The Group is devoted to producing automobile and motorcycle component parts. Downstream in the motorcycle industry refers to the assembled and ready-for-sale motorcycles. The midstream products include engines, power station system, steering system, brake system, tires and wheels system. Upstream is primarily the manufacturing of the components in the midstream products. Eurocharm Group is a midstream manufacturer in the automobile body and chasis system and in the medical equipment industry, selling products to brand customers.

Global Auto Industry

In 2022, the global car market was expected to show a downward trend. Among the top five countries in terms of sales, China was affected by the lockdown in Shanghai in the first quarter, which impacted the global automotive component supply chain. In addition, although the global chip shortage has been eased, it still affects the performance of the top three car markets-China, the United States, and Japan. Furthermore, the outbreak of the Russia-Ukraine war also affected the supply chain of components in nearby countries. Although the global trend has been gradually moving towards coexisting with the pandemic, the car market is still showing a downward trend. If India can control and stabilize the pandemic with strict curfews and the implementation of the Disaster Management Act, it is hopeful that the car market can perform steadily. The sales performance of the market will be directly affected by how quickly the chip shortage will ease, how long the Russia-Ukraine war will last, and whether the COVID-19 pandemic in important countries of the automotive industry supply chain will rise again.

Given the electric vehicle market trend in 2022, Hybrid Electric Vehicles (HEV) currently are competitive in terms of cost-effectiveness and the advantage of not requiring users to change their habits. However, with various countries providing more benefits to Battery Electric Vehicles (BEV) and Plug-in Hybrid Electric Vehicles (PHEV), the growth rate of HEV is slowing down, and it is estimated that the sales may be overtaken by BEV for the first time. Consumers can charge their PHEV with the lithium battery on their own, and although in China, the main market of PHEV, sale is gradually slowing down under the increasing emphasis on pure electric vehicles, PHEV are still competitive because of its BEV feature under pure electric mode as well as running through the fuel system when the power is exhausted, considering that charging stations are not widely available yet. BEV, which is powered 100% by the battery, can achieve the highest energy-saving efficiency. Manufacturers put their focus on developing and improving features of long endurance and fast charging technology. Driven by policy benefits offered in various countries, the market share of BEV continues to increase. Fuel cell vehicles have stable sales and have the potential in the commercial vehicle application, with actual sales in ten countries worldwide. Looking ahead to the future, with the extension of battery life, the increased density of charging facility, the maturity of fast charging technology, and the electric vehicle price approaching the market expectation, as well as the benefits driven by various countries’ targets for carbon reduction, automaker layouts, and post-pandemic subsidies, it is estimated that the global electric vehicle market will grow by 35.8% in 2022, reaching a scale of 15.408 million vehicles.

Global Industry of Motorcycles

The size of global motorcycle market in 2021 was 54.85 million units, with Asia being the largest market in the world, including India, mainland China, Indonesia, Vietnam, the Philippines, and Thailand, each with annual sales exceeding one million units. Taiwan and Japan had a combined sales volume of 1.188 million units. The Chinese and Japanese markets increased by 34.5% and 15.3% respectively in 2021, while the major Southeast Asian markets (Indonesia, the Philippines, Thailand, Vietnam, and Malaysia) declined by 13.1%. In 2021, Asia accounted for 86.8% of the global motorcycle market.

Analyzing the annual sales trends in each major region, Latin America grew by 53.9% annually, while other regions decreased by 75.5%. In 2021, Latin America accounted for 9.4% of the global market; other regions accounted for 0.6%. North America declined by 3.3% in 2021, and Europe (including only France, Germany, Italy, Spain, the United Kingdom, Belgium, the Netherlands; other countries are without statistical data due to the pandemic) decreased by 2.4%. In 2021, North America accounted for 1.0% of the global market, and Europe (France, Germany, Italy, Spain, the United Kingdom, Belgium, and the Netherlands) accounted for 2.2%.In 2021, COVID-19 and its variants continued to spread, causing strict lockdowns in markets such as India and Vietnam for several months, which had a significant impact on motorcycle sales in Asia. China, on the other hand, saw a slowing of the pandemic and an increase in sales of electric motorcycles, leading to a 34.5% annual growth in the motorcycle market. The size of global motorcycle market reached 54.85 million units in 2021, a 6.2% increase from 2020.

With the promotion of shared micro-mobility vehicles such as shared motorcycles, bicycles, and scooters, and due to market saturation, the demand in some regions declined. The volatile international situation has caused an increase in raw material costs, putting pressure on motorcycle prices. However, thanks to the “post-pandemic” rebound in major motorcycle markets and policies encouraging the replacement for electric motorcycles, the size of global motorcycle market is expected to rebound to 55.39 million vehicles in 2022.

In 2021, the International Energy Agency (IEA) released a special report on the “Net-Zero Emissions Roadmap for the Global Energy Sector to 2050”, which suggested that countries should stop selling internal combustion engine vehicles by 2035. Japan and California of the United States announced the target of banning the sale of fuel vehicles in 2035. The Japanese government officially announced that it will achieve net zero emissions of greenhouse gases by 2050. France and Spain are expected to complete the ban on sales by 2040. In 2021, the Ministry of Renewable Energy of Indonesia proposed a plan to sell all-electric two-wheelers in 2040, and only sell electric vehicles nationwide in 2050. The Ministry of Renewable Energy of India has invested INR$950 million since 2011 to subsidize locally made electric vehicles, and even consider banning the sale of 150cc fuel motorcycles from 2025. European countries such as the United Kingdom have announced that they will stop the sale of fuel vehicles as early as 2030. France plans to completely stop the sale of gasoline and diesel vehicles from 2040. Germany, Belgium, Denmark, the United Kingdom, and India will completely ban the sale of new fuel vehicles in 2030. Vietnam, a major motorcycles country in Asia, has also stipulated that fuel vehicles will be banned from entering Hanoi in 2030. Under the premise that advanced countries such as the European Union, the United States, and Japan have committed to net-zero transformation, the wave of electrification is imperative, and global fuel vehicle manufacturers are also striving for transformation to seize the key markets of the next generation. Electric motorcycles and traditional motorcycles have many components in common, including body, steering, braking and shock absorber systems. The Company mainly produces aluminum parts, stamping parts, welding parts and relavant locomotive metal parts, which can be shared with electric motorcycles.

Motorcycle Trends in Vietnam

Due to factors such as the lack of public transport institutions in Vietnam, and the fact that the price of cars is still higher than the income level, and electric motorcycles with a displacement less than 50cc can be driven without a driver’s license, traditional motorcycles have been widely popular as a means of transportation, and the market has reached a saturated state. Vietnam is the fourth largest motorcycle market in the world. The Vietnamese motorcycle industry is mainly comprised of five major companies, including Honda, Piaggio, Suzuki, SYM, and Yamaha. Despite the severe impact of the pandemic, motorcycle sales increased by 29%, indicating that these items are still attractive in the market. In addition, Vietnam has stipulated that the sale of fuel motorcycles will be banned in 2030, with the goal of reducing carbon dioxide emissions by 8% by 2030. According to estimates by Hanoi University, Vietnam’s electric motorcycles account for only 1.5-1.8% of Vietnam’s total motorcycles sales. In the future, problems such as improving charging infrastructure need to be solved.

Medical Equipment Market

The company’s medical equipment production, including patient hangers, bath chairs, commode chairs and medical beds, is mainly sold in Japan, Europe and North America. According to the statistics of BMI in 2021, the global medical equipment market size in 2021 is US$454.3 billion, an increase of 6.3% over 2020. It is estimated that it will reach US$535.2 billion in 2024, with a compound annual growth rate of about 5.6% from 2021 to 2024.

In 2021, the global medical equipment regional market is still dominated by the Americas, accounting for 46.7% of the global market. Followed by the Western European market, accounting for 25.6% of the global market. The Asia-Pacific region accounted for 20.5% of the global market. Central and Eastern Europe accounted for 4.3%. The Middle East and Africa accounted for 2.8%. In general, the ranking of regional markets in the future will not change much. The Americas, Western Europe, and Asia-Pacific regions are still the top three markets, but their proportions have increased slightly.

The major markets in the Americas include the United States, Canada, Mexico, and South America. In 2021, the market in the Americas accounted for 46.7%, which was close to the figure in 2020. The growth of the markets in the Americas are mainly linked to that in the United States. Due to factors such as the aging of the baby boomer generation and the continued decline in birth rate, population of the aged 65 and above continues to rise. In addition, chronic diseases have been increasingly prevalent over the years, leading to the continuous growth of overall healthcare spending in the United States. Furthermore, the COVID-19 pandemic also increased healthcare demand. Total healthcare spending in the U.S. reached $4.2 trillion in 2021, a 9.7% increase from 2020, and overall healthcare spending accounted for 18.4% of GDP. The proportion of healthcare spending to GDP in the U.S. is already the highest in the world.

After President Biden took office in 2021, the “Build Back Better Act” was launched to prevent the spread of COVID-19. One of its key policies is the “American Rescue Plan Act” (ARPA), which allocates $1.9 trillion for cash payments to households, extended unemployment subsidies, vaccine distribution, as well as incentives for the supply chain to reshore, production in the U.S., and procurement of American-made products. The ARPA, signed into law in March 2021, slightly expanded the scope of the “Affordable Care Act”, allowing those who already have medical insurance to save on premiums or purchase more comprehensive coverage through subsidies. The significant investment from ARPA has also led to the highest number of insured Americans in history. Additionally, the ARPA provides $47.8 billion to expand COVID-19 examination for federal, state, and local government and increase investment in expanding laboratory testing capacity and mobility to strengthen tracking and monitoring of infections. In August 2021, it was announced that billions of dollars from the ARPA would be provided to improve healthcare in the rural areas and to address long-term medical needs due to COVID-19. These measures have provided strong support for the growth of the American market.

Western Europe is still the second largest market in the world, including France, Italy, Greece, Sweden, Spain, Austria, Belgium, Portugal, Finland, Germany, Switzerland, the United Kingdom, Denmark, the Netherlands, Norway, and Ireland. In 2021, the market in Western Europe accounted for 25.6%, compared to 25.3% in 2020, showing a slight increase. This is mainly related to the huge demand for elderly care in Europe and the growth of the medical device market driven by the needs for pandemic prevention. First, there is a mid- to long-term demand for healthcare due to the fact that Western Europe has the most aged population in the world; the entire region has entered the “super-aged society” with an over 14% aged population. With the continuous increase of the elderly population, the demand for related medical care products continues to grow, which also increases the financial burden on the governments in Western European countries. Second, since the COVID-19 pandemic occurred in 2020, countries had to respond to various control measures and the crisis of possible collapse of the medical system. Even in 2021, the highly infectious Delta variant of the virus prevailed, bringing more uncertainty to the recovering Eurozone economy. As Europe has launched a comprehensive vaccination campaign, the pandemic has gradually come under control, although not yet subsided. With the increase in vaccine coverage, various restrictive measures are gradually being lifted, and European countries are slowly moving towards coexistence with the virus, lives are slowly returning to normal, and the economy is gradually recovering.

The medical equipment market in the Asia-Pacific region is still dominated by China and Japan. In 2021, the Asia-Pacific market accounted for 20.4%, a slight decrease from 21.4% in 2020. The larger growth momentum came from Japan and China, which were most affected by the pandemic. Japan is the country with the highest level of aging population in the world and its socioeconomic development has been greatly impacted by the aging society. The expenditure on healthcare and care services remains high, and the increasing number of elderly people has further exacerbated Japan’s financial pressure from elderly care. In addition, Japan has been affected by the COVID-19 pandemic, leading to a continuous increase in medical expenditures. The hosting of the Tokyo Olympics in 2021 further raised the domestic infection rate and posed a severe challenge to its domestic economy, while also adding uncertainty to the growth of the Japanese medical equipment market. Although the demand for certain medical products has increased, the pressure on medical resources caused by COVID-19 as well as the accompanying decline in economic activities has caused a decrease in the usage of most other medical devices. Moreover, the interruption of the supply chain and external uncertainties have also affected the growth rate of medical equipment exports. In early 2020, the COVID-19 broke out in China. In 2021, strict prevention policies and that fact that fully vaccinated people reach 85% of the population, COVID-19 has been subsided, resulting in a gradual reduction in overall demand for medical care. However, as the COVID-19 pandemic in China became under control, the demand for medical equipment derived from the pandemic, such as automatic temperature measurement devices, blood oxygen monitors, medical supplies (including medical gloves, protective clothing, medical masks), electrocardiographs, ventilators, disinfectants, and extracorporeal diagnostic medical devices, has gradually decreased; supply of medical equipment in China has gradually returned to normal. As a result, the demand for advanced clinical imaging scans and clinical surgeries has also returned to pre-COVID levels, driving the sales growth in high-end imaging equipment such as magnetic resonance imaging, and computed tomography. Demand for clinical surgery equipment, mainly orthopedic medical devices and endoscopes, has also returned to pre-COVID level, leading to sustained growth of the overall medical equipment market in China in 2021. However, as governments worldwide decided to gradually coexist with the COVID-19 virus, China still temporarily maintained strict “zero-COVID policy” in order to avoid the collapse of domestic medical resources caused by a large-scale pandemic. China’s international business and domestic economy were seriously affected.

In 2021, the top ten single markets for medical equipment globally were the United States, Germany, China, Japan, France, the United Kingdom, Italy, Canada, the Netherlands, and South Korea. Compared to the ranking in 2020, China surpassed Japan and moved up to the third place, the Netherlands replaced Spain as the ninth greatest market, while South Korea remained at the tenth place.

In terms of product sales by category, “other medical equipment” took the highest proportion in 2021, accounting for 27.8% of the market share, which is a slight increase from 27.5% in 2020. This category includes products such as electric and manual wheelchairs, dialysis equipment, endoscopy equipment, anesthesia equipment, blood pressure monitoring products, medical furniture, and ophthalmic equipment. As these products are developed in response to various diseases and essential for treatment, they are part of the basic equipment and consumables in hospitals, and thus, the sales were growing rapidly, driven by the demand for the pandemic. As the pandemic eases, their growth rate has returned to the normal cycle.

The largest single category is the diagnostic imaging products, accounting for about 23.9%, an increase of 0.3% compared with 23.6% in 2020. Due to its long life cycle of, the replacement period of the diagnostic imaging products in the hospital is about 7-8 years. Although the unit price of the product is high, the overall market size is not as large as the category of other medical materials and medical supplies. Medical supplies accounted for 16.5%, a significant decrease of 4.9%, compared with the proportion in 2020. Such products are proportional to the number of people who need medical care. The major reason for such decrease was because the prevalence of COVID-19 pandemic in 2020 drove the need for necessary medical supplies, resulting in a rapid growth of this market in 2020 that brought a higher market baseline. On the other hand, assistive devices accounted for 13.0%, a decrease of 1.2% from 14.2% in 2020; dental products accounted for about 7.4%, an increase of 2.4% compared with 5.0% in 2020. Orthopedics and implants products accounted for about 11.5%, an increase of 3.2% compared with 8.3% in 2020. Orthopedics and implants as well as dental products are the two categories with the smallest structure. Due to the impact of the COVID-19, medical institutions have suspended non-urgent medical needs to reduce the risk of infection, and non-urgent surgeries and treatments have been postponed. The reductions in non-essential medical treatment and non-life-threatening dental procedures have also been greatly reduced, thus making these two categories even smaller in terms of market size. However, driven by economic growth and the improvement of health awareness, the demand for dentistry and orthopedics is still there. It is expected that after the pandemic, market growth in dental equipment and orthopedics will be accelerated.

Relations among upstream, midstream, and downstream industry

IndustryAutomobilesMotorcyclesMedical Equipment
Auto Parts and AccessoriesMaterials, motorcycle partsElectronic parts, plastic parts, hardware parts
Auto assembly, repair and technical servicesMotorcycle assembly, repair and technical servicesR&D, design and manufacturing of medical devices
DownstreamAuto sales, import and exportMotorcycle sales and serviceMedical equipment sales and distribution

Product Development Trend

Auto Industry

In the next 10 years, the global auto industry will face the most significant change in history, with electric vehicles replacing internal combustion engine vehicles. The overall auto market was underperforming due to chip shortages, while the electric vehicle market is showing substantial growth. DIGITIMES Research predicts that the penetration rate of the electric vehicle market will exceed 30% in 2025, and the compound annual growth rate of electric vehicles will exceed 50% from 2020 to 2025. The development trend of the electric vehicle industry is towards the development of the new four modernizations such as “flattening” supply chain, “people-friendly” price, “popularization” of charging station, and “intelligent” electric vehicle design.

The number of components required for pure electric vehicles is estimated to be 30% to 40% less than internal combustion engine vehicles, and the manufacturing process is more simplified and involves fewer suppliers. Therefore, the supply chain is less stratified, and the winner of the supplier, should have more bargaining power than the small original equipment manufacturer. In the short term, the price of batteries and traction motors may continue to drive up electric vehicles manufacturing costs. The profit margin of pure electric vehicles for original equipment manufacturer, probably not as profitable as electric vehicles battery makers and their suppliers of specific components.

In the medium to long term, with market concerns over electric vehicles performance (such as battery durability, driving experience and platform construction) receding, future growth will be driven by incentives, regulations, subsidies, local advantages and customer preferences. Likely winners will include electric vehicles suppliers focusing on specific component. These auto suppliers have established scale in key areas, and increased bargaining power. A successful transition between internal combustion engine vehicles and new energy vehicles (including electric vehicles) with balanced original equipment manufacturer, and new entrants that can scale quickly. Investors need to be mindful of these factors to identify emerging winners and losers and actively reposition their portfolios to grasp on investment opportunities.

Motorcycle Industry

As global warming and air pollution continue to simmer, auto manufacturers are launching environmentally friendly products to help preserve the planet. With the current research and development towards advanced technology, automotive manufacturers are exchanging ideas with their long-term suppliers who are the parts manufacturers. This is beneficial to both the upstream and middle stream companies as they can apply newly developed technologies to manufacture components of higher quality and profits.

In addition, the demand for motorcycles has been rising over the years as countries in Southeast Asia started to develop economically. Manufacturers such as Honda, Yamaha, Piaggio, and Suzuki had already taken this opportunity to invest in Association of Southeast Asian Nations (ASEAN) for their relatively cheaper labor cost and more competitive components while assembling products to be sold locally. A few of the fast-growing countries in Southeast Asia, including Indonesia, Vietnam, and Thailand, are valued as markets with the most potential, which has become the targets for competitors in the industry. VPIC1 Vietnam has become a major local supplier and is actively exploring the development potential of other ASEAN markets. Major auto factories in Vietnam have been gradually adjusting strategies and using the concept of the ASEAN+5 free trade area to shift sales focus from domestic to overseas markets. In addition, the Company is also following the strategies of major manufacturers and adding many new production processes and precision equipment to improve product quality and streamline production processes, which will serve as the company’s competitive advantage in future market development.

Medical Equipment Industry

COVID-19 has rapidly impacted all parts of the world, and the structure of medical demand has greatly affected the medical equipment industry. The occurrence of new demands and the introduction of new technologies have also accelerated the transformation of this industry. At the same time, global aging population continues to drive up the demand for medical care. Countries are actively seeking more efficient medical solutions, promoting the development of technologies such as precision health and digital medicine as well as relavant policies, hoping to accelerate the development of advanced medical technology to achieve the goals of improved medical care and extended expected life span. In response to the clinical application of emerging technologies such as artificial intelligence and digital technology, governments around the world have also begun to revise relevant medical device regulations to ensure the safety of product use also accelerates the public’s access to advanced medical technology. Through cross-disciplinary integration and cooperation with physicians, medical device manufacturers innovate products and solutions that meet clinical needs and expand new opportunities for the medical industry. According to the study report from BMI Research, the market size of the global medical equipment reached US$454.3 billion in 2021, which was a 6.3% of growth compared to that in 2020. It is estimated that the market will expand to US$535.2 billion in 2024. The compound growth rate between 2021 to 2024 is about 5.6%.


Eurocharm’s sub-subsidiary, VPIC1, was established in Vinh Phuc Province, Vietnam in 2001, and its major business is the production of motorcycle components. There are two major domestic competitors, Company C and Company K. Established in 2005, Company C mainly produces metal components in the same province. Company K, headquartered in Japan and with a subsidiary in Hanoi, Vietnam, manufactures motorcycle/recreational chassis and rear frames. In the medical equipment industry, Eurocharm’s primary competition is Company Z, which was established in Taiwan in 1994 with factories in Taiwan and mainland China. The main business of Company Z is in the production of medical beds and medical bed lifts, rails, and tables.