In most Southeast Asian countries, motorcycles are the way of life. The majority of the residents solely rely on their motorcycles for private and commercial purposes, such as ride-hailing or delivery services. Besides, motorcycles are affordable, fast enough to breeze through the traffic jam, and perfect for the tropical climate!
For these reasons, there is no better guarantee of ever-present demand for Vmoto Limited (ASX: VMT) than Indonesia, Southeast Asia’s largest motorcycle market. The Company has entered into a strategic technology and investment agreement with Charged Asia Pte. Ltd (Charged Asia), which owns 100% of PT Industri Charged Mobilitas and PT Charged Tech Indonesia (Charged Indonesia).
Vmoto has agreed to invest up to $4.5 million by way of credit offsets on batteries and electric vehicles supplied from Vmoto to Charged Asia or its subsidiaries over a 3-year period. In return, Vmoto will receive equity of 8% in Charged Asia, which currently has an investment valuation of USD $38 million. Vmoto will also act as the core technology partner of Charged Indonesia, providing all necessary technical assistance to Charged Indonesia in relation to electric motorcycles products.
Kickstarting their venture in Indonesia allows Vmoto to access the world’s top three motorcycle industries following its existing presence in India and China. In Indonesia, Vmoto is targeting the growing electric motorcycle market that is projected to reach 55m units by 2030. With favourable government policies and increasing public awareness to achieve less air and noise pollution and climate gasses, the conversion rate of petrol motorcycles to electric motorcycles is expected to be accelerated.
Mr Charles Chen, Managing Director of Vmoto remarked, “We are proud to be an integral part of Charged Asia’s mission and vision for Indonesia as they scale up within the third largest motorcycle market in the world capable of distributing anywhere between 5 million to 8 million new motorcycles every year.”
Charged Indonesia is a scale-up electric motorcycle technology company focusing on providing Electric Vehicles as-a-service (EVaaS) to Indonesian customers. It aspires to lead the sustainable mobility movement by deploying affordable vehicles while simultaneously reducing greenhouse gas emissions and supporting government policies in encouraging the use of renewable energy resources.
For the quarter ended in September 2022, Vmoto sold a total of 11,809 units from its B2B and B2C product range, with more than 88% of these units being sold into international markets. Total international units sold were 10,422, an increase of 5% from the prior corresponding period (pcp). The Company closed off the quarter with $26m cash at bank and no debt. In the second half of FY22 (ending 30 June 2022), the Company reported a net profit of $7.16m, which was a 76% increase pcp.
As an overview of Vmoto’s operations in Asia, the Company notes that it is making good progress in the Indian market. From January to September 2022, the Company sold 5,000 sets of Complete Knock Down (“CKD”) parts that are then assembled in India by local customers and sold in that market. The CKD units are not included in the international unit sales figure.
Meanwhile in China, Vmoto’s manufacturing facility in Nanjing remains fully operational with no material impacts being felt despite the disruptions caused by both the COVID-19 pandemic and the Ukraine-Russia war.
Clara is a Business Reporter for The Sentiment.
Latest posts by Clara Venisha (see all)
- IPO Watch: The Australian Wealth Advisory Group set for ASX entrance - December 15, 2023
- Harris Technology gears up for Christmas as consumer electronics and household tipped to be among most popular purchases - November 27, 2023
- Linius Technologies sprints into the US college sports with automated game highlight technology - November 23, 2023
Leave a Comment
You must be logged in to post a comment.