Myanmar’s car industry on the rise

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Nissan has joined Suzuki in opening a car assembling facility in Myanmar, giving the dormant automotive industry in the country a much-needed push. Assembling will take place in cooperation with Nissan’s official distributor in Myanmar, Malaysian Tan Chong Motor Group, in a factory in Bago Region between Yangon and Naypyitaw which will produce the Nissan Sunny compact sedan in a first step.

In August 2013, Tan Chong Motor was granted a permit by the Myanmar Investment Commission for the manufacturing and marketing of motor vehicles in the industrial area of Bago Region. Together with Nissan, it signed a land lease agreement on February 16, 2016 with the Bago government. Nissan has had its eye on a Bago assembly plant since 2013, when it first unveiled plans to expand production to Myanmar.

The new production facility is expected to employ around 300 people and has a capacity of 10,000 cars annually but will not fully utilised at the beginning. As a start, Nissan anticipates that it will sell around 1,000 units annually in two or three years.

Nissan is the second Japanese automaker to set up production facilities in Myanmar after Suzuki Motor Corp began producing its Ertiga multi-purpose vehicle there in 2015 at a plant at the Thilawa special economic zone southeast of Yangon. Monthly production is around 100, while capacity is also 10,000 cars per year.

Current estimates for vehicle sales in Myanmar are around 104,000 units annually, of which, however, just roughly 3 per cent are new cars. By 2020, expectations are that the market will grow to more than 150,000 units sold each year, of which around 10 per cent should be new vehicles.

In the past, only a few of Myanmar’s elite could afford new cars due to stiff restrictions on automobile imports which included the obligation to pay in foreign currency. High import duties and taxes were also a big deterrent for normal consumers.

The result was that cars in Myanmar were mainly second-hand automobiles imported from Thailand and increasingly shipped from Japan, leading to the problem that right-hand driven cars designed for left-hand traffic were used in a country with right-hand driving road rules. Additionally, the vast majority of cars in Myanmar are still 20 to 40 years old and the automotive market mainly consists of a busy aftermarket and repair industry.

In 2011, import restrictions were eased which lured foreign car makers in the country to open showrooms. Among the first to do so was Hyundai, followed by Ford, Nissan, Suzuki, Kia, Chevrolet, BMW, Honda and Toyota. Meanwhile, Mazda, Mercedes and Tata Group including its brands Jaguar and Land Rover are present. Among Chinese brands popular in Myanmar are Chery, Jinbei, Dongfeng, Lifan, King Long, Chana and Changhe. Top five best-selling brands are Toyota, Suzuki, Kia, Ford and Hyundai,

Apart from Suzuki and Nissan, Malaysia’s spare parts maker APM Automotive Holdings also plans to open a manufacturing unit in Myanmar to meet the spiraling demand for auto parts. Among Chinese car manufacturers, Beijing Automotive Industry Holdings Company and Dong Feng Motor Group decided to start their own operations.

All car companies anticipate that the auto market in Myanmar will rapidly grow over the coming years as potential demand unleashes within a population of 53 million people catching up with the rest of the world and a growing middle class wanting to become more mobile as the country’s transport sector remains grossly underdeveloped.

Official statistics by Myanmar’s road transport administration show this steady demand with over 70,000 cars imported under the substitution programme for over-aged cars and over 100,000 new cars for showrooms, military, tourism purposes and private ownership between October 2011 and May 2013. The year 2013 saw a 30-per cent increase over the previous year with 400,000 passenger cars registered, and 2014 demand for new car still jumped by 15 per cent.

 

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Reading Time: 3 minutes

Nissan has joined Suzuki in opening a car assembling facility in Myanmar, giving the dormant automotive industry in the country a much-needed push. Assembling will take place in cooperation with Nissan’s official distributor in Myanmar, Malaysian Tan Chong Motor Group, in a factory in Bago Region between Yangon and Naypyitaw which will produce the Nissan Sunny compact sedan in a first step.

Reading Time: 3 minutes

Nissan has joined Suzuki in opening a car assembling facility in Myanmar, giving the dormant automotive industry in the country a much-needed push. Assembling will take place in cooperation with Nissan’s official distributor in Myanmar, Malaysian Tan Chong Motor Group, in a factory in Bago Region between Yangon and Naypyitaw which will produce the Nissan Sunny compact sedan in a first step.

In August 2013, Tan Chong Motor was granted a permit by the Myanmar Investment Commission for the manufacturing and marketing of motor vehicles in the industrial area of Bago Region. Together with Nissan, it signed a land lease agreement on February 16, 2016 with the Bago government. Nissan has had its eye on a Bago assembly plant since 2013, when it first unveiled plans to expand production to Myanmar.

The new production facility is expected to employ around 300 people and has a capacity of 10,000 cars annually but will not fully utilised at the beginning. As a start, Nissan anticipates that it will sell around 1,000 units annually in two or three years.

Nissan is the second Japanese automaker to set up production facilities in Myanmar after Suzuki Motor Corp began producing its Ertiga multi-purpose vehicle there in 2015 at a plant at the Thilawa special economic zone southeast of Yangon. Monthly production is around 100, while capacity is also 10,000 cars per year.

Current estimates for vehicle sales in Myanmar are around 104,000 units annually, of which, however, just roughly 3 per cent are new cars. By 2020, expectations are that the market will grow to more than 150,000 units sold each year, of which around 10 per cent should be new vehicles.

In the past, only a few of Myanmar’s elite could afford new cars due to stiff restrictions on automobile imports which included the obligation to pay in foreign currency. High import duties and taxes were also a big deterrent for normal consumers.

The result was that cars in Myanmar were mainly second-hand automobiles imported from Thailand and increasingly shipped from Japan, leading to the problem that right-hand driven cars designed for left-hand traffic were used in a country with right-hand driving road rules. Additionally, the vast majority of cars in Myanmar are still 20 to 40 years old and the automotive market mainly consists of a busy aftermarket and repair industry.

In 2011, import restrictions were eased which lured foreign car makers in the country to open showrooms. Among the first to do so was Hyundai, followed by Ford, Nissan, Suzuki, Kia, Chevrolet, BMW, Honda and Toyota. Meanwhile, Mazda, Mercedes and Tata Group including its brands Jaguar and Land Rover are present. Among Chinese brands popular in Myanmar are Chery, Jinbei, Dongfeng, Lifan, King Long, Chana and Changhe. Top five best-selling brands are Toyota, Suzuki, Kia, Ford and Hyundai,

Apart from Suzuki and Nissan, Malaysia’s spare parts maker APM Automotive Holdings also plans to open a manufacturing unit in Myanmar to meet the spiraling demand for auto parts. Among Chinese car manufacturers, Beijing Automotive Industry Holdings Company and Dong Feng Motor Group decided to start their own operations.

All car companies anticipate that the auto market in Myanmar will rapidly grow over the coming years as potential demand unleashes within a population of 53 million people catching up with the rest of the world and a growing middle class wanting to become more mobile as the country’s transport sector remains grossly underdeveloped.

Official statistics by Myanmar’s road transport administration show this steady demand with over 70,000 cars imported under the substitution programme for over-aged cars and over 100,000 new cars for showrooms, military, tourism purposes and private ownership between October 2011 and May 2013. The year 2013 saw a 30-per cent increase over the previous year with 400,000 passenger cars registered, and 2014 demand for new car still jumped by 15 per cent.

 

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