【By Observer Net, Pan Yuchen; Editor: Gao Xin】According to Reuters on October 21, the Japanese government and some Japanese motorcycle manufacturers have warned Vietnam that its plan to ban gasoline-powered motorcycles in Hanoi could lead to unemployment and disrupt the Vietnamese motorcycle market dominated by Honda, valued at 4.6 billion USD (approximately RMB 32.77 billion).

To reduce air pollution, in July this year, Vietnam's Prime Minister Pham Minh Chinh issued an administrative decree to prohibit gasoline motorcycles from entering the center of Hanoi's capital from mid-2026; by 2028, more extensive restrictions will be implemented, and it is expected that the ban will cover other regions of the country.

In response, the Japanese embassy in Hanoi wrote to the Vietnamese government, stating that the ban may affect employment in supporting industries such as motorcycle dealers and parts suppliers, and urged the Vietnamese government to consider a suitable electrification roadmap, suggesting a phased implementation of the ban and leaving a preparation period.

People riding motorcycles in Vietnam, Reuters

A Japanese government official said that the letter was submitted in September, but the Japanese embassy refused to disclose the full content of the letter and the specific date of sending.

Similarly, foreign motorcycle manufacturers led by Honda had written to the Vietnamese government as early as July this year, warning that the gasoline motorcycle ban could lead to production disruptions and bankruptcy risks for companies in the supply chain, affecting the employment of hundreds of thousands of workers, and listing potential disruptions for nearly 2,000 dealers and about 200 parts suppliers.

Motorcycle manufacturers also urged the Vietnamese government to implement a transition period for the ban, "with a minimum preparation time of two to three years," allowing companies time to adjust their production lines while expanding the charging station network and safety standards.

According to a source, a representative from Honda privately proposed that, as a response to the ban, the company might consider reducing its production in Vietnam. However, Honda's official stated that they are closely monitoring the situation but have no plans to close the factory. So far, Vietnamese officials have refused to take action on the requests from the Japanese government and manufacturers. The Vietnamese government has not responded to the request for comment.

Honda has four factories in Vietnam, and its motorcycle sales dominate the market, with its brand name becoming a shorthand for "motorcycle" in Vietnamese. After the ban was announced, Honda's sales in Vietnam fell by nearly 22% in August compared to the previous month, and slightly rebounded in September. However, compared to the same period last year, Honda's sales in August and September dropped by double digits.

Due to the global automotive industry's shift toward electrification and increased competition, Honda's car business profit is under pressure, and it increasingly relies on profits from the motorcycle business. Most motorcycles sold by Honda in Vietnam and around the world are powered by gasoline, but they also offer electric models such as CUV e: and ICON e:.

At the same time, Vietnam's electric vehicle company VinFast, which is listed on NASDAQ, saw sales of electric motorcycles and electric bicycles reach nearly 70,000 units in the second quarter of this year, a 55% increase from the previous quarter. According to a consumer survey conducted by market research company Asia Plus in September this year, it is expected that VinFast's sales will surge after the ban is implemented.

Additionally, the proposed ban measures have also affected gasoline car sales in Vietnam. Members of VAMA, Vietnam's largest automobile association (including several Japanese brands), saw a 18% decline in gasoline car sales in September this year. VAMA stated that the gasoline motorcycle ban would not directly affect cars, but acknowledged that some customers would hesitate to buy gasoline cars.

The Vietnamese government has stated that the ban is necessary to address high levels of air pollution in Hanoi. In August, Pham Minh Chinh told Japanese business leaders that reducing emissions is a global issue that requires joint efforts to choose appropriate solutions. In addition to the capital Hanoi, Ho Chi Minh City, Vietnam's largest city, also announced plans to restrict gasoline vehicles.

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