There are more cars on the road than ever before, but the supporting industries are not yet up to speed, say would-be auto part importers.
Several high-profile international car manufacturers have set up shop in Myanmar, with a few like Nissan also announcing plans to open local assembly plants and others like Toyota holding discussions to do the same, said U Aung Min, secretary general of the Myanmar Industries Association.
The influx of vehicles on the road and international car manufacturers also requires a supporting parts industry, and businesspeople are keen to get involved in the sector. Though auto part importers do not have the public prominence of car manufacturers, it is clear that businesspeople see the industry’s potential.
A number of auto part manufacturers have looked at setting up here, such as Malaysia’s APM Automotive which claims to have received Myanmar Investment Commission approval for a Bago Region plant in October 2013.
Meanwhile, about 120 companies from Myanmar as well as Vietnam, Philippines, Taiwan, USA, UK, China and Malaysia took part in an auto part exhibition from July 18 to 21 at Yangon’s Tatmadaw Exhibition Hall.
With little domestic production, nearly all auto parts need to be imported, said Steven Chen, area manager at Yokers trade and marketing service.
“Since everything needs to be imported from outside the country, the quality is not stable,” he said.
The majority of auto part imports come from China, as they are generally the cheapest, said U Hla Myint, an official with Mg Ba and Sons.
However, Taiwanese products are becoming more popular as consumers are looking for higher quality, he said.
“Products from Dubai, Thailand, China and Taiwan are available in my shop but still most demand is from China,” he said. Auto part makers are also increasingly entering the market in line with the more high-profile vehicle manufacturers, meaning customers have more choice and competition is fiercer.
Industry observers say it can be challenging keeping up with the rule changes governing the sector.
Alex Pen, from the Taiwan government agency Taiwan Trade Centre, said Myanmar’s large market size is particularly enticing for investors, but that regulations can change frequently.
“Exhibitors are a little bit worried about the current situation because they don’t know if in the future regulations will change again,” he said. But he added that public assurances by senior government officials that rules would remain stable had helped.
Mr Pen said Taiwanese exporters are in part hoping their auto part exports to Myanmar are boosted by the fact that they produce left-hand drive cars for the right-hand side of the street. The People’s Republic of China is also a right-hand drive country, while Thailand, India and Japan are left-hand drive countries.
Source: MYANMAR TIMES