Import restrictions under the previous military government ensured car prices in Myanmar were among the highest in the world. Now, under the current quasi-civilian government which took power in 2011, restrictions have eased and car prices have fallen dramatically. Legislation has, however, often been less than clear, as car import policies have been frequently changed. The Irrawaddy’s Kyaw Hsu Mon spoke with Soe Tun, director of Farmer Auto Showroom and a member of the Automobile Dealers Association, on the state of the country’s car industry.
Question: What was the car industry like before recent policy changes?
Answer: Before the new government allowed the opening of automobile showrooms in Myanmar, the price of imported cars was incredibly high. Car prices in the country should have been noted in the Guinness World Records as the most expensive.
Q: How have government policies on imported cars changed?
A: Within two years after the government allowed car imports to Myanmar, import policy has changed about 10 times. The changes in policy have led to losses for people [importers and consumers]. If we calculate the amount, there may have been more than 1 billion kyat [roughly US$1.008 million] lost due to changes in import policy.
Import policies have had many steps. First, car owners who owned models that were more than 20-years-old were allowed to import newer models. Then the government allowed everybody to import cars. Now, cars over 20-years-old are being taken off the road [for safety].
Q: What is the state of the market today?
A: There are a lot of imported cars on the market, but only in Yangon. Beyond Yangon, there are only low-cost automobiles for use in rural areas. Import taxes are also still ensuring the price of imported cars remains high.
Q: Is it true that the government will only allow left-hand drive vehicles to be imported to Myanmar soon?
A: It has been more than two years since the Ministry of Industry and the Myanmar Engineering Society began drafting the Myanmar Automobile Act, said to be submitted to parliament soon. Our Automobile Dealers Association representatives also participated in drafting the act. Through our discussions, we have concluded that the government should only allow imported cars that comply with the traffic rules in Myanmar.
Q: Have you heard about some car brokers importing badly damaged cars?
A: I heard that there were some brokers [who did this]. Three brokers imported badly damaged cars last year and the government took action against them. They were unable to uncover some of the individual importers but the registered companies involved were blacklisted. Now there are almost no damaged cars being imported.
Q: What types of imported cars are the most expensive in Yangon and what are the most in demand?
A: In Myanmar, there are two kinds of people in the market to buy a car, the middle class and the elites. The elites are used to buying a variety of expensive cars such as Rolls-Royces. But at present, sports cars are not permitted to be imported.
Q: Are used Japanese cars still in strong demand? What about other well-known international models?
A: South Korean, Japanese, American, German and Chinese car dealers have recently opened showrooms in Yangon. Only 1,000 new cars have been imported among the 300,000 to 400,000 cars imported to Myanmar so far. Importers of brand new cars are mainly targeting government ministries to buy their models. Recently, the South Korean brand KIA has been leading the new car market. These cars have been granted some tax exemptions and therefore they can sell at lower prices. Actually, international automobile companies are not yet coming to invest in Myanmar. Only dealers and sub-dealers are entering the market. As long as the basic wage of most people remains low, the market for brand new cars will not grow in Myanmar.
Q: For people wanting to buy a good second-hand car, what should they buy?
A: For Yangon use only, I would recommend a Honda Fit or a Toyota Vitz which both consume less fuel. For rural use, it seems the Daihatsu Hijet trucks and the Suzuki carry trucks are in high demand.
This article first appeared in the November 2014 print edition of The Irrawaddy Magazine.
