Vietnam is known as the kingdom of motorcycles - and for good reason. It's common to see the vehicles roaring down city streets in the country. As of May 2016, there were 45 million registered motorcycles in Vietnam. Chinese manufacturers have long had a presence in the country and at one point controlled 80 percent of the market for new motorcycles. Over the following years after 2000, a vicious price war among Chinese manufacturers eroded their market share as Chinese-made motorcycles lost their reputation for quality, opening the way for Japanese competitors. Several Chinese manufacturers now see a new opportunity in selling electric motorbikes in Vietnam, but analysts warn that a similar price war might break out all over again.
The golden age for Chinese motorcycle makers in Vietnam has ended.
During the first eight months of 2016, China's motorcycle exports to the Southeast Asian country fell about 5 percent from the same period in 2015, said Zhang Lihua, an executive of Chongqing Lifan Holdings Co, a leading motorcycle maker based in Southwest China's Chongqing.
"The decline will grow even larger by the end of this year," Zhang told the Global Times on Sunday.
The situation is the same in other Southeast Asian countries, Zhang said.
"You just don't see as many Chinese motorcycles driving down the streets there."
Lifan, which opened a motorcycle assembly plant in Vietnam in 2002, was among the first Chinese companies to dip a toe in the Vietnamese market.
In 2013, the company's subsidiary in Vietnam, which has a registered capital of $1.57 million, reported a net loss of 1.9 million yuan ($284,800) in 2013, according to a company filing with the Shanghai Stock Exchange in May 2014.
The executive refused to discuss how the company has fared more recently, other than saying that most Chinese motorcycle firms were still making losses in the Vietnamese market.
Experts said that the losses are a direct result of the price war that the Chinese companies themselves started in the Vietnamese market.
'China shock'
Chinese motorcycles received a warm welcome in Vietnam in the early 2000s, which scholars and researchers often refer to as the "China shock."
From 2000 to 2001, Vietnam imported enough motorcycles from China to make its neighbor to the north its largest supplier of the vehicles.
It was a turning point for the industry, according a 2013 article published by Mai Fujita, deputy director with Southeast Asian Studies Group II of Japan's Institute of Developing Economies.
Local assemblers of Chinese motorcycles accounted for 80 percent of the market in Vietnam at the end of 2001, Mai wrote.
Xu Ningning, executive president of China-ASEAN Business Council, attributed the Chinese companies' initial success to the high quality and low prices of their products.
Those advantages, however, didn't last long. In 1999, for example, when Chinese companies made their first foray into Vietnam, Chinese motorcycles were 20 percent cheaper than South Korean motorcycles and 30 percent cheaper than Japanese motorcycles, the Beijing-based China Economic Weekly magazine reported in May 2014.
It wasn't long before a price war broke out among Chinese manufacturers, Zhang said.
It was a fierce fight. For example, a Lifan 110C motorbike retailed for $1,400 in Vietnam in 1999. The next year, the price had fallen to $800. By 2001, the model cost just $650.
The price cuts came with their own costs, however.
