Chinese auto manufacturers move into the fast lane

Chinese automakers are looking to take a bigger share of the growing Myanmar personal car market, though consumer preference for Japanese brands remains strong.

Beijing Automotive Group (BAIC) is one Chinese firm looking to woo Myanmar consumers, aiming to introduce its third model the D50 in the coming months.

BAIC International Development president Dong Haiyang told The Myanmar Times that while many in Myanmar currently drive used Korean and Japanese cars, there is plenty of room for competitors.

“We will give a guarantee for our products, and we believe that the Myanmar people will be satisfied with them,” he said.

State-owned BAIC is China’s fourth largest automaker, and purchased intellectual property from former General Motors unit Saab in 2009.

The firm hopes its commitment to quality and after-sales service will help set it apart from its competitors. It has partnered with local firm Aung Gabar to distribute its cars.

“It is not easy to build a Chinese brand in Myanmar,” he said. “The basis of success will be the forward-looking marketing philosophy of the management.”

The partnership agreement between the two firms was signed late last year, with the first BAIC showroom opening in Yangon in February.

Some analysts say that while established Japanese brands are currently preferred, there is room for growth for Chinese carmakers in the Myanmar market.

“The current share of Chinese vehicles is minuscule – between 3 and 5 percent – but could increase over time provided they seize the initiative and aggressively address the gaps in the market,” said Dushyant Sinha, associate director of automotive practice Asia Pacific at Frost and Sullivan.

While there is no quick fix to overcome image problems, the fact the Myanmar market is at an early stage of development could make it easier for Chinese brands to establish themselves compared with other markets.

Mr Sinha said that while competitive pricing can be a good approach to get a foothold in the market, it is not a desirable long-term strategy.

“Having made an early entry into the market, Chinese car companies such as Chery, Dong Feng and BAIC need to slowly establish reputation through strong after sales support and sound product-market strategy,” he said. Selection of appropriate models and a Myanmar-wide network of dealers is also important, he added.

Previous imports of Chinese brands to Myanmar have not always been as systemic as BAIC’s setup.

The Ministry of Industry imported Chery QQ3 models to Myanmar in 2011 and 2012, but has not imported any since the units sold out in September 2013, said ministry official Daw Toe Toe Lwin.

Although there have been rumours about the reliability and quality of the Chinese state-owned Chery brand, some owners claim to be satisfied by their purchases.

One taxi driver said that while he used the vehicle daily over the past two years it had never required maintenance, adding that while Cherry QQ is on the cheaper side and a Chinese brand, it is quite good. – Additional reporting Jeremy Mullins

Source: Myanmar Times

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