Vietnam is quickly emerging as the latest investment hotspot that is drawing the attention of Taiwan bicycle and parts manufacturers. Local producers are steadily increasing their investment in the Southeast Asian nation, which offers new possibilities for low-cost production. To date, nearly 50 Taiwan bike and parts producers have either set up production or have plans to build factories in Vietnam, with others likely to follow. Next to China, Vietnam is now the second largest overseas manufacturing base for the Taiwan bicycle industry.

Recently chain maker KMC Industrial Co. announced that it will invest in a new factory near Ho Chi Min City, but the shift toward Vietnam really began in 1998 with Kenda Rubber Ind. Co. and Union Rubber Ind. Co. becoming two of the first investors, followed soon after by MT Racing Inc., Yuh Jiun Industrial Co., and Acetrikes Industrial Co. MT Racing's new plant will reportedly turn out 40,000 bikes per month, while Yuh Jiun's new plant is expected to start production in May with annual output estimated at 600,000 bikes.

Further interest in Vietnam was evident when a delegation of more than 10 Taiwan bicycle parts makers, led by KMC, traveled there early this year to investigate the country's investment potential. Following the expedition, several of the companies from the group such as KMC, Hin Lung Corp., Falcon Cycle-Parts Co., VP Components Co. and others, chose to invest a total of US$10 million in Vietnam. Seemingly encouraged by a Vietnam government open to bicycle business enterprises, Taiwan investors are positioned to step up production there.

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