Japan has lodged formal objections to Vietnam's ambitious plan to phase out petrol-powered motorbikes in Hanoi, arguing the accelerated timeline threatens to bankrupt suppliers and eliminate thousands of jobs in a market worth R85.7 billion annually, according to confidential documents obtained by Reuters.

Vietnamese authorities announced the contentious policy in July when Prime Minister Pham Minh Chinh declared petrol motorbikes would be barred from entering Hanoi's centre from mid-2026 onwards. The government intends to broaden these prohibitions by 2028 and eventually extend them nationwide as part of its strategy to combat hazardous air quality.

Tokyo's embassy in Hanoi has since lodged a formal protest with Vietnamese ministries, cautioning that hasty implementation risks devastating "supporting industries" encompassing dealerships and parts manufacturing, according to an official embassy summary of the communication. Embassy officials refused to make the complete letter available, which is now emerging publicly for the first time.

Diplomatic correspondence urged Vietnam to adopt an "appropriate roadmap" incorporating sufficient lead time and incremental regulatory rollout for the transition to electric transportation.

The embassy declined to confirm the letter's timing, although one Japanese government insider disclosed it was delivered in September.

Vietnam's motorcycle sector represents one of the world's most lucrative markets, estimated at R85.7 billion for 2024 by research firm Mordor Intelligence, with motorbike registrations reaching approximately 80 million last year in a nation of 100 million inhabitants, marking one of the highest penetration rates internationally.

The principal industry body representing foreign motorcycle producers in Vietnam, dominated by Honda alongside Yamaha and Suzuki, dispatched separate correspondence to government ministers in July, alerting them that the ban risks "production interruptions and the risk of bankruptcy" across the entire supply ecosystem, based on a copy of the letter examined by Reuters.

Manufacturing representatives warned of "spillover effects" threatening hundreds of thousands of livelihoods, pointing to severe consequences for approximately 2 000 retail outlets and some 200 parts suppliers nationwide.

Industry leaders have called for establishing a transitional framework "with a minimum preparation time of two to three years" giving companies opportunity to retool manufacturing operations whilst charging infrastructure and regulatory standards are put in place.

Vietnamese officials have consistently dismissed these appeals from both Tokyo's government and private industry, three people briefed on the discussions revealed. All individuals who spoke with Reuters insisted on anonymity due to the politically sensitive nature of the dispute.

Vietnam's government failed to respond to multiple requests for comment.

Authorities have justified the prohibition as indispensable for addressing Hanoi's critically poor air quality. Leadership in Ho Chi Minh City, Vietnam's economic powerhouse, has similarly announced forthcoming restrictions on petrol-powered transport.

When confronted about the electrification concerns, Prime Minister Chinh reassured Japanese corporate leaders in August that emissions reduction represents a universal challenge requiring cooperative action "to choose the most optimal solution with a suitable roadmap," government records show.