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||26 December 2009
Vietnam: Chinese bike firm poised to ride the Asean-China FTA
As China and Asean (Association of Southeast Asian Nations) start implementing the free trade agreement in January 2010, Chinese businesses with footholds in Asean are ready to make the most out of the FTA, reported VNBusinessNews.com.
One of the Chinese companies eyeing market opportunities in Vietnam is a motorcycle company Lifan which has established a production base in Hung Yen seven years ago.
The province, thirty kilometers away from Hanoi, has now grown into an industrial zone comprising of 11 factories making motorcycle parts and assembling motorcycles, Chinese news agency Xinhua reported.
"As Vietnam and China embrace the upcoming China-Asean Free Trade Area (FTA) in the beginning of next year, the competitiveness of Lifan products will be further enhanced in Vietnamese market," Chen Jianyu, general manger of Lifan Vietnam told Xinhua in a recent interview.
"The FTA will facilitate the two-way trade and investment, and thus lower the operation cost of the company," said Chen.
Scheduled to take effect as of Jan. 1, 2010, the China-Asean FTA include China and ten Southeast Asian countries namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
The FTA is expected to become the world’s third largest free trade area with a combined population of 1.9 billion and a combined gross domestic product (GDP) close to $6 trillion.
Vietnam is a country known for living on motorcycle. The country, with the population of 86 million, has 20 million motorcycles. About 2.5 million to 2.6 million motorcycles are sold on average each year.
Chen said Vietnamese motorcycle market is dominated by Japanese brand like Honda and Yamaha. After seven years of development, Lifan has finally managed to set a foothold in the market. It produced 100,000 motorcycles and 300,000 motor engines for Vietnamese market last year.
"Lifan has its ups and downs in Vietnamese market," said Chen. "In the recent couple years, Lifan has been recognized by more and more Vietnamese customers as product quality improves. The products are now sold in over 400 shops all over Vietnam."
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