Honda’s traditional motorcycle production lines face challenges as Vietnam tightens air pollution control policies. (Photo: Honda)
Vietnam’s plan to ban fuel-powered motorbikes in central Hanoi has triggered alarm among Japanese manufacturers, who say the policy could trigger mass layoffs and bankruptcy. The Japanese government, along with motorcycle makers Honda, Yamaha, and Suzuki, has urged Hanoi to delay implementation and provide a transition period for the industry to adapt.
Japan raises concerns over Vietnam’s anti-pollution policy
To tackle urban air pollution, the Vietnamese government plans to phase out gasoline motorcycles starting with a ban in downtown Hanoi from mid-2026, with other major cities like Ho Chi Minh City expected to follow.
According to Reuters, Japan’s embassy in Hanoi sent a letter to the Vietnamese government in September, warning that an abrupt ban would severely affect motorcycle distributors and parts suppliers. The embassy called for an “appropriate roadmap” toward electrification, including adjustment periods and phased regulations.
Another document obtained by Reuters revealed that Japan’s leading motorcycle manufacturers had already issued a joint warning in July, saying the ban could force suppliers into bankruptcy and production interruptions.
Industry groups estimate that nearly 2,000 dealerships and 200 component suppliers could be hit by the ban, affecting hundreds of thousands of workers. They have called for a two- to three-year transition period to realign production lines, expand charging networks, and update safety standards.
Vietnam’s two-wheeler market is among the largest in the world, valued at USD 4.6 billion, with nearly 80 million registered motorbikes—a penetration rate of about 80%, according to Mordor Intelligence.
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Vietnam plans to phase out gasoline motorcycles, starting with a ban in downtown Hanoi. (Photo: Pixabay)
Honda dominates the market with an 80% share and sold 2.6 million units last year. After electric vehicles (EVs) outpaced traditional fuel-powered cars in the market, Honda’s revenue has become increasingly reliant on its motorcycle business. Although it has launched electric models, gasoline bikes still account for the majority of sales.
Since the announcement of the ban, Honda’s sales plunged nearly 22% in August, and though September showed mild recovery, year-on-year figures remain down by double digits. Sources say Honda may scale back production in Vietnam but has no plans to shut down local factories.
Electric shift fuels VinFast boom
While foreign motorcycle makers face headwinds, Vietnam’s homegrown electric vehicle manufacturer VinFast is seeing explosive growth. The company sold 70,000 electric motorbikes and bicycles in the second quarter of this year, up 55% from the previous quarter, and industry data shows VinFast’s e-motorbike sales have quadrupled.
The government has rolled out subsidies and incentives to encourage electric adoption, but affordability remains a challenge. The support isn’t enough to replace all her fleet, said Bao Ngoc Cao, who rents out motorcycles in Hanoi. “We are just waiting to get more clarity and see what happens.”
Dat Bike founder and CEO Son Nguyen said policy incentives help, but the industry’s long-term success depends on delivering efficient, long-range, fast-charging models at prices comparable to—or cheaper than—gasoline bikes.
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