It has been an extremely difficult year for Australia’s automotive sector, but Perth-based scooter manufacturer Vmoto has provided some light at the end of the tunnel.
The company, which is listed on the Australian Securities Exchange, announced yesterday that it has scored a deal to produce 30,000 scooters for the Vietnamese market, one of the world’s biggest consumers of motorcycles.
The deal follows an earlier agreement to produce 30,000 units of its cutting-edge 125cc water cooled fuel injected engine to a Vietnamese customer. The customer has now upgraded that order from engines to complete scooter units. The deal is worth $US23 million ($30 million).
Vmoto’s managing director, Patrick Davin, said the deal would effectively underwrite the company’s Nanjing factory in China.
“Significant profit margins will be made from this sale, which will quickly translate to the company’s bottom line.
The agreement has scope to be expanded from 30,000 units a year to 100,000, depending on the strength of initial sales in Vietnam. The country is one of the world’s biggest scooter markets, with 1.5 million units sold last year.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
