Precious Metal

By Sean Havey 17 October 2013

YANGON — When Myanmar’s government introduced a program in 2011 to enable car owners to replace their old vehicles with newer models, it inevitably made mountains of the country’s scrap heaps. But not all of the discarded clunkers filling these massive piles of metal are as worthless as they seem.

Squeezed in among all the old wrecks at the government-owned Insein junkyard on the outskirts of Yangon are a few true gems: 60s-era Volkswagen Beetles and buses that in many other countries would have been lovingly restored by collectors, not unceremoniously dumped for scrap metal.

One needn’t look far to find a market for vintage VWs: In neighboring Thailand, car enthusiasts will happily pay thousands of dollars to snap up decades-old vans and “bugs.”

Tim Samek, a Canadian who works in Thailand’s oil and gas industry, recently bought a VW Beetle from a local in Thailand for US$2,500 and modified it to his own specifications. He says they’re fun and easy to work on, but not always easy to find.

The reason, says Mr. Samek, is that Thailand slaps high import duties on used cars, often matching the value of the vehicle itself. “I believe this is a protectionist measure to protect the Thai automobile industry,” he says. “That industry employs hundreds of thousands of people and was hard hit by the floods two years ago.”

On the Myanmar side, government policy plays a similar role in providing a disincentive to selling vintage cars to collectors. Under the system introduced two years ago, old cars can be traded in for import licenses that are even more exorbitantly expensive than those in Thailand. That means they’re more valuable when handed over to government scrapyards than put on the open market.

But in the case of old VWs, that isn’t necessarily the case. A recent search on a popular vintage car website showed a restored Beetle from the 60s can fetch over $10,000 in Thailand, while VW buses sell for up to $60,000.

As long as the governments of these two countries continue to create barriers to imports, it may prove unfeasible to take advantage of the demand for old VWs among diehard fans. But if trade practices change (as they’re supposed to 2015, when Asean forms a free trade area), Yangon’s scrapyards could turn into goldmines.