(Recasts, adds comments from dealers, embassy, economist)
By Christina Toh-Pantin
HANOI, Sept 19 (Reuters) - Two of Vietnam's biggest foreign manufacturers of motorcycles have been hit by quotas on imported components but the government shows few signs of relaxing the curbs soon.
The Vietnam unit of Suzuki Motor Corp said on Thursday it may be forced to suspend its output of motorcycles in November and December if the restrictions are not eased.
"...we shall stop to produce M/C (motorcycles) in the last two months of this year if the quota is not lifted," Nguyen Van Binh, deputy general director of Vietnam Suzuki Corp, said in a statement replying to questions from Reuters.
It was not clear why the import ceiling had been imposed. Vietnam has been concerned about a widening trade gap, as well as congestion on its roads and a high accident rate. It has also been pushing motorcycle makers to source more of their components locally rather than importing them.
The immediate result of the quotas has been a rise in motorbike prices, particularly for the Honda, whose name is synonymous with motorcycle in Vietnam.
On Wednesday, Honda Vietnam Co Ltd, a joint venture with a Vietnamese firm and a unit of Honda Motor Co Ltd , said it had temporarily stopped making bikes in Vietnam after it ran out of parts. It has not said when it will resume output.
Another key foreign motorbike assembler, Yamaha Motor Co Ltd , may be the next to issue a warning. It plans to build 80,000 units in Vietnam in 2002 but has been allocated a quota of just 50,000.
Motorcycles flood the streets of the Southeast Asian country, which this month set overall import quotas on motorcycle components at 1.5 million sets this year versus 1.8 million in 2001. Of those, 600,000 sets are reserved for foreign invested producers and the balance for roughly 50 local firms.
Vietnam, with a population of around 80 million, has more than nine million motorcycles in use.
Suzuki had been looking to produce 50,000 units this year in Vietnam but its quota was just 35,000.
Honda was set a limit of 280,000 imported motorcycle component sets this year, but it has already built 281,629 motorcycles and wants permission to import another 306,000 component sets to meet rising demand.
SUZUKI OPTIMISTIC
Suzuki's Binh expressed optimism the government would ease the restrictions: "We are expecting the government (to) reconsider this matter and making additional allocation to Honda Vietnam, Suzuki Vietnam and Yamaha Vietnam soon."
But Vietnam's trade ministry has vowed to stand firm on the quota. The Saigon Times Daily quoted Deputy Trade Minister Mai Van Dau on Thursday as saying the rule would not be relaxed.
The Japanese have given the issue high priority. An official at the country's embassy in Hanoi said the ambassador has registered objections with Vietnam's prime minister "requesting the Vietnamese government withdraw or cancel the matter".
Analysts say questions about the quality of local components will prompt motorcycle assemblers to source parts from overseas. "They (the local makers) are not ready in terms of quality and dependability," said an economist based in Hanoi.
Hanoi motorbike dealers said the price of the popular Honda Wave Alpha has risen sharply to between 13.6 million and 15.0 million dong ($888-$980) in the past two weeks, compared with a price of 10.99 million dong ($718) Honda has set for retailers.
"Customers will stand back and wait for the fever to cool," one shop manager said. (Additional reporting by Edwina Gibbs in Tokyo, Ho Binh Minh in Hanoi)