Mitsubishi Heavy Industries Ltd (MHI), one of Japan’s leading engineering and electronics firms, has a strong interest in manufacturing in Burma and sees real potential in the country’s car market, according to a senior company official.
“MHI is very interested in setting up factories here. It would even like to establish an automobile industry in Myanmar,” said Maung Maung Tin, the deputy general manager of the company’s Rangoon branch office.
Part of the Mitsubishi Group, which also includes Mitsubishi Motors, MHI has over 100 branches worldwide and manufactures 700 items, including launch vehicles, power-generation systems, ships, industrial machines and room air conditioners.
Speaking at a technical forum at Rangoon’s Chatrium Hotel last Wednesday—the first the company has ever held in Burma—Maung Maung Tin said that MHI has carried out extensive market research since last year and is eager to invest in the country.
However, much still depends on the government’s foreign direct investment laws and whether the company can get permission to expand its operations, he added.
Last September, the government launched a program that allowed owners of older vehicles to replace them with models built between 1995 and 2006 in an effort to improve the safety and fuel efficiency of cars on Burma’s roads. Since then, demand for newer cars has been booming, driving down the value of some formerly popular models by as much as 50 percent.
However, the cost of importing cars remains prohibitive, making the prospect of a domestic automobile industry all the more appealing.
“People have to buy cars that are imported by car import agencies, and they have to pay not only the values of the vehicles, but also the import costs and taxes,” said Thein Minn, a Rangoon car dealer.
“We hope that foreign makers will set up factories here so we can save on these costs. Japanese cars would be ideal, because they are already well known in Burma and are considered to be the most reliable,” he added.
There are signs that the government may be prepared to do more to meet Burmese demand for cars. At a meeting of the Car Import Supervisory Committee on May 7, Minister for Commerce Win Myint said the government aims to double Burma’s car density, which is the lowest in the world, to seven vehicles per 1,000 people. However, he gave no time frame for the proposed increase.
“We launched the vehicle substitution program last year and aim to make it easier for people to buy cars,” said Win Myint.