietnamese market and only 2 years later the most modern motorcycle
manufacturing factory in Southeast Asia was inaugurated at the head office of
Honda. company: Phuc Thang - Phuc Yen - Vinh Phuc with initial investment
capital of more than 290 million USD. Honda Vietnam Company is a joint
venture with 03 partners: Honda Motor Company (Japan – 42%), Asian Honda
Motor Company (Thailand – 28%), Motivation and Agricultural Machinery
Corporation Vietnam – 30%).
+ Since Honda entered the Vietnamese market, the company has continuously
invested in building production infrastructure to meet the increasing demand of

the market - where motorcycles are the vehicle that accounts for nearly 90% of
the total. in big cities.
+ Honda has a strong presence in Vietnam, with six manufacturing factories
spread across different provinces of the country (Including 3 motorbike
manufacturing plants, 1 car manufacturing plant, and 2 plants producing
various types of spare parts). These factories produce a range of high-quality


products, including motorcycles, automobiles, power products, electronic
components, and precision components. With an annual production capacity of
millions of units and employing more than eights of thousands of workers,
Honda's factories in Vietnam play a crucial role in the company's global supply
chain, providing high-quality products to both domestic and international e
markets.

II. Analyzing the External Environment in Honda Viet Nam:
General Environment - PESTEL Analysis
1. Political:
A business unit is critically influenced by the form of political law. Every decision of
expanding the consumption scale and prices are governed by the policy of the state
management agencies. Motorbike manufacturing is also affected by taxes, commercial laws,
business laws,...
According to state policy, motorbikes will be banned from Hanoi in 2030, which will greatly
affect the company's production strategy and sales. Rather than focusing on motorbike
production, the company can invest more in the development of automobiles. The director of
the company confirmed that: Honda Vietnam continues to maintain its position as the leading
company even after society has shifted to a period of "Car goods". (Vision of 2030)
2. Economic
Economic environment affects consumer buying power and spending patterns.The research is
about Honda motorcycles. On the other hand, it examines all factors which are involved in

the economic environment that influence the manufacturing and sales of motorbikes in
Vietnam. In fact, Vietnam is a developing country in the process of industrialization and
modernization, and therefore, many economic factors have recently changed. Our essay
covers four parts belonging to the economic environment
a. Inflation rate:
Firstly, the inflation rate in two countries, Japan and Vietnam, are analyzed. Japan, the
founder of Honda, will be considered first. The inflation rates of Japan and Vietnam are
always changing. It will cause many products' prices to decrease or increase or stay constant,
and the cost of materials usage in making motorcycles will follow in a similar way. This may
impact the price of the final products. Besides, when motorbikes are delivered as export
products to Vietnam, this price may be reduced. However, the motorcycle market usually
stays stable,so its price tends to stay constant. Therefore, the motorcycle producers likely
increase the quantity of motorbikes instead of changing the prices of products. There are two
kinds of motorcycles, one is assembled in Japan and another is assembled in Vietnam.
However, the reason for mentioning the inflation rate in Vietnam is that only a few percent of
domestic production accounts for high-value components of vehicles. Components
manufactured in Vietnam are mostly simple spare parts such as seat belts, seats and wire. The
rest of the critical equipment with high technological content is mostly imported from other


countries. The increase in the inflation rate likely leads to the increase in the sales of
products.
b. Consumer spending:
Consumer spending in Vietnam is the other crucial part. According to MACROTRENDS
(2021), Vietnam consumer spending for 2021 was $202.97B, a 4.63% increase from 2020.
Vietnam consumer spending for 2020 was $193.99B, a 2.09% increase from 2019. Vietnam
consumer spending for 2019 was $190.01B, a 7.35% increase from 2018. Because of the
increase in consumer spending it indicates that Vietnamese people recently tend to spend
more. The market encourages people to spend as well as their ability to do it. Based on this
information, producers could decide to increase the production of products and focus strongly

on the Vietnamese market as the destination of export.
c. The level of income
This is the important part, Honda could briefly understand about the change in consumer
behavior and buying power. According to the World Bank the level of income has gradually
increased every year. GDP scale at current prices in 2022 was estimated to reach 9,513.3
million billion VND, equivalent to 409 billion USD[7]. GDP per capita in 2022 at current
prices was estimated at 95.6 million VND/person, equivalent to 4.110 USD, up 393 USD
compared to 2021. Besides, the average cost of a motorcycle selling in Vietnam varies from
$800 to $900. Basically, Vietnamese people could buy a motorbike by themselves with one or
two years of savings.
Consequently, the level of income is predicted to increase in the future, so not only Honda but
also the other companies likely produce and export more motorcycles in order to increase
their revenue as well as profit. Moreover, the Vietnamese market is still a potential market to
invest and develop the motorcycle industry.
d. Global effect
Becoming a member of the World Trade Organization (WTO) promotes Vietnam's economy
to develop deeper and wider in the global economy. The opportunity to take advantage of
external resources accelerates the process of industrialization and modernization in Vietnam.
Additionally, Vietnam has already set a target in 2020 to basically become an industrialized
country. Furthermore, there is another potential segment in the Vietnamese market: the
foreign workers who work and live in Vietnam for a long period of time. The market in
Vietnam basically grows slightly, and it creates great opportunities for international
companies. The growth in the economy leads a lot of foreigners to come to Vietnam. Some of
them come for working and others for living and getting married. Consequently, because
there are many opportunities for international companies to invest in the Vietnamese market,
a huge number of foreign laborers are working in Vietnam. The Vietnamese market is likely a
potential market.
3. Social culture:
Social culture and the ways of doing things impact the culture of an organization in an
environment. Sharing beliefs and attitudes to the consumers play a great role in how

marketers at Honda Motor Co., Ltd. understand the customers of a target market and how
they design the marketing message for Auto Manufacturers - Major industry consumers.
Social factors that leadership of Honda Motor Co., Ltd. should analyze for PESTEL analysis
are


•

Demographics and skill level of the population
● Age: golden population (15-60: 69.3%)
● Skill level: low-most of the population is the manual worker
● -Class structure, hierarchy and power structure in the society.
● -Education level as well as education standard in the Honda Motor Co., Ltd. ’s
industry:
● -95% know how to read and write
● -Culture (gender roles, social conventions etc.)
● -Manpower but more and more equal
● -Entrepreneurial spirit and broader nature of the society. Some societies
● encourage entrepreneurship while some don’t
● -Attitudes (health, environmental consciousness, etc.)
● -Leisure interests
Nowadays, the role of women is increasing. Moreover, their incomes are higher day by
day that leads to the demand for motorbikes, which are suitable for women, increase. The
government officially recognized the equality of the genders, and women obtained
employment in professions which had been previously dominated by men. It is a chance for
Honda to develop a product for women such as lead.
- Vietnamese people always prefer to have the personal vehicle as an asset, not a public
transportation, besides the price of the car in Vietnam is very high due to the import tax so it
is the opportunity for them to sell the product
- Vietnamese people believe that Japanese products have the best quality. They always want

to buy products made in Japan first.
4. Technological
Technology is fast disrupting various industries across the board. The transportation
industry is a good case to illustrate this point. Over the last 5 years, the industry has been
transforming really fast, not even giving chances to the established players to cope with the
changes.
A firm should not only do the technical analysis of the industry but also the speed at
which technology disrupts that industry. Slow speed will give more time while the fast speed
of technological disruption may give a firm little time to cope and be profitable. Technology
analysis involves understanding the following impacts.
- Recent technological developments by Honda Motor Co., Ltd. Competitors
+Technology's impact on product offering.
+Impact on cost structure in Auto Manufacturers - Major industry.
+Impact on value chain structure in the Consumer Goods sector.
+The rate of technological diffusion.
5. Legal:
- Relating to localization issues, while motorcycles imported from foreign countries suffered
30-40% tax rate, the components imported for domestic assembling just suffered 20-25% tax
rate, so local motorcycles will have a great advantage in price competition, especially for
moderately priced motorcycles. Since 1998, Honda has built three large motorcycle factories
in Vietnam, producing about 2.5 million products per year.


- Nowadays, because of joining economic organizations, the tariff barriers are gradually
abolished. According to the project in 2018, the import tax on motorcycles fell sharply, even
some motorbikes are free-tax imported from Thailand. Therefore, the company are forced to
bring out competitive solutions, such as lower costs, improve quality, creating more incentive
programs and enhancing warranty service or repair.

6. Environmental

Environment pollution in our country is increasing seriously, mainly due to the waste from
industrial zones. It is estimated that out of 183 industrial parks in the country, over 60% of
industrial parks do not have a centralized wastewater treatment system. Therefore, since
2001, Honda Vietnam has applied a comprehensive environmental management system ISO
14001 in the production process with modern waste treatment systems, waste water and
improve the efficiency of using energy. quantity. This system has contributed to reducing
CO2 concentrations in the workshop from 5107mg / m3 in 2003 to 1403mg / m3 in 2004 and
less than 900mg / m3 in 2005 and 2006.
In Vietnam, motorcycles are the most common means of transportation and motorcycle
emissions are also a major cause of air pollution. In that situation, the company has produced
motorcycle exhaust to ensure emission standards in order to not harm the people.- In addition,
the scarcity of natural resources is also a concern of mankind. Therefore, the creation of fuel
efficient and environmentally friendly motorcycles is a matter for Honda Vietnam. In 2006,
the company introduced a new, eco-friendly and fuel-efficient, which features a new 108cc
engine, which is cooled by a radiator with integrated exhaust. Nox, HC and CO2 are even
lower than the Euro-2 standard12

Task Environment - FIVE FORCE analysis
1. Customer:
- Characteristics:
Female (35%) and male (65%)
Age groups: 18–24 years (45%); 25–34 years (38%); 35–44 years (13%), >44 years
(4%)
Income: medium to high
Medium price sensitivity:
+ Dominate the market in Vietnam ( 66% market share in 2015)
+ brand loyalty
+ reasonable price with high quality
- Customer market: Honda’s main goal is to provide high quality transportation for
Vietnamese people at a reasonable price. Nowadays, motorcycles are considered as the most

common means of transportation in Vietnam. On average, there are 2-3 motorcycles in each
house in Vietnam. So, Vietnam has a large motorbike consumption. Honda consumers in
Vietnam include both females (35%) and male (65%). They divide customers into many
different segmentation groups such as 18- 24 years old (45%), 25-35 years old (38%), 35-44


years old (13%) and over 44 years old ( 4%). According to the World Bank, the level of
income has gradually increased every year.
Vietnamese people could buy a motorbike themselves without saving money for 1 to 2 years.
Honda customers have medium price sensitivity because HondaCompany has dominated
Vietnam market with 66% market share in 2015.

Moreover, Honda Company built a strong brand loyalty of customers. So, in case Honda
motorbike rises prices, customers will still purchase their products for high quality, brand
image.
2. Competitors:
In Vietnam’s market
-Main: Yamaha
+Weakness: cannot compete with Honda (Honda Vietnam) in terms of quality: durability ..,
fuel economy
+Strength: Yamaha has more advantages than Honda Vietnam in terms of various types. This
type of company is very rich, diverse and fashionable.
-Honda: 26%
-Yamaha: 14%


- Other competitor: SYM, Suzuki, Piaggio
- Honda Vietnam has sold over 20 million motorcycles and scooters, occupying about 60 per
cent of the market, reaching far ahead of competitors, including Yamaha Vietnam, Suzuki
Vietnam, Piaggio Vietnam or SYM.


In order to reduce the threat posed by too much competition in the motorcycle manufacturing
industry, Honda has made many efforts to distinguish itself from its competitors by creating
differences and uniqueness of its products and services. It also has patented its key
technologies.


3. Suppliers:
Suppliers are individuals or companies that provide businesses with the resources to produce
complete products (cars, motorcycles).
- In order to produce motorbikes, cars, Honda has to buy steel, aluminum, tires ... and other
materials. In addition, the company also has to buy labor, fuel equipment, electricity,
computers ... necessary to produce vehicles. Honda Vietnam imported spare parts from Japan,
Thailand, China ... In order to meet the demand of quality, marketing managers always pay
attention to the events occurring in the "supplier" environment, because those events can
affect the company's marketing. Specifically, we can look at the earthquake risk in
Japan,which has a huge impact on the automatic industry and at the same time affects the
supply of spare parts of Japanese companies for Honda Vietnam Company.
Moreover, the company must always focus on risks from suppliers. At this time, Honda
Japan is pausing the exportation of spare parts from a number of factories but represents
Honda Vietnam. This statement does not affect the production of this joint venture "because
we have a sufficient stock of reserves and if necessary we will consider finding another
supplier to maintain production”.
Representing a dealer of Honda Vietnam also confirmed that the amount of spare
parts at the dealer is not missing as the dealer of Honda plans to import spare parts for the
year so the amount of spare parts in the warehouse "is still enough”. Despite a long supply of
supplies from Japan
In addition, the marketing department of Honda Vietnam always pays close attention to
the price of goods from suppliers, because the increase in the price of materials purchased can
cause the company to increase prices of goods. Thus, Honda also affects the companies,

dealers, making them cannot have the competitive products of motorcycles and cars of all
kinds. This will adversely affect the position of the company in the market.
Suppliers ensure the resources needed for the business of producing and trading
products. Marketing managers need to grasp the ability of the suppliers both in quality and
quantity. Delay or supply shortage makes marketing difficult because it can harm the ability
of the target customer to meet the demands and will inevitably affect sales, which is because
the customers may switch to products of competitors.
4. Substitute products:
In fact , there are not many substitutes that are considered a serious threat to the automobile .
Currently, there are a number of products that can replace cars such as motorbikes, buses,
trains, planes, boats, old cars, etc.
Features of substitute products:
- Motorcycles: have a price that is suitable for most people's pockets, suitable for the
condition that the traffic infrastructure has not yet developed in Vietnam, but currently the
motorbike market is freezing and tends to be stormy. because according to the calculation of
the Ministry of Industry and Trade, by 2020, the number of motorbikes will be
nationwide is .5 million units, reaching the utilization rate of 2.97 people/car. At the rate of
2.9 people / vehicle, in Thailand, the motorbike market is saturated. - Public bus: This is a


public service, so the price is cheap, serving travel mainly in the inner city (under
construction). develop )
- Trains, airplanes: Unscheduled and often used on long trips
- Boats, boats, canoes: Often used in river areas with a system of canals and rivers interlaced
- Old cars: are a big threat to current vehicles because of their cheaper price, suitable for lowor middle-income consumers If the features of an old car are not too different from that of a
new car, this will be a potential substitute because customers are willing to switch to a new
car. using old cars , creating downward pressure on car manufacturers . However, if the
remaining usage time is included, the use of used cars does not affect the sales of automakers
much. Therefore, the threat of substitute products in this industry can be considered to be less
serious. In general, substitute products do not put too much pressure on the automobile

manufacturing and trading industry in Vietnam. Thereby, we can see that the Vietnamese
automobile market has a lot of potential and follows the inevitable trend, this is an
"attractive" piece of cake in the future.
5. Pressure from potential opponents:
The attractiveness of the industry: according to the theory, with the world's leading economic
growth rate, large population size and current level of integration, it is completely possible to
believe in the ability to develop in The future of the automotive industry in Vietnam.
However, the wave of world automobile corporations continuously pouring capital into
Thailand shows that the Vietnamese auto market is losing its attractiveness (2011), and in
2012 it tends to prosper because according to the explanations of economists auto business,
on
In fact, people's real demand for cars is still relatively high, so there has been a clear shift in
the market segment with the sudden increase of personal cars compared to commercial
vehicles despite the difficulties. economic hardship
However, there are always barriers to entering the industry:
• Economic scale: long-standing automobile companies such as Ford Vietnam, Toyota
Vietnam, Honda Vietnam, GM Daewoo, Hyundai Motor Vietnam… they have a large scale,
invest in modern equipment, and produce high-quality products. produce products in large
quantities, thereby reducing the cost per unit significantly. Enterprises that want to enter the
industry will have to invest approximately the same scale as the above companies to be able
to compete.
• Product differentiation: emphasizing customer loyalty and brand awareness to customers.
reputable companies in the market. Because cars are luxury products, when deciding to buy,
people often think very carefully, they will give preference to products of famous brands over
products of some new car company
• Requires capital : The automobile manufacturing and trading industry requires a very large
amount of initial capital and the ability to recover capital is slow. This is also a significant
barrier for new firms.
• Switching costs: is the cost that buyers have to pay to change the source of supply.
Including: staff training costs, the price of new equipment attached... The higher this cost, the

greater the barrier


• Distribution channel: the characteristics of this industry are which firms have their own
distribution channels. If a new company wants to enter the industry, it must invest in building
its showrooms. This requires a large amount of capital
• Other cost disadvantages unrelated to scale: old competitors often hold: product copyrights,
patent rights, secrets, cheap raw materials, favorable location, CP's allowance, experience...
should create challenges for newcomers

3. Analyze business strategies of enterprises in Vietnam market
3.1. Building brand identity system
Name: HONDA – both powerful and unique, the font is designed with red capital
letters showing strength and creativity
Logo: Looking at this logo, everyone knows that this is the logo of Honda Vietnam.
This familiar bird logo has left a very deep impression in the minds of Vietnamese people.
Slogan: "The Power Of Dream". Everyone has a dream, an active goal that makes our
lives more profound and meaningful. When we chase our dreams, we feel empowered.
A successful slogan often carries an impressive message and arouses the customer's
imagination about the product. For Honda, instead of having to talk at length about the
company's criteria, the company used the slogan "The Power Of Dream" to express the
criteria the company wants to bring to consumers. Honda Vietnam wants to bring every
Vietnamese citizen more safety and happiness in life. This slogan is like a message that
Honda wants to send to all customers: "Become a company expected by society, make every
effort for the development of the country and Vietnamese people".
3.2. Brand development strategy

● Low cost strategy
Honda's goal is to create a competitive advantage by creating products at the lowest
cost. Thus, stemming from the use of a multinational strategy for the motorcycle product.

Honda has focused on developing its manufacturing plant in Vietnam to take advantage of
Vietnam's advantages of location economies. In addition, Honda also focuses on the strategy
of developing a variety of product lines targeting different target customers, from low-priced
cars to high-end segment cars. Typically, in 2002, Honda launched the Wave alpha
motorcycle with the price of 13,690,000 VND, durable quality, compact design suitable for
the needs of rural consumers - low income. This low-cost competitive strategy has helped
Honda capture the rural market of 70% of Vietnam's population.
● Success:
Honda Vietnam has been successful with low-priced but good-quality cars such as
Super Dream, Wave α. These vehicles have brought high satisfaction to consumers. In the
early stages of business in Vietnam, Honda faced great competition from low-cost Chinese
motorcycles, but through a low-cost strategy, Honda launched a product assembled in


Vietnam, Wale α. with the same price as Chinese motorbikes but with higher quality, thereby
helping Honda regain market share and grow stronger in Vietnam.
● Limit:
The low-cost strategy has brought great success to Honda Vietnam, but there are still
many limitations in the strategy implementation process. The price Honda offers for some
products is still high, the company can still reduce the price further through improved human
resource cost management and the difference between the company's proposed price and the
market price. .
● Differentiation strategy
Honda has the largest product chain among motorcycle manufacturers in Vietnam, spanning
all segments. There are a total of 14 models with engines of 300 cc or less. The diverse prices
and models make Honda motorcycles suitable for all types of customers, from affordable,
intermediate to high-end, from young to middle-aged people, including both men and
women.
Digital models have Wave, Blade and Future.


Scooters span many price points, including Vision, Air Blade, LEAD, PCX, SH Mode and
SH.
In particular, the SH motorcycle series is a high-end product line with many unique
and outstanding features to target high-income customers, young people, who like trendy and
classy products.

The line of personal clutches has 3 products: WINNER, MSX and Monkey.
Large displacement vehicles with both throttle and clutch, are SH 300i and Rebel 300.
Each model is divided into many small versions, diversifying choices for customers.
For example, Wave has Alpha and RSX FI that differ in design and technology;
PCX has 3 engine options 125cc, 150cc and Hybrid;
SH has engine options from 125cc, 150cc to 300cc...
Such versions are further subdivided with CBS or ABS brake configurations, creating a huge
product network.
Honda products are known for their durability, beauty, powerful engines and fuel economy.
With any product line, Honda always innovates designs and techniques over time to suit
consumers.
Eg:
- Wave series
● Wave α (2002)
●

Wave RS


●

Wave 110 RSX

- Future series

· Future
· Future X
· Future X FI

● Success:
Honda offers a very convincing differentiation criterion for customers to buy products that
are "fuel economy". With the introduction of FI technology, electronic fuel injection, Honda
Vietnam has hit the customer's mind when the price of gasoline increases continuously,
contributing to a rapid increase in market share.
In addition, the company offers a strategy aimed at young people, the population making up a
large proportion of the total population, Honda takes the very youthful slogan "Be U with
Honda" along with a loud advertising strategy. popular in the media, creating a youthful new
image for Honda, which was considered a product for people of the previous generation.
Honda products always improve in eye-catching designs and colors to catch up with the
dynamism of young people.
● Limit:
Honda's differentiating technology was not a breakthrough, just an improvement of existing
technology, so Honda's innovation was quickly taken up by other companies with similar
products.

● Focused Strategy
In addition to the above product line, Honda also offers a number of product lines
suitable for female customers such as convenience and fashion while the price is only
average. This is a very easy to use vehicle, no need for clutches, gears, a large storage box
that can hold many important things... this vehicle has many rich, unique, luxurious and
suitable designs. with the personality of young people, especially women. Therefore, Honda
scooters are more and more popular. Honda Vietnam Company has launched a new type of
scooter called Click, and then respectively: Air Blade (April 2007), Click Play (September
2008), Lead (December 2008).
● Success:

Another success in Honda's business strategy can be said to be the focus strategy.
Realizing the rapid increase of customers who have high demand for scooters, the company
quickly launched scooter products for the high-end segment: SH, Spacy, @. This model is
continuously improved by Honda to meet the needs of customers. In addition to the high-end
scooter line SH Honda Vietnam also offers products such as PSi, @,... Here Honda has
created a new segment for the high-end scooter market, thereby competing directly to win. a
lot of scooter market share of Piagio and other automakers.
● Limit:


In addition, the above strategy also has many limitations: The price is always set at a
high level such as SH, Spacy, @, PS, ... making sales low, cars are often in inventory, making
it difficult to implement. business plan. The image of Honda has been adversely affected by
setting prices too high, creating artificial scarcity to always push prices up. The quality of
vehicles in the focus strategy does not have much improvement, usually only a change in
styling.
3.3. Brand promotion communication
Honda is a very strong brand in advertising communication, with advertising
campaigns ranging from television to Outdoor advertising. On the roads we can see Honda
ads, aggressive ads for their new product lines, or just propaganda about traffic safety.
Moreover, television advertising is Honda's strength with dense advertising TVCs and is
carefully focused on the young vitality of Vietnam.
Honda cooperates with Vietnamese television station to launch a series of programs "I
love Vietnam" with the aim of increasing traffic safety awareness in Vietnam. The program is
strongly communicated on television and also on the Internet with great coverage nationwide.
With this tactic in Honda's marketing strategy, the company wishes to be able to create
sympathy with customers, increase reliability and "pin" in the subconscious about a clean
brand, increasing the level of customer satisfaction. identified. As a result, people can see
how successful it is with annual sales at more than 80% of the motorcycle and 7% automobile
market share.

In addition, Honda also organizes a series of events such as: "Honda - full of faith",
"BeU + with Honda", ... to thank customers for sticking with Honda Vietnam, thereby not
only reinforcing loyalty. old customers but also build a good image in the eyes of new
customers.
Besides communication on the media and advertising billboards, promotions are also a strong
point of Honda when constantly offering promotions with preferential prices. These are
probably Honda's most successful promotional campaigns. Usually in these campaigns, when
you buy a Honda motorbike like a Dream car, you are given a Honda-made helmet, a fee
support when registering the vehicle's paperwork, and possibly maintenance. periodically at
Honda centers without paying. Mobile service programs to other provinces demonstrate how
much the company cares about customers, and each month, activities like Honda's BeU often
hold promotions to enhance service. This strategy is very popular with customers and it
generates positive feedback from the public.

Effective business strategy of Honda Vietnam
When participating in international business, companies in general and Honda in
particular often have to adjust their activities and products to suit actual conditions.
Therefore, for each stage, each different market segment Honda Vietnam has different
business strategies.
Honda VN takes advantage of the available resources of intermediaries, from capital,
people, management to customer service and relationships with potential customers as well as
public agencies. rights in the local market. More than anyone else, Honda understands that


the distributor is their extension arm in the market, they know how to take advantage of the
power of the Head to penetrate and conquer the Vietnamese market with the following
numbers we can see This is achieved with: The capacity of 2 motorcycle factories is 1.5
million vehicles/year and the automobile assembly plant is 10,000 vehicles/year. With annual
revenue of over 1 billion USD, Honda Vietnam is the largest FDI enterprise in Vietnam.
Overall, Honda does business in Vietnam in many fields, but Honda's main products

are motorcycles. Each product includes many segments, such as: popular segment, mid-size
segment and luxury segment. Therefore, to do well in the Vietnamese market, Honda needs to
use and combine many strategies.
IV. Honda’s Business Strategy Comparison between 3 different market: Vietnam, China
and India
Similarity:
Localization

Honda has localized its products in all three
markets to suit the needs and preferences of
local consumers. In China, Honda has
developed a long-wheelbase version of the
Accord to cater to the Chinese consumers'
preference for spacious vehicles. In India,
Honda has developed models such as the Honda
Amaze and the Honda City with features that
are popular among Indian consumers, such as
fuel-efficient engines and affordable prices.

Expansion of production facilities

Honda has invested in expanding its production
facilities in all three markets to increase its
production capacity and meet the growing
demand for its products. Honda has set up joint
ventures with local Chinese partners to produce
and sell cars in China, and it has set up a new
manufacturing plant in Gujarat, India, to
increase its production capacity.


Focus on electric vehicles

Honda has increased its focus on electric
vehicles in all three markets. In China, Honda
has introduced several hybrid and electric
vehicles. In India, Honda has launched a new
motorbike version at the Auto Expo 2020,
which is expected to be launched in the Indian
market soon. In Vietnam, Honda has introduced
the Honda PCX Electric scooter.

Partnerships with local companies

Honda has formed partnerships with local
companies in all three markets to expand its


presence and leverage local expertise. In China,
Honda has set up joint ventures with local
partners such as Guangzhou Automobile Group
and Dongfeng Motor Corporation. In India,
Honda has formed a partnership with Hero
MotoCorp to manufacture and sell motorcycles
under the brand name Hero Honda. In Vietnam,
Honda has formed a partnership with the
Vietnam Engine and Agricultural Machinery
Corporation to produce motorcycles.
Digitalization

Honda has embraced digitalization in all three

markets to enhance the customer experience.
Honda has introduced digital showrooms and
online sales platforms in all three markets to
cater to the growing number of consumers who
prefer to shop online.

Differences

Vietnam

China

India

Market Size

Vietnam has a relatively
small market size compared
to China and India. Honda's
business strategy in Vietnam
focuses
on
producing
motorcycles that cater to the
needs of the Vietnamese
consumers. Honda has a
strong market position in
Vietnam, and it is known for
producing
high-quality,

reliable motorcycles.

China has the largest
automobile market in the
world, and it is also a
significant
market
for
motorcycles
and
power
equipment. Honda's business
strategy in China focuses on
producing a wider range of
products, including cars and
power
equipment,
with
advanced technology and
safety features. Honda's
products in China are known
for their quality, reliability,
and advanced features.

India is the world's
largest
two-wheeler
market, and Honda's
business strategy in
India

focuses
on
producing affordable and
efficient
motorcycles
and scooters that cater to
the needs of the Indian
consumers. Honda has a
strong market position in
India, and it is known for
producing high-quality,
reliable two-wheelers.

Consumer
Behavior

Vietnamese consumers are
price-sensitive and value
fuel efficiency, reliability,
and low maintenance costs
-> Honda's business strategy
in Vietnam focuses on
producing affordable and
efficient motorcycles that
cater to the needs of the
Vietnamese consumers.

Chinese
consumers
are

becoming
more
quality-conscious and are
willing to pay more for
high-quality products ->
Honda's business strategy in
China focuses on producing
high-quality products with
advanced technology, safety
features, and comfort.

Indian consumers are
also price-sensitive and
value fuel efficiency,
reliability,
and
low
maintenance
costs.
However, they also value
style and comfort in their
two-wheelers -> Honda's
business strategy in
India
focuses
on
producing affordable and


efficient

motorcycles
and scooters with stylish
design and comfortable
riding experience.
Competitive
Landscape

Honda faces competition
from local and foreign
motorcycle manufacturers in
Vietnam. However, Honda
has
a
strong
brand
reputation and a wide
distribution network, helps
it maintain its market
position.

China's
automobile and
motorcycle
markets are
highly competitive, with both
domestic
and
foreign
manufacturers. Honda faces
tough competition from local

and
foreign
motorcycle
manufacturers in China.

Honda competes with
other
established
automotive
manufacturers such as
Maruti Suzuki, and
Hyundai. where brands
such as Hyundai and
Maruti Suzuki dominate
the market.

Manufacturing
and Production

Set up a manufacturing plant
to produce motorcycles,
automobiles, and spare
parts.

Set up joint ventures with
local Chinese companies to
manufacture
and
sell
motorcycles, automobiles.


Established
two
manufacturing plants to
produce motorcycles and
automobiles, and the
company also sources
components from local
suppliers.

Marketing
Promotion

Focused on promoting its
brand through social media,
sponsorships,
and
advertising campaigns that
appeal
to
younger
consumers.

It
has
used
celebrity
endorsements
and
promotional

events
to
enhance its brand image and
appeal to consumers.

Promoting
its
fuel-efficient
vehicles
and
safety
features
through
advertising
campaigns and customer
engagement programs.

and

V. BUSINESS STRATEGIES COMPARISON OF HONDA & OTHER COMPANIES
IN THE SAME INDUSTRY IN VN
Since Vietnam's economic reform in 1986, Vietnam's economy has undergone many changes,
with rapid growth, the domestic market has opened up, creating favorable conditions for
foreign enterprises to penetrate the Vietnamese market. The automobile and motorbike
industry is a nascent industry, so this is a good opportunity for motorcycle manufacturers to
jump into the Vietnamese market.
Some of the favorite motorcycle brands at the moment are Honda, Yamaha, Suzuki, and
Piaggio.

Pricing

Strategy

HONDA

PIAGGIO

SUZUKI

YAMAHA

Honda focuses on a
strategy
of
developing
a
variety of product
lines
targeting
different
target

Selected a market
segment
where
customers
have
high income, this
is
a
difficult

market segment
because
this

To gain a foothold
in the hearts of
customers,
a
quality product is
not enough, it
must also come
with a reasonable

New product pricing
strategy: Skimming
pricing is to sell a
product or service at
a premium if the
product or service
has unique benefits


Differentiation
strategy

customers,
from
low-priced cars to
high-end
cars.

Honda offers Wave
alpha motorcycles
priced from VND
13,000,000, durable
quality,
compact
design suitable for
the needs of rural
consumers - low
income.
This
low-cost
competitive
strategy has helped
Honda capture the
rural market of 70%
of
Vietnam's
population.

market segment is
very difficult, the
product
requirements are
very high.

Honda products are
known for their
durability, beauty,
powerful engines

and fuel economy.
With any product
line, Honda always
innovates designs
and techniques to
meet consumers's
demand.
In
addition,
Honda
also introduced into
the
Vietnamese

While
other
motorcycle
manufacturers
introduce
new
models to the
market, Piaggio
offers new product
lines that are
always traditional
and cultural in the
shape of a boot.
But they were not
popular at first,
until

the
"princess" Vespa
Lx was released

price.
And it
seems that Suzuki
is meeting the
needs
of
customers for a
"ngon, bổ, rẻ"
vehicle.

or
characteristics.
Therefore, when the
product or service is
no longer unique
because there are
similar products or
services, the selling
price will gradually
decrease.
Price
adjustment
strategy
with
discount: Automatic
card program is a

special
care
program
for
members of Yamaha
Fan
Club
and
customers who buy
and use motorbikes
of
the
limited
company. Yamaha
Motor Vietnam. All
members
and
customers who own
an Automatic card
will enjoy good
incentives

Suzuki
is
considered very
durable
and
requires
little
repair. The engine

of
Suzuki
motorcycles
is
highly
appreciated,
strong
and
durable.
Another
point,
many
Suzuki
motorcycles are
now
equipped
with a lot of

Yamaha's
motorcycles
have
very
strong,
powerful engines,
good acceleration,
fast acceleration, so
they are loved by
many young people
and
have

the
advantage
of
long-distance riding.
The most popular
Yamaha
manual
transmission
motorbikes are the
Jupiter series, the


Marketing
Strategy

market
a
high-quality
product line such as
SH motorcycles and
most recently CPX.
This is a high-end
product line with
many unique and
outstanding features
to
target
high-income
customers, young
people, who like

trendy and classy
products.

=> created a fever
and
brought
beauty services to
the car.

modern and smart
technology. For
example,
the
Suzuki
GSX-R150 2021
clutch scooter is
equipped with a
1-click
start
button, making it
easier to start the
car. In addition,
all models meet
EURO 3 emission
standards,
contributing
to
more
environmental
protection.


Nouvo and Nozza
scooters are also not
very
impressive.
However, at the
Yamaha clutch line,
it is almost the king
on the market with
the Exciter, FZ 150,
…

Honda is a very
strong brand in
advertising
communication,
with
advertising
campaigns ranging
from television to
Outdoor
advertising. On the
roads, we can see
Honda
ads,
aggressive ads for
its new product
lines,
or
just

propaganda about
traffic safety (series
"I love Vietnam".
").
Moreover,
television
advertising
is
Honda's
strength
with
dense
advertising TVCs
and is carefully
focused on the

In addition to
using advertising
channels, Piaggio
also
organizes
clubs for Vespa's
customers, which
is a bridge for
unfamiliar
members
to
become close to
each other. =>
trend.

In
online
motorcycle
forums, Vespa is
considered
the
strongest with a
large number of
visitors,
news/photos are
constantly updated
at
home
and
abroad. Articles
with
different
styles
(witty/informative
/…) => Success in
creating images in
the subconscious

Suzuki's
promotion
marketing strategy
is "chọn mặt gửi
vàng", becoming
the main sponsor
for many skiing

sports
events.
They are also the
current sponsor of
the
Asean
Football
Championship
(AFF
Suzuki
Cup).

Yamaha is very
strong in creating
events and media
programs
with
enormous coverage.
Yamaha's goal is to
focus on TVCs
advertising
new
product lines, the
company's strategies
aim at the awareness
of its products to
customers.
Yamaha's marketing
strategy is also very
up-to-date

with
recent trend when
choosing
Social
Media to effectively
reach users


young vitality of mind
of
customers.
Vietnam.
Theredfore,
creating
strong
impression
of
Piaggio
Central
Strategy

Honda also offers a Dominating
the
number of product high-end scooter
lines suitable for market in Vietnam
female customers
such
as
convenience
and

fashion while the
price
is
only
average.

Besides scooters,
Suzuki gradually
turned to the niche
market of sports
clutches and cars
under
50 cc,
where
Honda
ignored, choosing
a message aimed
at young people.

For the manual
transmission
motorbike market,
Yamaha continues
to promote sales of
the Yamaha Sirius
line - the top-selling
digital car model in
Vietnam, youthful,
suitable for both
men and women.

And the Yamaha
Exciter series of
clutches with a
strong appearance.

Honda, Piaggio, Suzuki and Yamaha have had the right strategy when entering the
Vietnamese market.
These multinational companies have built nationwide distribution channels, warranty centers
providing after-sales services of reputable brands and high service quality, in order to
increase customer's trust and satisfaction.
In general, these motorcycle companies all have a common strategy of always changing and
improving their products to suit the requirements of the Vietnamese market and have
successfully become the most popular motorcycle line at the moment.