An expected drop in import costs set for January has left thousands of imported vehicles sitting in containers at Yangon Port as dealers fear that bringing them into the market now could result in losses.
Officials said that sellers are expected to impose a reduction in transportation and insurance costs to dealers termed Cost, Insurance and Freight (CIF) charges. Dealers, in expecting a better rate for imported cars next month, have opted for the time being to hold out on making purchases.
“There were already a lot of cars on the docks before, and then we heard the CIF rate would change. We will leave the cars at the docks until we see what the new rates will be,” said U Soe Htun, chief executive at local dealership Farmer Auto.
Rumours of a CIF rate change has driven demand down at car sales centres, which are also chock-full of vehicles.
“If we take out the cars now, we’ll have to pay more customs duty. Demand and earnings are down,” said U Soe Tun, explaining the delay.
“I didn’t want to take the cars out. We can save from K1.4 million to K1.5 million per car after the CIF rate changes. The new rate should come out soon, so I will take out the cars in January,” said SKK Auto chief executive Ko Chan Kyaw Kyaw.
Ships bring imported cars to Bo Aung Kyaw and Sule docks, and to Myanmar International Terminal Thilawa (MITT), which has space for 9000-10,000 units. Myanmar Port Authority (MPA), meanwhile, has allotted room to fit 4000 cars for short-term parking.
Six container ships holding imported vehicles arrived at MITT from December 5 to 15, and there are already more than 5200 cars parked there, according to an official at the Myanmar Port Authority.
Source: Myanmar Times